The Office of the Superintendent of Financial Institutions (OSFI) published its final 2026 Liquidity Adequacy Requirements (LAR) Guideline, updating how it assesses whether federally regulated banks, bank holding companies, and trust and loan companies can meet obligations in cash or assets readily convertible to cash. The final version incorporates feedback from a 60-day public consultation that ended in July 2025 and focuses on clarifying deposit classification and related liquidity treatment. Key changes include clearer criteria for classifying deposits as retail funding, with partnership deposits split into smaller groups based on deposit insurance status, whether the account is transactional, and whether there is an established relationship between the retail client and a non-bank financial intermediary. OSFI also combined the two proposed retail structured note categories into a single category aligned to the treatment of term deposits directly managed by an unaffiliated third party, clarified how to measure maturity for structured notes with autocallable features, specified when contingent funding obligations should apply, and simplified the definition of retail rate-sensitive deposits. OSFI noted that the enhancements continue to meet Basel Committee on Banking Supervision standards. The guideline comes into effect on May 1, 2026.

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