The Office of the Superintendent of Financial Institutions (OSFI) published a quarterly package of updates to key prudential guidelines, released a report on the Standardized Climate Scenario Exercise (SCSE), and set out a revised approach to Administrative Monetary Penalties (AMPs) intended to better align its response to risks and clarify regulatory expectations. Changes to the Capital Adequacy Requirements (CAR) Guideline maintain the existing criterion for income-producing real estate, introduce a transition period for Combined Loan Products, and align the treatment of U.S. government-sponsored entities with U.S. standards, with related updates to the Small and Medium-Sized Deposit-Taking Institutions Capital and Liquidity Requirements Guideline. Guideline E-23: Model Risk Management expands its scope to include risks from AI and other models in addition to traditional models. Under Guideline E-15: Appointed Actuary, OSFI will remove mandatory peer reviews starting January 2027 while retaining the authority to request them when needed. The one-time joint OSFI-AMF SCSE report provides a standardized view of physical and transition climate risks across financial institutions and is intended to support climate risk measurement capabilities. The revised AMP framework applies to violations after September 11, 2025 and includes a revised scaling factor to determine AMP amounts for small and medium-sized financial institutions. OSFI will hold a virtual Industry Day on September 25, 2025 to discuss the items released and take questions.
Office of the Superintendent of Financial Institutions 2025-09-11
Office of the Superintendent of Financial Institutions updates capital, model risk and appointed actuary guidelines and revises administrative monetary penalties
The Office of the Superintendent of Financial Institutions (OSFI) updated prudential guidelines, including Capital Adequacy Requirements and Model Risk Management, and revised its approach to Administrative Monetary Penalties. The updates align standards with U.S. practices and expand model risk management to include AI risks. Additionally, a joint OSFI-AMF report on climate risks was published to enhance climate risk measurement capabilities.