FSRA launches consultation on proposed rules for Credit Unions and Caisses Populaires
The Financial Services Regulatory Authority of Ontario (FSRA) is consulting on three rules to make supervising Ontario’s credit unions and caisses populaires more transparent and effective.
The proposed rules strengthen the sector and better align to international standards.
Proposed rule – Sound Business and Financial Practices
The Proposed Rule introduces a principles-based approach to business and financial practices by setting outcomes for:
- Member governance
- Board of Directors governance
- Senior management
- Operational management
- Internal audit, compliance, and finance functions
- Enterprise risk management
- Subsidiary governance
The Proposed Rule will replace Deposit Insurance Corporation of Ontario (DICO) By-Law No. 5.
Proposed rule – Capital Adequacy for Credit Unions and Caisses Populaires
The Proposed Rule is expected to improve risk sensitivity and resiliency. It sets new requirements for:
- Calculating capital ratios and supervisory minimums (Tier 1 and Tier 2 Capital, Risk Weighted Assets, Capital Conservation Buffer, Total Capital Ratio, and Leverage Ratio)
- Credit, Operational, and Market Risk
- Internal Capital Adequacy Assessment Process
Proposed rule – Liquidity Adequacy for Credit Unions and Caisses Populaires
The Proposed Rule is more clear, transparent, and closely aligned to international standards. It sets new requirements for:
- Diversification of Funding
- Calculating and Reporting of Liquidity Ratios: Liquidity Coverage Ratio, Net Stable Funding Ratio, and Net Cumulative Cash Flow
- Internal Liquidity Adequacy Assessment Process
All three rules will be made under the new Credit Unions and Caisses Populaires Act, 2020, once proclaimed into force.
FSRA invites comments from June 14, 2021 to September 14, 2021.
During the consultation period, FSRA is hosting a technical briefing on all three rules on June 24, 2021. Learn more and sign up at FSRA's Live Webinar on Ontario's Proposed New Credit Union Rules
- Proposed Rule – Sound Business and Financial Practices for Credit Unions and Caisses Populaires
- Proposed Rule – Capital Adequacy for Credit Unions and Caisses Populaires
- Proposed Rule – Liquidity Adequacy for Credit Unions and Caisses Populaires
The Financial Services Regulatory Authority of Ontario (FSRA) is continuing to work with those we regulate to ensure financial safety, fairness and choice for consumers and members. Learn more at https://www.fsrao.ca/.
For media inquiries:
Ellen Kaross, Senior Advisor, Public Affairs,
Financial Services Regulatory Authority of Ontario,
Email: [email protected]