Repealing FSRA By-Law No.5 and its effects on the credit union sector

Corporate Governance and Enterprise Risk Management Guidance has been made “inactive”

On March 1, 2022, FSRA’s Sound Business and Financial Practices (SBFP) Rule came into force at the same time as the Credit Unions and Caisses Populaires Act 2020 (CUCPA). With the introduction of the SBFP Rule, FSRA By-Law No. 5 was no longer required, and it was repealed.

The six pieces of “Corporate Governance Guidance” (Guidance Notes and Self Assessment Workbooks for each of Board, Senior Management and Audit Committee) were developed to align to the requirements set out in By-Law No.5 and are no longer active since the introduction of the SBFP Rule. Credit unions must review the SBFP Rule and ensure that they have taken the necessary actions to meet the requirements set out in the SBFP Rule.

The Enterprise Risk Management Guidance was drafted to align with the requirements set out in FSRA By-Law No.5. With the repeal of By-Law No.5, it has been rendered obsolete.

Section 12 of the SBFP Rule outlines the requirements of credit unions’ Enterprise Risk Management programs.

Credit unions are required to develop robust Enterprise Risk Management programs that meet the outcomes stated in the SBFP Rule.

Given that these guidance documents are no longer applicable, FSRA has made the six pieces of “Corporate Governance Guidance” and the three pieces of Enterprise Risk Guidance “inactive”. This means that CUs can use these guidance documents as reference if they assist the credit union in developing their ERM programs or capture corporate governance attributes, but they will no longer be used by FSRA as part of supervisory processes.

Removal annual attestation required under FSRA By-Law No.5

With the repeal of FSRA By-Law No.5, credit unions are no longer required to complete an annual attestation (“Resolution of the Board of Directors” as shown in Appendix “A” of By-Law No.5).

FSRA will be reviewing materials and looking for evidence in its assessments that the credit union’s board of directors is familiar with the SBFP Rule, and is taking the necessary actions to achieve the requirements as set out within it.

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