The Office of the Superintendent of Financial Institutions (OSFI) has released the final version of its new, consolidated guidance outlining its expectations for federally regulated financial services institutions, such a banks and life insurers, in managing their various forms of operational risk, giving banks a year to comply with the new requirements.
The new, principles-based guideline formalizes OSFI’s expectations for firms to address these risks, which OSFI says it regards as “essential to the safety and soundness” of a financial services institution. It also consolidates OSFI’s guidance on these issues into a single guideline as, previously, much of this was dispersed throughout various other policies.
OSFI indicates that it expects all federally regulated firms to have a framework for operational risk management and to be able to demonstrate their adherence to the principles outlined in the guideline as of June 2017.
“Federally regulated financial institutions have made significant improvements in their operational risk management practices over the last several years,” says Mark Zelmer, deputy superintendent at OSFI, in a statement. “This guideline supports continual improvement in their operational risk management activities.”
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