The Office of the Superintendent of Financial Institutions has released updated versions of capital adequacy guidelines for comment.

The latest version of these guidelines was released back in December 2006. However, OSFI says that a number of interpretational issues and areas requiring clarification or correction were identified in that version. The updated guidelines incorporate responses to comments and queries it received from industry associations and individual banks and correct the errors.

The major changes from the version released in December are: a revised definition of substantial investments for regulatory capital purposes; and, explicit guidance for the treatment of residential mortgages guaranteed by a mortgage insurer having a government backstop guarantee, according to OSFI.

The objective of releasing the new version of the guidelines is to ensure that federally regulated deposit-taking institutions have comprehensive and clear guidance available to them once the implementation of the new capital adequacy framework, known as Basel II, takes effect at year-end, OSFI says.

Comments on the latest version are due by Oct. 12.