Canada’s federal bank regulator has issued new guidance on the leverage ratio disclosure that banks will be required to make starting next year.
The Office of the Superintendent of Financial Institutions (OSFI) Monday published guidance that aims to clarify the implementation of new leverage ratio disclosure requirements, which were finalized earlier this year by the Basel Committee on Banking Supervision. OSFI says that leverage ratio reporting introduces a “simple, transparent, non-risk based leverage ratio to act as a credible supplementary measure to the risk-based capital requirements.”
The accompanying public disclosure requirements are slated to take effect Jan. 1, 2015. OSFI’s guidance spells out the disclosure requirements for both banks that are deemed to be domestic systemically important banks (D-SIBs), and all other banks.
It requires D-SIBs to fully implement the disclosures starting with first quarter 2015 reporting. Banks that aren’t considered systemically important are required to fully implement the disclosures for year end 2015 reporting. While the rules set out minimum disclosure requirements, institutions can disclose additional information at their discretion, OSFI notes.
The Basel leverage ratio framework requires disclosures to be made at the same frequency as, and concurrently with, the publication of financial statements. The disclosure should be made within banks’ published financial statements; or, at a minimum, they should provide a direct link to the completed disclosures on their website.
And, “To ensure relevancy and usefulness”, OSFI says that these disclosures “should be made available as soon as practicable but no later than OSFI reporting requirements.”