Canadian Compliance Group
Canadian Compliance Group

Insights

From time to time we intend to share our insights to help inform our clients about important developments relating to compliance risk management.

 

Please feel free to share your feedback with us.

 

For contact information, please refer to our contacts.

Bill C-29

 

On Oct 25, 2016, Bill C - 29, referred to as the Budget Implementation Act, 2016, No. 2, was introduced in Parliament.  Although the Bill is mainly focused on budget matters, it also proposes to amend the Bank Act to add a new Part XII.2 to the Act entitled Dealing with Customers and the Public.  We have not completed a detailed analysis of the amendments, however, the new Part appears to consolidate all of the existing consumer protection provisions of the Bank Act in one place.  At first glance, the provisions appear to be, similar, if not identical to what already appears in various places in the Act.

 

The amendments also establish four principles that are meant to apply across the entire Part.  The principles are:

 

(a) basic banking services should be accessible;

(b) disclosure should enable an institution’s customers and the public to make informed financial decisions;

(c) an institution’s customers and the public should be treated fairly;

(d) complaints processes should be impartial, transparent and responsive; and

(e) an institution should act responsibly, considering its customers and the public as well as the efficiency of its business operations.

The amendments also state that provisions are intended to be paramount to any provincial laws.  This is no doubt a reaction to the recent Supreme Court decisions that applied provincial consumer protection laws to banks.

Before the amendments can come into force, the Bill must be approved by Parliament and an in force date must be established by Order in Council.

Mortgage Insurance

 

The federal government has announced further restrictions on the availability of mortgage insurance that could have a direct impact on the types of mortgage loans that a federally regulated institution may make.  The rules will impact both high ratio and conventional mortgages.

 

Click here to read the article.

Board Assessments

 

One of the features of the OSFI Corporate Governance Guideline that goes fully into effect on January 31, 2014, is an expectation that the Board will regularly assess the effectiveness of the compliance function and its processes.  While the Guideline provides some direction about the expectations for an effective compliance function, it essentially leaves it to Directors to determine how to assess effectiveness.  In our recent article, we offer some advice to Boards on how to conduct an assessment by asking some simply questions.

 

Click here to read the article.

Board Accountability for Compliance

 

What many business leaders may not appreciate is that the existing legal framework for banks not only requires that an appropriate compliance program be established but also places directors at personal risk for liability or removal if a program is not established. In an era where regulators, politicians, and the public are calling for greater accountability for corporations and their managers, it is important to understand how the current legal framework for banks and their directors addresses compliance. This article reviews the legal responsibility of directors for establishing a compliance program and the risk of personal liability or removal if the bank fails to maintain an adequate compliance program.

Click here to read the full article.

Key Changes in Final Corporate Governance Guideline

 

On January 28, 2013, OSFI released a new Corporate Governance Guideline to replace the Guideline that was originally released in 2003.  A draft Guideline was previously released for comment in August, 2012.  In a cover letter, OSFI indicated that it expects institutions to conduct a self-assessment for compliance with the Guideline and develop a plan to address any gaps by May 1, 2013.  OSFI also indicated that it expects full compliance with the Guideline by January 31, 2014.

 

Click here for a summary of the key changes that were made to the draft released last August.


Dealing with the Tail Risk

 

One of the key components of a compliance risk management program is the inherent risk assessment. The assessment identifies where the institution is most exposed to regulatory risk and allows the institution to direct compliance resources and investment to the areas that pose the greatest risk.  However, recently banks in the U.K. and the U.S. have suffered near catastrohic losses resulting from regulatory breaches that would have been considered to be low risk events.  How do you manage these tail risks?  This article suggests some possible answers.

 

Click here to read the full article.

The New Normal



By now, everyone knows that regulators of all stripes are asking institutions to do more to manage their risks.  However, for the most part, they have not said exactly how much more needs to be done.  Rather, their strategy is to keep the pressure on until the institutions themselves find a new standard.  Historically, when it comes to compliance risk management, the industry chased the elusive “industry standard”.  But in an environment where everyone is being asked to do more, what is that new standard?  What is the “new normal”?

Click here to read the full article.

Getting the Budget You Need

According to a recent survey, the vast majority of compliance officers appear to believe that their companies are consistently underfunding the compliance function. The survey, conducted jointly by the Society for Compliance and Ethics and the Health Care Compliance Association, found that 73% of respondents felt that they did not have adequate resources.  The study also found that the combination of budget pressures and other factors was leading to an unhealthy amount of stress for the typical compliance officer with a full 60% of respondents indicating that they had considered leaving their jobs in the past year.

 

In my prior life as a chief compliance officer and lawyer, I used to joke that the regulators could sometimes be our friends.  What I really meant was that an occasional bit of trouble with the regulators can be very effective in convincing the CEO that the amount of money and effort spent on compliance was justified. 

Of course, hoping that the regulators will come calling is not the best strategy for getting an increase in your compliance budget.  Perhaps you have an enlightened CEO who views compliance as the “cost of admission”.  However, even the most enlightened CEO probably has a breaking point.  For the rest of us, it may be time to consider some better approaches to the budgeting process.  In this article, we offer some suggestions that may help you to address your budgeting challenges.

Click here to read the full article.

Board Training

 

One of the features of the OSFI Corporate Governance Guideline, is an expectation that directors will seek out both internal and external education opportunities.  With almost 30 years experience with bank and insurance company regulation, we have the knowledge and background to assist directors to understand current regulatory issues and developments, OSFI expectations for directors and the regulatory framework within which the company operates, all essential information for directors.

 

We can assist your directors with a quick, cost effective training program that will give them the comfort of knowing that they are fully meeting their responsibilities and the regulator's expectations.

 

Call us to discuss your director training needs.

 

 

 

CCG and Resolver join forces

 

We are extremely excited to have partnered with :Resolver to build a powerful turn-key solution for compliance risk management for the Canadian banking and financial services sector. Resolver’s integrated platform supports application areas including Risk Assessment, Internal Control, Internal Audit, Compliance Management, Enterprise Risk Management and Incident Management. Resolver’s team is comprised of security, risk, and compliance experts supporting customers across 100 countries with offices in North America, United Kingdom, the Middle East, and Australia.

 

Read more.

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