OSFI revises anti-money laundering supervisory approach

In a letter to the industry, the Office of the Superintendent of Financial Institutions (“OSFI”) announced that it will be resuming its efforts to collaborate with the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”) to combat money laundering and terrorist financing. ‎

As part of an on-going effort to eliminate potential overlap and reduce regulatory burden, OSFI and FINTRAC revised their approach to supervise Federally Regulated Financial Institutions (“FRFIs”) anti-money laundering and anti-terrorist financing (“AML/ATF”) programs.

OSFI clarified that going forward, FINTRAC’s primary focus will be to assess whether FRFIs are in compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations, whereas OSFI’s responsibility will be the prudential implications of FRFIs’ AML/ATF compliance. In other words, OSFI’s mandate includes identifying situations that give rise to material risk, apprising FRFIs of these situations, and recommending or requiring corrective measures.

In connection with this transition, OSFI is considering revising its Regulatory Compliance Management guideline (“Guideline E-13”). Guideline E-13 outlines OSFI’s expectations in respect to mitigating regulatory risks inherent to FRFIs business activities. OSFI is also considering whether Guideline B-8, on deterring and detecting money laundering, should be withdrawn or incorporated into a revised Guideline E-13.