On February 26, 2008, the Office of the Superintendent of Financial Institutions ("OSFI") published a revised version of its "Guide to Intervention for Federally Regulated Deposit-Taking Institutions" (the "Guide") which reflects both changes in applicable legislation and a much more aggressive and comprehensive approach to intervention. The Guide outlines, in great detail, the actions that may be taken by, and remedies available to, both OSFI and the Canada Deposit Insurance Corporation ("CDIC"), where they have determined that intervention in the management and operation of a deposit-taking institution is appropriate.

The Guide sets out the actions that a deposit-taking institution can expect OSFI and CDIC to take depending on the risk level or "stage" assigned to the institution by OSFI. Some key changes to the Guide are as follows:

  • at all stages, there are significant increases in the comprehensiveness and extent of OSFI and CDIC reviews and reporting;
  • there is an increase in the level and extent of intervention at each stage;
  • the Minister of Finance will be informed of concerns regarding a deposit-taking institution at an earlier stage;
  • CDIC and OSFI will share more information and co-ordinate their activities to a greater extent; and
  • CDIC is prepared to turn to the courts for orders directing
  • member institutions to comply with, or restrain members from breaching, the Canada Deposit Insurance Corporation Act, Canada Deposit Insurance Corporation By-laws or the policy of deposit insurance.

Compliance officers of all member institutions should carefully review the revised Guide and inform senior officers and members of their board of directors of OSFI’s and CDIC’s apparent willingness to act more quickly and forcefully in fulfilling their mandates. Our Financial Services Regulatory Group has prepared a version of the Guide that identifies changes from the previous version. If you would like a copy, please contact Lee Hawley at lhawley@blgcanada.com.