In a proactive move to fortify the nation’s financial sector, Canada’s banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), has released final guidelines outlining expectations for banks to protect against foreign interference, integrity-related risks, and security concerns. This initiative follows the expansion of OSFI’s mandate by the federal government in June, signaling an increased focus on issues such as money laundering prevention.
The comprehensive guidelines encompass various aspects, ranging from ensuring the “good character” of board members and senior leadership to conducting thorough background checks on employees. OSFI emphasizes the significance of managing access to critical infrastructure, including buildings and servers. The move is not only a response to evolving threats but also aligns with OSFI’s heightened attention to money laundering prevention.
Tolga Yalkin, Assistant Superintendent of OSFI, highlights that while the guidelines touch on areas the regulator has previously addressed, they represent a fundamental change by providing a comprehensive definition of integrity and security. OSFI introduces new expectations, emphasizing the promotion of a culture rooted in ethical behavior and ensuring robust protection for employees against potential threats.
The guidelines also establish clear protocols for reporting incidents related to undue influence, foreign interference, or malicious activities to law enforcement. Immediate compliance is required for reporting, with banks granted a one-year timeline to implement all new and expanded expectations.
Yalkin underscores the importance of these guidelines in reinforcing the financial system, embedding it more deeply in principles of integrity. As the banking sector faces evolving risks, these guidelines serve as a strategic framework to enhance security, protect against foreign interference, and maintain the integrity of Canada’s financial landscape.
