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Our Role The Office of the Superintendent of Financial Institutions (OSFI) is an independent federal government agency that regulates and supervises more than 400 federally regulated financial institutions and 1,200 pension plans to determine whether they are in sound financial condition and meeting their requirements. Federally regulated entities include all banks in Canada, and all federally incorporated or registered trust and loan companies, insurance companies, cooperative credit associations, fraternal benefit societies and private pension plans. OSFI’s scope of regulation does not include consumer or consumer-related issues or the securities sector, which are the responsibility of other agencies, both federal and provincial. OSFI regulates by developing rules, interpreting legislation and regulations and providing regulatory approvals for certain types of transactions. It also contributes to new accounting, auditing and actuarial standards. All of this must balance the goals of safety and soundness with the need for institutions to operate within a competitive marketplace. OSFI supervises by analyzing financial and economic trends to identify emerging issues that could adversely affect institutions. It assesses an institution’s financial condition, material risks and the quality of its governance, risk management and compliance. When weaknesses are identified, OSFI intervenes early and works with executive management, boards and pension plan administrators to correct matters. Although OSFI plays an important oversight role, it does not manage the operations of institutions or pension plans. Their executive management, boards of directors and trustees are responsible for their success or failure. OSFI’s supervision approach is risk-based to reflect the nature, size, complexity and risk profile of an institution. Financial institutions must be allowed to take reasonable risks and compete effectively both at home and abroad, while at the same time safeguard the interests of depositors, policyholders, beneficiaries and pension plan members. OSFI’s goal is to balance competitiveness with financial stability, and international standards with Canadian market realities. Our Blueprint OSFI is undergoing a transformational journey that will better position the organization to thrive in an era of intensifying uncertainty, so that the public’s confidence in a sound financial system remains unwavering. The Blueprint serves as the compass for that journey by refocusing our mandate, expanding and fortifying our risk management capabilities, and enhancing our culture. The transformation plan set out in the Blueprint will guide OSFI’s overall direction through to 2025. Multiple operational plans ensure that our transformation is reflected in specific and tangible goals for each sector and the organization overall. Our corporate values Respect, curiosity & stewardship Respect We empower diversity of thought, promote inclusion and collaboration and behave with authenticity and professionalism. We encourage OSFI employees to embrace a deep commitment to diversity, equity, and inclusion (DEI), so that it informs all aspects of our human capital practices and makes us an employer of choice. DEI is not just a business imperative, but a moral one. Curiosity Curiosity is central to our organizational mission. We ensure that a culture of curiosity – where we foster diverse mindsets and make it safe to be different and even to fail – is at the core of all we do. Differences are explored and celebrated, which drives innovation and positive transformation. We learn from our attempts and embrace failure quickly and proactively as a step in the learning process. Stewardship We act with integrity and take accountability, we make decisions in an informed, transparent and balanced manner and we uphold the credibility and reputation of OSFI. Our Blueprint calls for a shift to a macro-responsive mindset rather than a micro-centric one. While we will always prudentially regulate and supervise regulated institutions, how we manage the risks they face will be recalibrated to better balance the individual institutions and the broader macro-risks they face. By developing a greater risk appetite among our people and as an organization, we will be able to make decisions more quickly and confidently while managing associated risks with speed and agility. Our Partners in Canada’s federal regulatory system OSFI reports to Parliament through the minister of Finance. Various formal and informal processes are used to ensure effective execution of OSFI’s mandate. For example, the Financial Institutions Supervisory Committee, whose members are OSFI, the Department of Finance, the Bank of Canada, the Canada Deposit Insurance Corporation and the Financial Consumer Agency of Canada, meets at least quarterly to share information on matters relating to the supervision of federally regulated financial institutions. OSFI also works with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which is responsible for ensuring compliance with Canada’s Proceeds of Crime (money laundering) and Terrorist financing Act. Collaboration and consultations with provincial counterparts and industry stakeholders in Canada and abroad are a regular occurrence and help OSFI to understand and resolve potential issues. International organizations such as the Financial Stability Board, the Basel Committee on Banking Supervision, and the International Association of Insurance Supervisors play a key role in the development of regulatory frameworks for banks and insurers that contribute to a strong and stable global financial system. OSFI has earned a strong international reputation through its active participation in such international organizations, which allow it to share Canadian perspectives and help shape international rule setting. Benefits to Canada A properly functioning, efficient financial system in which Canadians can place their trust and confidence is essential to Canada’s economy. OSFI’s regulation and supervision activities play a key role in contributing to public confidence in the Canadian financial system. Office of the Chief Actuary The Office of the Chief Actuary is an independent unit housed within OSFI that provides a range of actuarial valuation and advisory services to the federal government. This includes actuarial reports on the Canada Pension Plan (CPP), Old Age Security Program and the Canada Student Loans Program. Although the Chief Actuary reports to the Superintendent, he or she is solely responsible for the content and actuarial opinions in the report. The Blueprint is a transformation plan that will guide OSFI’s overall direction through to 2025. Multiple operational plans will ensure that our transformation is reflected in specific and tangible goals set for each sector and the organization as a whole. Why the transformation? The risk environment in which we operate has fundamentally changed. OSFI’s mandate and an increasingly complex risk environment is the reason for our transformation. Our vision for transformation We are transforming OSFI to ensure that we thrive in intensifying uncertainty so that the public’s confidence in a sound financial system remains unwavering. We will achieve this by: Ensuring that at the core of all we do is a culture of curiosity that fosters acceptance of diverse mindsets, where it is safe to be different and safe to fail Increasing our personal and organizational agility Being courageous and bold in making decisions that are driven by our risk appetite and informed by exceptional analysis and insights Taking actions that are timely, well understood in terms of the risk trade-offs involved, and result in followership and influence Being more deliberate in influencing policy-making to strengthen public confidence in the Canadian financial system 3 foundational elements of our Blueprint 1. Mandate Refocus the delivery of our mandate to place greater emphasis on contributing to public confidence in the Canadian financial system 2. Risk appetite Expand and fortify risk management capabilities and risk appetite to support strategic and operational management 3. Culture Embed our corporate values to enhance our culture so that individuals can flourish within an operating environment of increasing uncertainty 6 initiatives to support OSFI’s transformation 1. Culture Initiatives OSFI is a workplace where curious, diverse, high integrity colleagues are safe to bring their true and best selves to work every day and are safe to fail and then adapt. 2. Risk, Strategy and Governance OSFI makes risk-intelligent decisions every day that reflect our transparent and revealed risk appetite via leadership and governance that delegates out decision-making, from the top to the leaders best positioned to make decisions. 3. Strategic Stakeholder and Partner Engagement OSFI integrates and aligns with key stakeholders and partners inside and outside of the federal financial safety net in a manner that maximizes its influence and preserves its integrity in fulfilling its purpose and mandate. 4. Policy Innovation OSFI becomes a global leader in prudential supervision by making policy to ensure operational and financial resilience of its regulated entities in the face of climate-related, digitalization, and other yet-to-be foreseen risks. 5. Supervisory Framework OSFI’s Supervisory Framework guides supervisors to efficiently manage their portfolio of regulated entities, liberating them for true, value-added tasks and eliminating unnecessary burdens. 6. Data Management and Analytics OSFI’s data platform enables the vast majority of analytical research and insight-generation while simultaneously eliminating the necessity for most ad-hoc data requests made to regulated entities.