The Financial Consumer Agency of Canada’s (FCAC) new supervision framework for overseeing financial institutions came into effect Oct 1.
The framework requires the banks and other firms FCAC regulates to “proactively identify, address and monitor risks and keep FCAC updated on their particular risks and controls.” The agency will also use the framework to understand “emerging risks” before they affect consumers.
It replaces the previous compliance framework.
The new framework comes after the agency found “insufficient” controls in the sale of financial products at Canada’s biggest banks. Its March report on banks’ retail sales practice found that “retail banking culture is strongly anchored in sales” and may increase consumer risk. The governance frameworks and controls to mitigate the risks were underdeveloped, the review said.
FCAC has also created an enforcement division as part of its supervision and promotion branch.
Read the supervision framework here.
The agency published its 2017-2018 annual report Friday, which highlights its report on banks’ retail sales practices and another on home equity lines of credit.
Read the annual report here.