OSFI UPDATES RULE B-10 THIRD-PARTY RISK MANAGEMENT GUIDELINE
OSFI published a draft of its “new B-10” Third-Party Risk Management Guideline. Once finalized, the draft Guideline will replace OSFI's current Guideline B-10 on Outsourcing of Business Activities, Functions and Processes, which was originally issued in 2001 and last revised in 2009. The Draft Guideline sets out OSFI's third-party risk management expectations for federally regulated financial institutions in Canada and identifies some best practices for contracting with third parties. The scope of the Draft Guideline is much broader than the existing Guideline B-10, as it outlines OSFI's expectations for managing risks associated with third-party arrangements including affiliates, rather than focusing only on outsourced arrangements. Included are some prudential and prescriptive guidelines for risk management programs which will be helpful to all capital market participants, regardless of whether they are regulated by OSFI. While IIAC will not be commenting, the consultation on the draft Guideline will be ongoing until July 27, 2022, and it is expected that the final Guideline will be published in the fall of 2022.