Regulatory Alerts2025-09-11
Guideline E-23 – Model Risk Management (2027)
Canada’s federal financial regulator issued Guideline E-23 to require enterprise-wide model risk management across all federally regulated institutions through a proportional, risk-based framework. The guideline mandates comprehensive governance structures, accurate model inventories, and oversight intensity commensurate with inherent risk ratings throughout the entire model lifecycle. It specifically addresses rapidly evolving artificial intelligence and machine learning applications by enforcing robust data governance, independent validation, clear stakeholder accountability, and enhanced monitoring to mitigate financial, operational, and reputational exposures.
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