Regulatory Alerts2003-05-31
Guideline B-11 on Pledging
The Office of the Superintendent of Financial Institutions (OSFI) requires federally regulated financial institutions to establish and implement enterprise-wide pledging policies that govern how security interests are created in their property. These policies must define business objectives, set quantitative and aggregate limits on pledged assets, mandate ongoing monitoring and stress testing, and assign clear oversight responsibilities to balance operational needs with liquidity risk. Applicable across banks, trust companies, and insurers, the framework guides directors in fulfilling legislative obligations while protecting unsecured creditors without imposing statutory force of law.
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