Notice on Additional Criteria for Exposures Secured by Residential Real Estate

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Guideline on Base Capital Adequacy Standards
Additional Criteria for Exposures Secured by Residential Real Estate This notice applies to financial services cooperatives governed by the Financial Services Cooperatives Act, RLRQ, c. C-67.3. Paragraph 473.1 of Chapter 5 of the January 2017 version of the Guideline on Base Capital Adequacy Standards (the “Guideline”) issued by the Autorité des marchés financiers (the “Authority”) provides that, effective January 1, 2017, new exposures secured by residential real estate located in Canada are subject to a default-affected long-term average loss threshold (PCDR) equivalent to the sum of the weighted-average long-term rate, adjusted for defaults, and a surcharge. New exposures refer in particular to new mortgage loans, refinanced loans, and renewed loans. The Authority hereby notifies that the provisions contained in paragraph 473.1 of Chapter 5 of the Guideline will apply to new insured exposures effective January 1, 2018. However, these provisions have applied since January 1, 2017 to new uninsured exposures. Additional Information Further information may be obtained by contacting:
Sylvain Roy
Capital Regulation for Financial Institutions Division Autorité des marchés financiers Telephone: (418) 525-0337, ext. 4517 Toll-free: 1 877 525-0337 sylvain.roy@lautorite.qc.ca Cyrille Bonou Capital Regulation for Financial Institutions Division Autorité des marchés financiers Telephone: (418) 525-0337, ext. 4645 Toll-free: 1 877 525-0337 cyrille.bonou@lautorite.qc.ca May 11, 2017