OSFI Finalizes Liquidity Adequacy Requirements Guideline

OSFI News (Canada Banking Regulator)

Published January 29th, 2026

Detected February 11th, 2026

Summary

The Office of the Superintendent of Financial Institutions (OSFI) has published the final Liquidity Adequacy Requirements (LAR) Guideline for 2026. This guideline, effective May 1, 2026, clarifies definitions and treatments for deposits and structured notes to enhance the financial resilience of federally regulated deposit-taking institutions.

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What changed

The Office of the Superintendent of Financial Institutions (OSFI) has issued the final Liquidity Adequacy Requirements (LAR) Guideline 2026, effective May 1, 2026. This updated guideline incorporates feedback from a public consultation and clarifies the classification of retail funding, the measurement of structured note maturities, and the application of contingent funding obligations. Key changes include refining the definition of retail deposits and aligning the liquidity treatment for certain structured notes with term deposits.

Federally regulated banks, bank holding companies, and trust and loan companies must review and implement the updated LAR Guideline by May 1, 2026. The changes aim to ensure these institutions can meet their obligations during periods of stress, enhancing financial resilience and aligning with international standards. While the guideline clarifies existing requirements, institutions should ensure their internal processes and reporting accurately reflect the updated definitions and treatments to maintain compliance.

What to do next

Review and understand the updated LAR Guideline 2026
Update internal policies and procedures for deposit classification and liquidity treatment
Ensure systems are capable of meeting new measurement and reporting requirements by May 1, 2026

Source document (simplified)

Backgrounder: Final Liquidity Adequacy Requirements Guideline (2026)

Backgrounder
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January 29, 2026

Overview

The Office of the Superintendent of Financial Institutions (OSFI) published the final Liquidity Adequacy Requirements (LAR) Guideline for 2026. The guideline reflects feedback from a 60‑day public consultation that ended in July 2025.

The LAR Guideline sets out how OSFI monitors whether financial institutions can meet their obligations in cash or with assets that can be quickly converted to cash. It helps ensure federally regulated banks, bank holding companies, and trust and loan companies can handle deposit withdrawals and meet payment and settlement obligations even in periods of stress.

The final guideline clarifies which deposits can be classified as retail funding and qualify for favourable liquidity treatment. Partnership deposits are separated into smaller groups based on whether they are insured, whether they are in a transactional account, and whether they are part of an established relationship between the retail client and non-bank financial intermediary (NBFI). The two proposed categories of retail structured notes are combined into one, with liquidity treatment aligned with term deposits directly managed by an unaffiliated third party. The guideline also clarifies how to measure the maturity of structured notes with autocallable features and when contingent funding obligations should apply. Finally, it simplifies the definition of retail rate‑sensitive deposits.

Why it’s important

Liquidity is one of the biggest risks facing deposit-taking institutions as losses can occur when there is insufficient liquidity to handle a stress event. The final LAR Guideline (2026) reflects the innovation and evolution of financial markets while enhancing the financial resilience and stability of federally regulated deposit-taking institutions.

The final LAR Guideline (2026) sharpens deposit-taking institutions’ focus on one of the most important risks affecting their safety and soundness while considering regulatory burden and respecting the need for institutions to compete and take reasonable risks. Enhancements to OSFI’s liquidity regime continue to meet international standards agreed upon by the Basel Committee on Banking Supervision (BCBS).