OSFI pushes late filing penalty

In response to the high number of late filings from federally-regulated financial services companies, including insurers, the Office of the Superintendent of Financial Services (OSFI) has proposed regulations for “late and erroneous filings” penalties.

The proposed regulation, which at the time of going to press was still open to “comment”, is needed OSFI says because “the frequency of late and erroneous filings is high for the [financial services] industry overall”. The OSFI proposal says that more than one third of all quarterly financial returns filed in the first three quarters of 1999 were late. “These late and erroneous filings place a significant operational burden on OSFI and efforts to date to minimize their frequency have had only limited success.”

OSFI is planning to begin assessing penalties as of April 1, 2002. Financial institutions have voiced concerns over the proposal, saying that the penalties place an undue burden on companies and raise the profile of regulatory reporting to “an unjustifiably high level”.

However, OSFI says the project will be phased in over the course of the year in order to give companies an opportunity to adjust. As well, it plans to review its own reporting requirements. “As a result of this process, some requirements may be eliminated, but others may be identified.”

The penalties are tiered from $100 to $500 per day, based on the size of the institution’s total assets. Some exceptions may be made at the discretion of OSFI. A dispute resolution system is also part of the proposal.