Canada — OSFI · Canada (federally regulated financial institutions) · Regulatory guidance
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Finalized 11 Sep 2025; effective 1 May 2027. Scope expanded to explicitly include AI/ML and non-quantitative models — the Canadian counterpart to US SR 26-2 for banks, insurers and trust & loan companies.
Operate an enterprise-wide model risk-management framework over the full model lifecycle, with a model inventory and risk-based materiality rating that explicitly captures AI/ML models.
Independently validate models before first use and periodically thereafter — conceptual soundness, data quality, performance, and bias/fairness.
Continuously monitor model performance and drift, document model decisions, and ensure appropriate human oversight of outputs.
Federally regulated financial institutions must manage model risk across the lifecycle — inventory, risk-based materiality, independent validation, monitoring and human oversight — explicitly covering AI/ML models.
Action: Stand up or extend a model risk-management framework and validation function covering AI/ML before 1 May 2027.
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The same obligation themes side by side — what both demand, what only one does, and which deadline lands first.