Canada’s Superintendent of Financial Institutions has raised concern following the guilty plea of US subsidiaries of Toronto-Dominion Bank (TD) regarding charges related to shortcomings in their anti-money laundering (AML) regime.
In a statement, Peter Routledge said the deficiencies TD’s US regulators “is serious.”
“Deficiencies in any institution’s anti-money laundering regime are a prudential risk. They can be illustrative of how non-financial risks can manifest as material financial risks,” he said.
The Office of the Superintendent of Financial Institutions (OSFI) is responsible for regulating and supervising federally regulated financial institutions in Canada.
Under the OSFI Act and the Bank Act, Routledge clarified that he is restricted from disclosing specific information about the bank’s business affairs. However, he emphasized the importance of maintaining robust AML frameworks to mitigate risks.
Routledge reaffirmed OSFI’s commitment to early intervention, stating that the agency “respond[s] early and proactively to address risks that could jeopardize the public’s confidence in the Canadian financial system.”
As part of its supervisory duties, OSFI has indicated it is expecting the board and management of TD to take immediate corrective actions to address the deficiencies, particularly concerning corporate governance, compliance, and operational resilience.
The Superintendent expressed gratitude to US authorities, including the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Financial Crimes Enforcement Network (FinCEN) for their ongoing collaboration. He also reiterated support for the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which oversees Canada’s anti-money laundering efforts.
OSFI’s mandate involves ensuring that Canadian financial institutions uphold adequate policies and procedures to safeguard their integrity and security. The agency’s Integrity and Security Guideline outlines the expectations for sound governance practices within these institutions.
OSFI’s Regulatory Compliance Management and Corporate Governance Guidelines emphasize the responsibility of boards and senior management to ensure compliance with applicable laws and regulations.
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