OSFI's activities can be divided into two broad functions: regulation and supervision.

Regulation

Regulation involves providing input into developing and interpreting legislation and regulations, issuing guidelines, and approving requests from federally regulated institutions as required under financial institution legislation.

Supervision

Supervision involves assessing the safety and soundness of federally regulated financial institutions and pension plans, and using supervisory powers to intervene in a timely manner to protect the rights and interests of depositors, policyholders and pension plan members.

OSFI supervises in accordance with its Supervisory Framework, introduced in 1999 and supplemented by its Supervisory Framework Rating Assessment Criteria, developed in consultation with industry and introduced in 2002.

Guide to Intervention for Federal Financial Institutions

OSFI and Canada Deposit Insurance Corporation (CDIC) jointly have developed a Guide to Intervention for Federal Financial Institutions. The Guide provides a framework for responding effectively to circumstances that could lead to the instability of a financial institution. Formalizing a process for early intervention if potential problems are identified increases the likelihood of averting the institution's failure.

The Guide explicitly describes the supervisory assessment and intervention process. It outlines the actions or options available to OSFI and CDIC, individually and jointly, to address the institution's circumstances that are the source of concern. It also defines a graduated and progressive set of responses depending on the institution's situation and the degree of weakness perceived.