NEW YORK ( TheStreet) -- Over C$70 billion in hybrid capital will need to be unwound in order for Canadian banks to comply with new rules set down by international bank supervisors, according to the country's financial regulator.

Canada's "Big Five" banks -- which include Royal Bank of Canada ( RY - Get Report), Toronto Dominion Bank ( TD - Get Report), Bank of Nova Scotia, Bank of Montreal ( BMO - Get Report) and Canadian Imperial Bank of Commerce ( CM - Get Report) -- will all need to recapitalize according to rules set by international regulators through Basel III, the Office of the Superintendent of Financial Institutions announced on Friday.

According to the OSFI existing hybrid structures used by many Canadian banks as Tier 1 capital, such as "capital trust units", do not qualify for relief under Basel III and will need to replaced with more conservative holdings. Analysts estimate at least C$70 billion ($71 billion) in bank capital is held in non-qualifying structures, according to published reports.

The Canadian regulator said conversion to Basel III-approved holdings will need to begin in 2013 and be completed by 2023. Banks have the option of redeeming existing holdings prior to 2023, but they will need to seek regulatory approval, according to the OFSI.