Vol. 137, No. 13 — June 18, 2003

Registration
SOR/2003-187 29 May, 2003

BANK ACT

Regulations Amending the Insider Reports Exemptions (Banks) Regulations

P.C. 2003-768 29 May, 2003

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 267.1 (see footnote a)  and paragraph 978(a) (see footnote b)  of the Bank Act (see footnote c) , hereby makes the annexed Regulations Amending the Insider Reports Exemptions (Banks) Regulations.

REGULATIONS AMENDING THE INSIDER REPORTS EXEMPTIONS (BANKS) REGULATIONS

AMENDMENT

1. Section 1 of the Insider Reports Exemptions (Banks) Regulations (see footnote 1)  is replaced by the following:

1. For the purposes of section 267.1 of the Bank Act, an insider is exempt from the requirements of sections 266 and 267 of that Act if the insider, under any provincial Act set out in the schedule

• (a) is required to file a document containing information similar to the information to be included in the insider report that is required by those sections to be sent to the Superintendent; or
  (b) is exempted from the requirement to file the document referred to in paragraph (a).

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is nor part of the Regulations.)

Description

Pursuant to sections 266 and 267 of the Bank Act, an insider is required to send an insider report to the Superintendent of Financial Institutions upon becoming an insider and each time the insider's interests in securities of a distributing bank changes.

Subject to certain exceptions, an insider is generally defined as a director or officer of a distributing bank or, a person who beneficially owns more than 10 per cent of the shares of a distributing bank or exercises control or direction over more than 10 per cent of the votes attached to the shares of a distributing bank.

Section 267.1 of the Bank Act contains a regulation making authority to exempt an insider from the requirements set out in sections 266 and 267 of the Bank Act. On March 23, 2000, the Insider Reports Exemptions (Banks) Regulations (SOR/2000-113) were made pursuant to that authority. The purpose of the regulations was to exempt an insider from having to file insider reports with the Office of the Superintendent of Financial Institutions (OSFI) if such reports have already been filed with any of the provincial or territorial securities commissions or if the insider has obtained a filing exemption from the appropriate securities commissions. However, the wording of the regulations did not reflect the intended policy.

Alternatives

Amendments to the regulations are needed in order to reflect the intended policy. No other alternative was considered.

Benefits and Costs

The implementation of the amendments to the Insider Reports Exemptions (Banks) Regulations will ensure that the appropriate policy intent is captured in the regulations. The original intent of the regulations was to reduce regulatory overlap and provide banks and OSFI with the opportunity to realize some cost savings. These benefits would continue to exist.

Consultation

The proposed regulations have been discussed with, and endorsed by, the Canadian Bankers Association. The industry supports this proposal.

The regulations were pre-published in the Canada Gazette, Part I, on March 22, 2003. OSFI did not receive any comments in response to pre-publication.

Compliance and Enforcement

These changes will not have a material impact on OSFI's resources but the original intent of the regulations to reduce regulatory overlap will continue.

Contact

• Michèle Legault
  Policy Advisor
  Legislation and Precedents Division
  Office of the Superintendent of Financial Institutions
  255 Albert Street
  Ottawa, Ontario
  K1A 0H2
  Telephone: (613) 990-6644
  FAX: (613) 998-6716

Footnote a 

S.C. 1997, c. 15, s. 32

Footnote b 

S.C. 2001, c. 9, s. 183

Footnote c 

S.C. 1991, c. 46

Footnote 1 

SOR/2000-113

NOTICE:
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