Vol. 143, No. 13 — June 24, 2009

Registration

SOR/2009-160 June 3, 2009

CANADA DEPOSIT INSURANCE CORPORATION ACT

By-law Amending the Canada Deposit Insurance Corporation Joint and Trust Account Disclosure By-law

The Board of Directors of the Canada Deposit Insurance Corporation, pursuant to paragraph 11(2)(g) (see footnote a) of the Canada Deposit Insurance Corporation Act (see footnote b) and subsection 3(3.1) (see footnote c) of the schedule to that Act, hereby makes the annexed By-law Amending the Canada Deposit Insurance Corporation Joint and Trust Account Disclosure By-law.

Ottawa, June 3, 2009

BY-LAW AMENDING THE CANADA DEPOSIT
INSURANCE CORPORATION JOINT AND
TRUST ACCOUNT DISCLOSURE BY-LAW

AMENDMENT

1. Section 6 of the Canada Deposit Insurance Corporation Joint and Trust Account Disclosure By-Law (see footnote 1) is renumbered as subsection 6(1) and is amended by adding the following:

(2) A depositor may remedy a failure to disclose the information referred to in paragraph 6(1)(b) in respect of a particular year within the time required by that paragraph by disclosing, within 30 days after April 30 of any year following that year but before the determination date, the required information as of April 30 of the year in which it is disclosed.

COMING INTO FORCE

2. This By-law comes into force on the day on which it is registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the By-law.)

Description

The Board of Directors of the Canada Deposit Insurance Corporation (the “CDIC”) made the Joint and Trust Account Disclosure By-Law (the “By-law”) on June 6, 1995, pursuant to paragraph 11(2)(g) of the Canada Deposit Insurance Corporation Act (the “CDIC Act”) and subsection 3(3.1) of the Schedule to the CDIC Act. Paragraph 11(2)(g) provides that the CDIC Board of Directors may make by-laws prescribing anything that, by virtue of any provision of the CDIC Act, is to be prescribed by the by-laws; and subsection 3(3.1) of the Schedule to the CDIC Act provides that the Board may make by-laws prescribing the time by which and the form and manner in which a joint interest, a trusteeship or the interest of a beneficiary in a deposit is to be disclosed on the records of a member institution for the purposes of subsections (1) to (3) of section 3 of the Schedule to the CDIC Act. The CDIC Board of Directors subsequently made a technical amendment to the French version only of section 3 of the By-law on April 5, 2000, and on June 3, 2009 made further amendments to the By-law.

The amending By-law addresses a technical anomaly in the application of the disclosure regime related to multiple beneficiary trust accounts and the disclosure required by the trustee to obtain coverage up to $100,000 per beneficiary. The trustee must disclose the respective interest in the deposit of each beneficiary as at, and within 30 days after, April 30 in each year. Strict compliance with the Act and the By-law, including its disclosure deadlines, is required to qualify for separate insurance coverage. If the trustee has failed to update the member institution’s records on time or with the necessary information, then there is no separate coverage, and filing of the necessary information in a subsequent year will not correct previous lack of filing.

The amending By-law does not alter the requirement to make the disclosure. Rather, the new subsection 6(2) to the By-law provides a remedy for situations where disclosure is not made in a year. Provided that the trustee discloses the respective interests of each beneficiary as at April 30 by May 30 immediately prior to the determination date, the disclosure requirements will have been met.

Alternatives

There are no available alternatives. The amendments must be done by way of by-law.

Benefits and costs

The implementation of the amending By-law will provide a mechanism for trustee depositors to remedy previous errors. No costs should be attributed directly to these changes.

Consultation

As the amendment is technical and closes a gap in the application of the by-law, only consultation by way of pre-publication on March 14, 2009, in the Canada Gazette, Part I, took place. Comments were requested within 60 days and no comments were received.

Compliance and enforcement

There are no compliance or enforcement issues.

Contact

Sandra Chisholm
Director, Insurance
Canada Deposit Insurance Corporation
50 O’Connor Street, 17th Floor
P.O. Box 2340, Station D
Ottawa, Ontario
K1P 5W5
Telephone: 613-943-1976
Fax: 613-992-8219
Email: schisholm@cdic.ca

Footnote a
R.S., c. 18 (3rd Supp.), s. 51

Footnote b
R.S., c. C-3

Footnote c
R.S., c. 18 (3rd Supp.), s. 73(2)

Footnote 1
SOR/95-279

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