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Vol. 134, No. 13 — March 25, 2000
Supervisory Information (Trust and Loan Companies) Regulations
Statutory Authority
Trust and Loan Companies Act
Sponsoring Agency
Office of the Superintendent of Financial Institutions
REGULATORY IMPACT ANALYSIS STATEMENT
Description
The Supervisory Information (Trust and Loan Companies) Regulations (the Regulations) are made pursuant to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act. Five sets of regulations are being made for banks, authorized foreign banks, cooperative credit associations, insurance companies and trust and loan companies. Authority to make these Regulations was included in Bill C-67 (known as the Foreign Bank Branching Bill, which can now be referred to as chapter 28 of the Statutes of Canada 1999). The legislation came into force on June 28, 1999.
The Regulations are designed to prohibit a financial institution from disclosing prescribed "supervisory information" which is defined to include the Office of the Superintendent of Financial Institutions (OSFI) ratings, stage of intervention, capital order, direction of compliance, examination report information and related correspondence. With respect to banks and trust and loan companies, supervisory information also includes OSFI's assessment of compliance with the Canadian Deposit Insurance Corporation's (CDIC) Standards of Sound Business and Financial Practices and CDIC differential premium information. The prohibition would extend to supervisory information about the institution and its affiliates.
There are two exceptions to the disclosure prohibition. The first exception authorizes an institution to disclose supervisory information to certain "insiders" such as employees, auditors and legal advisors on the condition that they continue to treat the information as confidential. The second exception authorizes institutions to disclose specific supervisory information (i.e. information pertaining to any Superintendent directive relating to capital or liquidity and/or information relating to a Superintendent direction of compliance) where disclosure would be required by securities laws.
The Regulations are being introduced to avoid the potential that supervisory information be publicly disclosed. If misinterpreted, the disclosure of supervisory information could cause negative public reaction toward the institution before proper remedial action could be taken. It is important to note that no other regulator worldwide discloses its ratings to the public.
CDIC has enacted a by-law containing a similar prohibition on disclosure (see SOR/99-121, By-law amending the Canada Deposit Insurance Corporation Deposit Insurance Policy By-law). However, the CDIC prohibition will only apply for three years starting on March 31, 1999. The Regulations are designed to implement a permanent prohibition on disclosure.
Alternatives
In a previous report, the Auditor General of Canada recommended that OSFI start disclosing its ratings to each financial institutions in order to give them a better sense of how they are perceived by the regulator. OSFI agrees with this recommendation. The prohibition on disclosure of this information by institutions will ensure that these generalized ratings can serve as a useful supervisory tool, recognizing that they are only one among many indicators of the health of the institution. Furthermore, given that CDIC's prohibition will expire in three years it is necessary to enact a permanent prohibition. As a result, no other alternative was considered.
Benefits and Costs
With the enactment of the prohibition on disclosure, OSFI will begin disclosing its ratings to each institution. As a result, institutions will have a better idea of where they stand within the various rating scales which should guide them to take any remedial action that may be required of them to improve their rating.
Consultation
Some specific institutions were consulted on matters to be covered by the Regulations. OSFI also undertook consultations with the Canadian Securities Administrators on the same matters. As a result of these consultations, changes were made to the initial proposal.
Compliance and Enforcement
OSFI will monitor compliance with the Regulations. Regular sanctions under the financial institutions legislation will be utilized if necessary.
Contact
Mr. Alain Prévost, General Counsel, Office of the Superintendent of Financial Institutions, Kent Square, 255 Albert, Ottawa, Ontario K1A 0H2, (613) 990-7787 (Telephone), (613) 952-5031 (Facsimile), legal@osfi-bsfi.gc.ca (Electronic mail).
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 503.1 (see footnote a) and paragraph 531(a) of the Trust and Loan Companies Act (see footnote b), proposes to make the annexed Supervisory Information (Trust And Loan Companies) Regulations.
Interested persons may make representations with respect to the proposed Regulations within thirty (30) days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.
Ottawa, March 23, 2000
MARC O'SULLIVAN
Assistant Clerk of the Privy Council
SUPERVISORY INFORMATION (TRUST AND LOAN COMPANIES) REGULATIONS
PRESCRIBED SUPERVISORY INFORMATION
1. (1) For the purposes of section 503.1 of the Trust and Loan Companies Act and these Regulations, prescribed supervisory information in respect of a company is the following information or any component of that information:
(a) any rating assigned to the company to assess its financial condition;
(b) any stage of intervention assigned to the company under the Guide to Intervention for Federal Financial Institutions;
(c) any order made in respect of the company under subsection 473(3) of the Trust and Loan Companies Act or any direction issued to it under section 507 of that Act;
(d) any report prepared or recommendation made as a result of an annual or special examination of the company by the Superintendent, including any related correspondence to or from the directors or officers of the company;
(e) any assessment by the Superintendent of the company's compliance with the standards of sound business and financial practices established by the Canada Deposit Insurance Corporation; and
(f) any category in which the company is classified under the Canada Deposit Insurance Corporation Differential Premiums By-law and any premium rate assigned to it and any annual premium determined for it under that By-law.
(2) For the purposes of section 503.1 of the Trust and Loan Companies Act and these Regulations, prescribed supervisory information in respect of an affiliate of a company is the supervisory information prescribed by
(a) the Supervisory Information (Banks) Regulations, if the affiliate is a bank to which the Bank Act applies;
(b) the Supervisory Information (Authorized Foreign Banks) Regulations, if the affiliate is an authorized foreign bank to which the Bank Act applies;
(c) the Supervisory Information (Cooperative Credit Associations) Regulations, if the affiliate is an association to which the Cooperative Credit Associations Act applies; and
(d) the Supervisory Information (Insurance Companies) Regulations, if the affiliate is a company, society, foreign company or provincial company to which the Insurance Companies Act applies.
PROHIBITED DISCLOSURE
2. Subject to sections 3 and 4, a company shall not, directly or indirectly, disclose prescribed supervisory information relating to it or to any of its affiliates.
LIMITED DISCLOSURE
3. A company may disclose prescribed supervisory information referred to in section 2 to its affiliates or to its directors, officers, employees, auditors or legal advisors, or to those of its affiliates, if the company ensures that the information remains confidential.
4. A company may disclose prescribed supervisory information referred to in paragraph 1(1)(c) in a prospectus, a rights offering circular, an offering memorandum, a take-over bid circular or any other similar document filed in relation to the distribution of any of its securities if the company considers the information to be a material fact that is required to be disclosed by the laws of the relevant jurisdiction applicable to those securities.
COMING INTO FORCE
5. These Regulations come into force on the day on which they are registered.
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Supervisory Information (Insurance Companies) Regulations
Statutory Authority
Insurance Companies Act
Sponsoring Agency
Office of the Superintendent of Financial Institutions
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Superviory Information (Trust and Loan Companies) Regulations.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 672.1 (see footnote c) and paragraph 703(a) of the Insurance Companies Act (see footnote d), proposes to make the annexed Supervisory Information (Insurance Companies) Regulations.
Interested persons may make representations with respect to the proposed Regulations within thirty (30) days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.
Ottawa, March 23, 2000
MARC O'SULLIVAN
Assistant Clerk of the Privy Council
SUPERVISORY INFORMATION (INSURANCE COMPANIES) REGULATIONS
INTERPRETATION
1. In the English version of these Regulations, "company" means a company, society, foreign company or provincial company.
PRESCRIBED SUPERVISORY INFORMATION
2. (1) For the purposes of section 672.1 of the Insurance Companies Act and these Regulations, prescribed supervisory information in respect of a company is the following information or any component of that information:
(a) any rating assigned to the company to assess its financial condition;
(b) any stage of intervention assigned to the company
(i) in the case of a life company, under the Supervisory Guide Applicable to Federally Regulated Life Insurance Companies, and
(ii) in the case of a property and casualty company, under the Supervisory Guide Applicable to Federally Regulated Insurance Companies;
(c) any order made in respect of the company under subsection 515(3), 516(4), 608(3) or 609(2) of the Insurance Companies Act or any direction issued to it under section 676 of that Act;
(d) any report prepared or recommendation made as a result of an annual or special examination of the company by the Superintendent, including any related correspondence to or from the directors or officers of the company; and
(e) in the case of a life company, any assessment by the Superintendent of the company's compliance with the standards of sound business and financial practices established by the Superintendent.
(2) For the purposes of section 672.1 of the Insurance Companies Act and these Regulations, prescribed supervisory information in respect of an affiliate of a company is the supervisory information prescribed by
(a) the Supervisory Information (Banks) Regulations, if the affiliate is a bank to which the Bank Act applies;
(b) the Supervisory Information (Authorized Foreign Banks) Regulations, if the affiliate is an authorized foreign bank to which the Bank Act applies;
(c) the Supervisory Information (Cooperative Credit Associations) Regulations, if the affiliate is an association to which the Cooperative Credit Associations Act applies; and
(d) the Supervisory Information (Trust and Loan Companies) Regulations, if the affiliate is a company to which the Trust and Loan Companies Act applies.
PROHIBITED DISCLOSURE
3. Subject to sections 4 and 5, a company shall not, directly or indirectly, disclose prescribed supervisory information relating to it or to any of its affiliates.
LIMITED DISCLOSURE
4. A company may disclose prescribed supervisory information referred to in section 3 to its affiliates or to its directors, officers, employees, auditors or legal advisors, or to those of its affiliates, if the company ensures that the information remains confidential.
5. A company may disclose prescribed supervisory information referred to in paragraph 2(1)(c) in a prospectus, a rights offering circular, an offering memorandum, a take-over bid circular or any other similar document filed in relation to the distribution of any of its securities if the company considers the information to be a material fact that is required to be disclosed by the laws of the relevant jurisdiction applicable to those securities.
COMING INTO FORCE
6. These Regulations come into force on the day on which they are registered.
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Supervisory Information (Cooperative Credit Associations) Regulations
Statutory Authority
Cooperative Credit Associations Act
Sponsoring Agency
Office of the Superintendent of Financial Institutions
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Supervisory Information (Trust and Loan Companies) Regulations.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 435.1 (see footnote e) and paragraph 463(a) of the Cooperative Credit Association Act (see footnote f), proposes to make the annexed Supervisory Information (Cooperative Credit Associations) Regulations.
Interested persons may make representations with respect to the proposed Regulations within thirty (30) days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.
Ottawa, March 23, 2000
MARC O'SULLIVAN
Assistant Clerk of the Privy Council
SUPERVISORY INFORMATION (COOPERATIVE CREDIT ASSOCIATIONS) REGULATIONS
PRESCRIBED SUPERVISORY INFORMATION
1. (1) For the purposes of section 435.1 of the Cooperative Credit Associations Act and these Regulations, prescribed supervisory information in respect of an association is the following information or any component of that information:
(a) any rating assigned to the association to assess its financial condition;
(b) any stage of intervention assigned to the association on the basis of the principles set out in the Guide to Intervention for Federal Financial Institutions;
(c) any order made in respect of the association under subsection 409(3) of the Cooperative Credit Associations Act or any direction issued to it under section 439 of that Act; and
(d) any report prepared or recommendation made as a result of an annual or special examination of the association by the Superintendent, including any related correspondence to or from the directors or officers of the association.
(2) For the purposes of section 435.1 of the Cooperative Credit Associations Act and these Regulations, prescribed supervisory information in respect of an affiliate of an association is the supervisory information prescribed by
(a) the Supervisory Information (Banks) Regulations, if the affiliate is a bank to which the Bank Act applies;
(b) the Supervisory Information (Authorized Foreign Banks) Regulations, if the affiliate is an authorized foreign bank to which the Bank Act applies;
(c) the Supervisory Information (Insurance Companies) Regulations, if the affiliate is a company, society, foreign company or provincial company to which the Insurance Companies Act applies; and
(d) the Supervisory Information (Trust and Loan Companies) Regulations, if the affiliate is a company to which the Trust and Loan Companies Act applies.
PROHIBITED DISCLOSURE
2. Subject to sections 3 and 4, an association shall not, directly or indirectly, disclose prescribed supervisory information relating to it or to any of its affiliates.
LIMITED DISCLOSURE
3. An association may disclose prescribed supervisory information referred to in section 2 to its affiliates or to its directors, officers, employees, auditors or legal advisors, or to those of its affiliates, if the association ensures that the information remains confidential.
4. An association may disclose prescribed supervisory information referred to in paragraph 1(1)(c) in a prospectus, a rights offering circular, an offering memorandum, a take-over bid circular or any other similar document filed in relation to the distribution of any of its securities if the association considers the information to be a material fact that is required to be disclosed by the laws of the relevant jurisdiction applicable to those securities.
COMING INTO FORCE
5. These Regulations come into force on the day on which they are registered.
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Supervisory Information (Authorized Foreign Banks) Regulations
Statutory Authority
Bank Act
Sponsoring Agency
Office of the Superintendent of Financial Institutions
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Supervisory Information (Trust and Loan Companies) Regulations.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 607 (see footnote g) and paragraph 668(a) (see footnote h) of the Bank Act (see footnote i), proposes to make the annexed Supervisory Information (Authorized Foreign Banks) Regulations.
Interested persons may make representations with respect to the proposed Regulations within thirty (30) days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.
Ottawa, March 23, 2000
MARC O'SULLIVAN
Assistant Clerk of the Privy Council
SUPERVISORY INFORMATION (AUTHORIZED FOREIGN BANKS) REGULATIONS
PRESCRIBED SUPERVISORY INFORMATION
1. (1) For the purposes of section 607 of the Bank Act and these Regulations, prescribed supervisory information in respect of an authorized foreign bank is the following information or any component of that information:
(a) any rating assigned to the authorized foreign bank to assess the soundness of its business in Canada;
(b) any stage of intervention assigned to the authorized foreign bank on the basis of the principles set out in the Guide to Intervention for Federal Financial Institutions;
(c) any order made in respect of the authorized foreign bank under section 617 of the Bank Act or any direction issued to it under section 615 of that Act; or
(d) any report prepared or recommendation made as a result of an annual or special examination of the authorized foreign bank by the Superintendent, including any related correspondence to or from the principal officer, directors or other officers of the authorized foreign bank.
(2) For the purposes of section 607 of the Bank Act and these Regulations, prescribed supervisory information in respect of an affiliate of an authorized foreign bank is the supervisory information prescribed by
(a) the Supervisory Information (Banks) Regulations, if the affiliate is a bank to which the Bank Act applies;
(b) the Supervisory Information (Cooperative Credit Associations) Regulations, if the affiliate is an association to which the Cooperative Credit Associations Act applies;
(c) the Supervisory Information (Insurance Companies) Regulations, if the affiliate is a company, society, foreign company or provincial company to which the Insurance Companies Act applies; and
(d) the Supervisory Information (Trust and Loan Companies) Regulations, if the affiliate is a company to which the Trust and Loan Companies Act applies.
PROHIBITED DISCLOSURE
2. Subject to sections 3 and 4, an authorized foreign bank shall not, directly or indirectly, disclose prescribed supervisory information relating to it or to any of its affiliates.
LIMITED DISCLOSURE
3. An authorized foreign bank may disclose prescribed supervisory information referred to in section 2 to its affiliates or to its directors, officers, employees, auditors or legal advisors, or to those of its affiliates, if the authorized foreign bank ensures that the information remains confidential.
4. An authorized foreign bank may disclose prescribed supervisory information referred to in paragraph 1(1)(c) in a prospectus, a rights offering circular, an offering memorandum, a take-over bid circular or any other similar document filed in relation to the distribution of any of its securities if the authorized foreign bank considers the information to be a material fact that is required to be disclosed by the laws of the relevant jurisdiction applicable to those securities.
COMING INTO FORCE
5. These Regulations come into force on the day on which they are registered.
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Supervisory Information (Banks) Regulations
Statutory Authority
Bank Act
Sponsoring Agency
Office of the Superintendent of Financial Institutions
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Statement, see the Supervisory Information (Trust and Loan Companies) Regulations.
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 637 (see footnote j) and paragraph 668(a) (see footnote k) of the Bank Act (see footnote l), proposes to make the annexed Supervisory Information (Banks) Regulations.
Interested persons may make representations with respect to the proposed Regulations within thirty (30) days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario, K1A 0H2.
Ottawa, March 23, 2000
MARC O'SULLIVAN
Assistant Clerk of the Privy Council
SUPERVISORY INFORMATION (BANKS) REGULATIONS
PRESCRIBED SUPERVISORY INFORMATION
1. (1) For the purposes of section 637 of the Bank Act and these Regulations, prescribed supervisory information in respect of a bank is the following information or any component of that information:
(a) any rating assigned to the bank to assess its financial condition;
(b) any stage of intervention assigned to the bank under the Guide to Intervention for Federal Financial Institutions;
(c) any order made in respect of the bank under subsection 485(3) of the Bank Act or any direction issued to it under section 645 of that Act;
(d) any report prepared or recommendation made as a result of an annual or special examination of the bank by the Superintendent, including any related correspondence to or from the directors or officers of the bank;
(e) any assessment by the Superintendent of the bank's compliance with the standards of sound business and financial practices established by the Canada Deposit Insurance Corporation; and
(f) any category in which the bank is classified under the Canada Deposit Insurance Corporation Differential Premiums By-law and any premium rate assigned to it and any annual premium determined for it under that By-law.
(2) For the purposes of section 637 of the Bank Act and these Regulations, prescribed supervisory information in respect of an affiliate of a bank is the supervisory information prescribed by
(a) the Supervisory Information (Authorized Foreign Banks) Regulations, if the affiliate is an authorized foreign bank to which the Bank Act applies;
(b) the Supervisory Information (Cooperative Credit Associations) Regulations, if the affiliate is an association to which the Cooperative Credit Associations Act applies;
(c) the Supervisory Information (Insurance Companies) Regulations, if the affiliate is a company, society, foreign company or provincial company to which the Insurance Companies Act applies; and
(d) the Supervisory Information (Trust and Loan Companies) Regulations, if the affiliate is a company to which the Trust and Loan Companies Act applies.
PROHIBITED DISCLOSURE
2. Subject to sections 3 and 4, a bank shall not, directly or indirectly, disclose prescribed supervisory information relating to it or to any of its affiliates.
LIMITED DISCLOSURE
3. A bank may disclose prescribed supervisory information referred to in section 2 to its affiliates or to its directors, officers, employees, auditors or legal advisors, or to those of its affiliates, if the bank ensures that the information remains confidential.
4. A bank may disclose prescribed supervisory information referred to in paragraph 1(1)(c) in a prospectus, a rights offering circular, an offering memorandum, a take-over bid circular or any other similar document filed in relation to the distribution of any of its securities if the bank considers the information to be a material fact that is required to be disclosed by the laws of the relevant jurisdiction applicable to those securities.
COMING INTO FORCE
5. These Regulations come into force on the day on which they are registered.
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S.C. 1999, c. 28, s. 144
S.C. 1991, c. 45
S.C. 1999, c. 28, s. 126
S.C. 1991, c. 47
S.C. 1999, c. 28, s. 117
S.C. 1999, c. 48
S.C. 1999, c. 28, s. 35(1)
S.C. 1999, c. 28, s. 64(1)
S.C. 1991, c. 46
S.C. 1999, c. 28, s. 42(2)
S.C. 1999, c. 28, s. 64(1)
S.C. 1991, c. 46
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