ARCHIVED — Vol. 147, No. 3 — January 30, 2013

Registration

SOR/2013-6 January 18, 2013

CANADA DEPOSIT INSURANCE CORPORATION ACT

By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law

The Board of Directors of the Canada Deposit Insurance Corporation, pursuant to paragraph 11(2)(g) (see footnote a) and subsection 21(2) (see footnote b) of the Canada Deposit Insurance Corporation Act (see footnote c), makes the annexed By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law.

Ottawa, December 5, 2012

The Minister of Finance, pursuant to subsection 21(3) (see footnote d) of the Canada Deposit Insurance Corporation Act (see footnote e), approves the annexed By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law, made by the Board of Directors of the Canada Deposit Insurance Corporation.

Ottawa, January 15, 2013

JAMES M. FLAHERTY
Minister of Finance

BY-LAW AMENDING THE CANADA DEPOSIT INSURANCE CORPORATION DIFFERENTIAL PREMIUMS BY-LAW

AMENDMENTS

1. (1) The portion of item 1.1 of item 1 of the Reporting Form set out in Part 2 of Schedule 2 to the Canada Deposit Insurance Corporation Differential Premiums By-law (see footnote 1) beginning with the heading “Elements” and ending before item 1.1.1 is replaced by the following:

Elements

Use the instructions below to arrive at the elements of the formula.

Refer to the Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR) form, Reporting Manual, “Basel Capital Adequacy Reporting (BCAR)” tab, completed in accordance with that Manual as of the end of the fiscal year ending in the year preceding the filing year.

(2) The portion of item 1.2 of item 1 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law beginning with the heading “Elements” and ending before item 1.2.1 is replaced by the following:

Elements

Use the instructions below to arrive at the elements of the formula.

Refer to the Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR) form, Reporting Manual, “Basel Capital Adequacy Reporting (BCAR)” tab, completed in accordance with that Manual as of the end of the fiscal year ending in the year preceding the filing year.

(3) The portion of item 1.3 of item 1 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law beginning with the heading “Elements” and ending before item 1.3.1 is replaced by the following:

Elements

Use the instructions below to arrive at the elements of the formula.

Refer to the Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR) form, Reporting Manual, “Basel Capital Adequacy Reporting (BCAR)” tab, completed in accordance with that Manual as of the end of the fiscal year ending in the year preceding the filing year.

2. The portion of item 2 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law beginning with the heading “Elements” and ending before element 2.2 is replaced by the following:

Elements

Use the instructions below to arrive at the elements of the formula.

Refer to the following documents:

  • (a) the Consolidated Statement of Comprehensive Income, Retained Earnings and AOCI, Reporting Manual, “Income Statement” tab, completed in accordance with that Manual as of the fiscal year ending in the year preceding the filing year; and
  • (b) the Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR) form, Reporting Manual, “Basel Capital Adequacy Reporting (BCAR)” tab, completed in accordance with that Manual as of the end of the fiscal year ending in the year preceding the filing year.

2.1 Net Income or Loss

The net income or loss attributable to equity holders and non-controlling interests (the latter to be reported as a negative number) is the amount set out in item 31 of the Consolidated Statement of Comprehensive Income, Retained Earnings and AOCI.

3. Paragraph (c) under the heading “Elements” in item 6 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law is replaced by the following:

  • (c) the Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR) form, Reporting Manual, “Basel Capital Adequacy Reporting (BCAR)” tab, completed in accordance with that Manual as of the end of the fiscal year ending in the year preceding the filing year.

4. (1) The portion of item 7 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law beginning with the heading “Elements” and ending before the heading “Assets for Years 1 to 4” is replaced by the following:

Elements

Use the instructions below to arrive at the elements of the formula.

Refer to Section I of the Consolidated Monthly Balance Sheet, Reporting Manual, “Balance Sheet” tab, completed in accordance with that Manual as of the end of the fiscal year indicated under the heading “Assets for Years 1 to 4” below and to the Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR) form, Reporting Manual, “Basel Capital Adequacy Reporting (BCAR)” tab, completed in accordance with that Manual as of the end of the fiscal year indicated under the heading “Assets for Years 1 to 4” below.

(2) The portion of item 7 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law under the heading “Assets for Years 1 to 4” beginning with the expression “For fiscal years ending in 2008, the total of” and ending before the expression “For fiscal years ending in 2009, the total of” is repealed.

(3) Paragraphs (a) and (b) after the expression “For fiscal years ending in 2011 or later, the total of” in item 7 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law are replaced by the following:

  • (a) the amount of net on- and off-balance sheet assets set out for item “Q” of Schedule 1 – Ratio and Assets to Capital Multiple Calculations of the BCAR form plus the transitional adjustment for grandfathered treatment of certain assets not derecognized under IFRS set out for item “A” of Schedule 45 – Balance Sheet Coverage by Risk Type and Reconciliation to Consolidated Balance Sheet of the BCAR form;
  • (b) the total of the amounts set out in the column “Total” for items 1(a)(i)(A)(I) to (X) (Securitized Assets – Unrecognized – Institution’s own assets (bank originated or purchased) – Traditional securitizations) of Section I – Memo Items of the Consolidated Monthly Balance Sheet; and


COMING INTO FORCE

5. 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 (“CDIC”) made the Canada Deposit Insurance Corporation Differential Premiums By-law (the “By-law”) on March 3, 1999, pursuant to subsection 21(2) and paragraph 11(2)(g) of the Canada Deposit Insurance Corporation Act (the “CDIC Act”). Subsection 21(2) of the CDIC Act authorizes the CDIC Board of Directors to make by-laws establishing a system of classifying member institutions into different categories, setting out the criteria or factors the CDIC will consider in classifying members into categories, establishing the procedures the CDIC will follow in classifying members, and fixing the amount of, or providing a manner of determining the amount of, the annual premium applicable to each category. The CDIC Board of Directors amended the By-law on January 12 and December 6, 2000; July 26, 2001; March 7, 2002; March 3, 2004; February 9 and April 15, 2005; February 8 and December 6, 2006; December 3, 2008; December 2, 2009; December 8, 2010; and December 7, 2011.

The CDIC annually reviews the By-law to ensure that it remains up to date. As a result of the review, it was noted that technical amendments needed to be made to Schedule 2, Part 2, Reporting Form (Reporting Form) to reflect changes to regulatory forms. The changes are reflected in the By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law (the “Amending By-law”).

The following table provides more detail about the amendments, which are all technical in nature.

AMENDING BY-LAW SECTION(S)

EXPLANATION

 

Schedule 2, Part 2, Reporting Form

1

Elements in 1.1, 1.2 and 1.3 of Item 1, Capital Adequacy Measures

  • The Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR form) now forms part of the Office of the Superintendent of Financial Institutions (OSFI) Reporting Manual.

2

Elements and 2.1 of Item 2, Return on Risk-Weighted Assets (%)

  • The Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR form) now forms part of the OSFI Reporting Manual.

  • Line reference in the Consolidated Statement of Comprehensive Income, Retained Earnings and AOCI (Income Statement) to net income or loss has changed.

3

Elements of Item 6, Efficiency Ratio (%)

  • The Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR form) now forms part of the OSFI Reporting Manual.

4

Elements of Item 7, Three-Year Moving Average Asset Growth (%)

  • The Basel II Capital Adequacy Reporting – Credit, Market and Operational Risk (BCAR form) now forms part of the OSFI Reporting Manual.

  • Since this element uses four years of asset data, the measure has been modified such that the data is taken from the BCAR form in effect for the specific year.

  • For fiscal years ending after 2010, assets now to include those assets grandfathered for Assets to Capital Multiple calculation purposes.

  • Title of Securitized assets changed.

5

By-law comes into force on registration.


Alternatives

There are no available alternatives. The CDIC Act specifically provides that the criteria or factors to be taken into account in determining the category in which a member institution is classified and fixing or establishing the method of determining the amount of the annual premium applicable to each category may only be made by by-law.

Benefits and costs

No additional costs should be attributed directly to these changes.

Consultation

As the changes are technical in nature, consultation took place through prepublication in the October 20, 2012, edition of Part I of the Canada Gazette. 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
Ottawa, Ontario
K1P 5W5
Telephone: 613-943-1976
Fax: 613-992-8219
Email: schisholm@cdic.ca