ARCHIVED — Vol. 149, No. 4 — February 25, 2015

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Registration

SOR/2015-29 February 6, 2015

BANK ACT

Regulations Amending the Annual Statement (Banks and Bank Holding Companies) Regulations

P.C. 2015-94 February 5, 2015

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsections 308(2) (see footnote a), 840(2) (see footnote b) and 978(1) (see footnote c) of the Bank Act (see footnote d), makes the annexed Regulations Amending the Annual Statement (Banks and Bank Holding Companies) Regulations.

REGULATIONS AMENDING THE ANNUAL STATEMENT (BANKS AND BANK HOLDING COMPANIES) REGULATIONS

1. Section 1 of the Annual Statement (Banks and Bank Holding Companies) Regulations (see footnote 1) is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

  • (e) a statement of comprehensive income for the financial year.

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

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Issues

Federally regulated financial institutions (FRFIs) are required by legislation to place annual financial statements before members or shareholders. The Annual Statement Regulations (the Regulations) prescribe the contents of these statements, which include a balance sheet, statement of income, statement of cash flows and statement of changes in shareholders’ equity. Until 2011, the content requirements in the Regulations were the same as the requirements under Canadian accounting standards, which are determined by the Canadian Accounting Standards Board. In 2011, the Board adopted the International Financial Reporting Standards that now require FRFIs to place before members or shareholders an additional statement that is not currently required by the Regulations: a statement of comprehensive income.

Objective

  • To ensure proper governance of FRFIs; and
  • To align the Regulations with current Canadian accounting standards.

Description

The Regulations are amended to require FRFIs to place before members or shareholders a statement of comprehensive income for the financial year.

“One-for-One” Rule

The “One-for-One” Rule does not apply as the amendment does not impose new administrative burden on business.

Small business lens

The small business lens does not apply, as the amendment does not impose costs on small business.

Rationale

The technical amendment will ensure proper governance of FRFIs by ensuring members or shareholders are provided with the annual financial statements that, according to current Canadian accounting standards, are necessary to assess the financial condition of a FRFI.

Also, the amendment will ensure that the Regulations align with current Canadian accounting standards.

This change will not result in additional regulatory burden for FRFIs, as they must already prepare a statement of comprehensive income as required by Canadian accounting standards.

Contact

Glenn Campbell
Director
Financial Institutions Division
Department of Finance
90 Elgin Street, 13th Floor
Ottawa, Ontario
K1P 5K7
Telephone: 613-369-3945
Email: finlegis@fin.gc.ca