Compensation Regulations: SOR/2018-59

Canada Gazette, Part II: Volume 152, Number 8

Registration

March 27, 2018

CANADA DEPOSIT INSURANCE CORPORATION ACT

P.C. 2018-338 March 26, 2018

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 39.28(1) footnotea of the Canada Deposit Insurance Corporation Act footnoteb, makes the annexed Compensation Regulations.

Compensation Regulations

Interpretation

Definitions

1 (1) The following definitions apply in these Regulations.

Same class

(2) For the purposes of these Regulations, shares and liabilities of a federal member institution are of the same class if

Persons

Prescribed persons

2 (1) For the purposes of subsection 39.23(1) of the Act and subject to subsections (2) to (4), a prescribed person is a person who, immediately before the making of an order under subsection 39.13(1) of the Act with respect to a federal member institution, owns, directly or through an intermediary, any of the following:

Exclusion — assignee or transferee

(2) A prescribed person referred to in subsection (1) includes the person’s successor in interest but does not include an assignee or transferee.

Exclusion — amounts paid

(3) A person is not a prescribed person with respect to any liability if, after the order is made, the amounts owing under the liability’s terms are paid in full.

Exclusion — intermediary

(4) A person is not a prescribed person with respect to any shares or liabilities if, immediately before the making of the order, they own the shares or liabilities solely as an intermediary.

Definitions

(5) The following definitions apply in this section.

intermediary means a natural person, corporation, trust, partnership or entity that, in the ordinary course of its business, owns or holds shares or liabilities on behalf of another person and is acting in that capacity, other than a natural person, corporation, trust, partnership or entity that, in the ordinary course of its business, manages or administers a pension fund, a mutual fund, an investment fund or similar type of fund and is acting in that capacity. (intermédiaire)

liability means a debt of at least $100 owed immediately before the making of an order under subsection 39.13(1) of the Act by the federal member institution and excludes any claim against the federal member institution if

Compensation

Amount of compensation

3 (1) For the purposes of determining the amount of compensation to which a prescribed person is entitled, the Corporation must estimate the liquidation value and resolution value of the person’s shares or liabilities that are referred to in subsection 2(1).

Liquidation value

(2) The liquidation value of a share or liability is the estimated value that the prescribed person would have received in respect of the share or liability if an order under the Winding-up and Restructuring Act to wind up the federal member institution had been made immediately before the making of an order under subsection 39.13(1) of the Act in respect of the institution.

Assumptions

(3) The liquidation value is to be estimated

Resolution value

(4) The resolution value of a share or liability is the total of the estimated value of the following:

Determination of compensation

(5) Subject to subsection (7), the amount of compensation to which a prescribed person is entitled with respect to each share or liability is determined by the formula

For greater certainty

(6) For greater certainty, a prescribed person is not entitled to compensation if the amount of compensation determined under subsection (5) is zero or a negative value.

Difference in time

(7) In determining the amount of compensation to which a prescribed person is entitled, the Corporation must consider the difference between the estimated day on which the liquidation value would be received and the estimated day on which the resolution value is, or would be, received.

Same class

(8) Every offer of compensation in respect of the shares or liabilities of a federal member institution that are of the same class must be calculated using the same amount of compensation, in the case of

Notice — offer of compensation

4 (1) Within a reasonable period of time after the day set out in subsection (2), the Corporation must give each prescribed person

Day

(2) A day is

Contents of notice

5 The notice referred to in section 4 must

Publication

6 A summary of the notice referred to in section 4 must be published in the Canada Gazette and on the website of the federal member institution.

Payment of compensation

7 The Corporation must pay a prescribed person any compensation offered under paragraph 4(1)(a) if

Appointment of assessor

8 An assessor is to be appointed under section 39.26 of the Act if the condition referred to in paragraph 5(d) is met within the period referred to in paragraph 5(c).

Corporation’s notice to dissenters

9 Within 45 days after the day on which an assessor is appointed, the Corporation must provide, to each prescribed person whose compensation is to be determined by the assessor, a notice of the appointment of the assessor indicating that the prescribed person is bound by the assessor’s determination of the amount of compensation to be paid which may be lower or higher than that contained in the offer.

Assessor’s determination

10 For the purpose of reviewing a decision made by the Corporation and determining the amount of compensation to be paid to a prescribed person under section 39.26 of the Act, the assessor must consider

Assessor’s notice

11 (1) The assessor must provide, to every prescribed person whose compensation is determined by the assessor, a notice

Copy to Corporation

(2) The assessor must provide the Corporation with a copy of each notice.

Payment of compensation

12 The Corporation must pay a prescribed person the compensation that they are entitled to receive within

Coming into Force

S.C. 2016, c. 7

13 These Regulations come into force on the day on which section 142 of the Budget Implementation Act, 2016, No. 1 comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

N.B. The Regulatory Impact Analysis Statement for these Regulations appears appears following SOR/2018-57, Bank Recapitalization (Bail-in) Conversion Regulations.