By-law Amending the Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law: SOR/2023-37

Canada Gazette, Part II, Volume 157, Number 6

Registration
SOR/2023-37 March 3, 2023

CANADA DEPOSIT INSURANCE CORPORATION ACT

The Board of Directors of the Canada Deposit Insurance Corporation makes the annexed By-law Amending the Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law under paragraph 11(2)(g)footnote a and subsection 25.1(1)footnote b of the Canada Deposit Insurance Corporation Act footnote c.

Ottawa, March 3, 2023

Leah Anderson
President and Chief Executive Officer of the Canada Deposit Insurance Corporation

By-law Amending the Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law

Amendments

1 The long title of the Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law footnote 1 is replaced by the following:

Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law

2 Section 1 of the By-law and the heading before it are repealed.

3 Subsection 2(1) of the By-law is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f):

Coming into Force

4 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.)

Background

Pursuant to paragraph 11(2)(g) and subsection 25.1(1) of the Canada Deposit Insurance Corporation Act, the Canada Deposit Insurance Corporation (the CDIC) board of directors is authorized to prescribe such practices by a member institution that warrant a premium surcharge. The Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law (the Premium Surcharge By-law) prescribes those practices. The Premium Surcharge By-law was made on January 26, 1994, and was amended on July 26, 2001, April 15, 2005, October 8, 2008, and December 8, 2010.

Issues

On March 2, 2022, the CDIC made the Canada Deposit Insurance Corporation Eligible Financial Contracts By-law (the EFC By-law). The EFC By-law prescribes the federal member institutions that must amend their eligible financial contracts (EFCs) so that the stay provisions in the Canada Deposit Insurance Corporation Act apply to those EFCs. The EFC By-law also provides a significant transition period.

Non-compliance with the EFC By-law creates a risk to an orderly resolution of the member institution, and to the Canadian financial system as a whole. To address that risk, the CDIC proposes amending the Premium Surcharge By-law to add non-compliance with the EFC By-law as a practice that warrants a premium surcharge.

Objective

The main objective of the By-law Amending the Canada Deposit Insurance Corporation Prescribed Practices Premium Surcharge By-law (the Amending By-law) is to add non-compliance with any of the provisions of the EFC By-law as a practice that warrants a premium surcharge.

Description

The following table provides more details about the Amending By-law.

Amending By-law section Explanation
1 Replaces the long title of the By-law with its short title
2 Repeals the short title, as it is no longer necessary
3 Adds failing to comply with one or more provisions of the EFC By-law as a practice that warrants a premium surcharge

One-for-one rule

The one-for-one rule does not apply to this Amending By-law.

Small business lens

The small business lens does not apply to this Amending By-law.

Alternatives

There are no available alternatives. It must be done by way of a by-law.

Consultation

CDIC consulted with industry participants and other stakeholders on EFCs over a 12-week period in 2019 and that input, where appropriate, was incorporated into the EFC By-law. Further consultation on the EFC By-law was sought through prepublication in the Canada Gazette, Part I. Therefore, no pre-consultation on this Amending By-law is necessary, as this is a consequential amendment to address enforcement of the EFC By-law. Consultation has been sought through prepublication in the Canada Gazette, Part I.

Rationale

The Amending By-law will address the identified risk of non-compliance with the EFC By-law. The Amending By-law is not expected to impose any additional regulatory costs or administrative burden on member institutions.

Implementation, compliance and enforcement, and service standards

The Amending By-law comes into force on the day on which it is registered. There are no compliance or enforcement issues.

Contact

Tessa Warmelink
Senior Legal Counsel
Canada Deposit Insurance Corporation
50 O’Connor Street, 17th Floor
Ottawa, Ontario
K1P 6L2
Telephone: 613‑324‑9439
Email: twarmelink@cdic.ca