By-law Amending the Canada Deposit Insurance Corporation Data and System Requirements By-law: SOR/2019-187

Canada Gazette, Part II, Volume 153, Number 13

Registration

SOR/2019-187 June 7, 2019

CANADA DEPOSIT INSURANCE CORPORATION ACT

The Board of Directors of the Canada Deposit Insurance Corporation, pursuant to paragraphs 11(2)(f.1) ^{footnote a} and (f.2)^{footnote a} of the Canada Deposit Insurance Corporation Act ^{footnote b}, makes the annexed By-law Amending the Canada Deposit Insurance Corporation Data and System Requirements By-law.

Ottawa, June 5, 2019

By-law Amending the Canada Deposit Insurance Corporation Data and System Requirements By-law

Amendments

1 The definitions Data Requirements and standardized data in subsection 1(1) of the Canada Deposit Insurance Corporation Data and System Requirements By-law ^{footnote 1} are repealed.

2 The heading before section 2 and sections 2 to 7 of the By-law are replaced by the following:

Obligations of Member Institutions

Capabilities

2 (1) For the purpose of facilitating the Corporation’s exercise of its functions under section 14 of the Act or in the event that an order is made under any of paragraphs 39.13(1)(a) to (c) of the Act, every member institution must be capable of

• (a) producing the following data, as of the determination time, in relation to its deposit liabilities — other than those posted in the records of a foreign branch of the member institution — and providing that data or making it available to the Corporation in a usable format no later than the time referred to in subsection (2):
  • (i) data that enables the Corporation to identify and contact each depositor and ascertain their preferred official language and their province of residence,
  • (ii) data that enables the Corporation to identify and group those deposit liabilities by
  • (A) unique depositor,
  • (B) eligibility to be insured by the Corporation,
  • (C) insurance category, and
  • (D) account type, and
  • (iii) the interest accrued and payable in relation to each deposit liability as of the determination date; and
• (b) temporarily preventing withdrawals of deposit liabilities or any portion of them according to account type within six hours after receiving instructions from the Corporation.

Time limit — provision of data

(2) The member institution must be capable of providing or making available to the Corporation the data referred to in paragraph (1)(a) no later than

• (a) in the case of the data referred to in subparagraphs (1)(a)(i) and (ii),
  • (i) if the determination time occurs on or after the determination date, the earlier of
  • (A) six hours after the determination time, and
  • (B) 4:00 p.m. on the day after the determination date, and
  • (ii) if the determination time occurs before the determination date, 4:00 p.m. on the day after the determination date; and
• (b) in the case of the data referred to in subparagraph (1)(a)(iii),
  • (i) if the determination time occurs on or after the determination date, the earlier of
  • (A) 30 hours after the determination time, and
  • (B) 4:00 p.m. on the second day after the determination date, and
  • (ii) if the determination time occurs before the determination date, 4:00 p.m. on the second day after the determination date.

Policies and procedures

(3) The member institution must develop and implement policies and procedures to ensure that it has the capabilities referred to in subsections (1) and (2).

Provision of information and evidence

3 Every member institution must, on request of the Corporation and within the period set out in the request,

• (a) provide to the Corporation a copy of the policies and procedures referred to in subsection 2(3);
• (b) inform the Corporation of the time by which all of the transactions made on a given day are processed and posted to the deposit records of the depositors of the member institution;
• (c) provide or make available to the Corporation the data referred to in paragraph 2(1)(a), including as of a time or date specified by the Corporation if there is no determination time or determination date;
• (d) demonstrate that any data provided or made available to the Corporation is consistent with the records of the member institution and explain any variances; and
• (e) provide or make available to the Corporation any other evidence that the member institution has the capabilities referred to in subsections 2(1) and (2).

Certification

4 Every member institution must, within 30 days after the day on which a request to that effect is sent by the Corporation, certify whether it has, in all material respects, the capabilities referred to in subsections 2(1) and (2) and whether it adheres to the policies and procedures referred to in subsection 2(3).

Timing of compliance

5 (1) Subject to subsections (2) and (3), an institution must

• (a) provide to the Corporation, within 30 days after the day on which it becomes a member institution, a plan to become compliant with this By-law; and
• (b) comply with this By-law as soon as feasible but within 18 months after the day on which it becomes a member institution.

Amalgamated member institutions

(2) A member institution that results from an amalgamation of two or more institutions must

• (a) in respect of the deposit liabilities of any amalgamating institution that became a member institution during the 18 months before the amalgamation date,
  • (i) provide to the Corporation, within 30 days after that date, a plan to become compliant with this By-law, and
  • (ii) comply with this By-law as soon as feasible but within 18 months after the day on which the amalgamating institution became a member institution;
• (b) in respect of the deposit liabilities of any amalgamating institution that was not a member institution before the amalgamation date,
  • (i) provide to the Corporation, within 30 days after that date, a plan to become compliant with this By-law, and
  • (ii) comply with this By-law as soon as feasible but within 18 months after the amalgamation date; and
• (c) in respect of its other deposit liabilities, comply with this By-law without delay.

Assumed deposit liabilities

(3) A member institution that assumes deposit liabilities of another institution must, in respect of the assumed liabilities,

• (a) provide to the Corporation, within 30 days after the day on which it assumes the deposit liabilities, a plan to become compliant with this By-law; and
• (b) comply with this By-law as soon as feasible but within 18 months after the day on which it assumes the deposit liabilities.

Coming into Force

3 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 paragraphs 11(2)(f.1) and (f.2) of the Canada Deposit Insurance Corporation Act (CDIC Act), the Board of Directors of the Canada Deposit Insurance Corporation (CDIC) is authorized to make by-laws respecting the information that the CDIC can require from member institutions with respect to their deposit liabilities, as well as the time and manner in which it is to be provided, and respecting the capabilities that the CDIC can require member institutions to have, including the capability to identify their deposit liabilities and temporarily prevent withdrawals of deposit liabilities, all with a view to facilitating the Corporation’s exercise of its functions under section 14 of the CDIC Act or in the event that an order is made under subsection 39.13(1) of the CDIC Act. The CDIC Board of Directors made the Canada Deposit Insurance Corporation Data and System Requirements By-law (By-law) on December 8, 2010, pursuant to this authority. The By-law requires member institutions to implement a method of identifying, capturing, organizing, and producing deposit liability data with the objective to ensure that in the event of failure, the member institution has certain data readily available and organized properly to allow the CDIC to undertake a resolution. The By-law was previously amended on March 5, 2015.

Issues

The By-law Amending the Canada Deposit Insurance Corporation Data and System Requirements By-law (Amending By-law) will facilitate the update and implementation of technical specifications that reflect the enhanced coverage framework by delinking the technical specifications from the By-law. Technical amendments are also needed to align the By-law with the Canada Deposit Insurance Corporation Differential Premiums By-law to clarify that an attestation surrounding compliance in all material respects must be provided within 30 days following a request by the Corporation, to clarify the need for member institutions to have appropriate policies and procedures in place to ensure By-law compliance, and to clarify that members must be capable of explaining any instances where a data extract is inconsistent with the member institution’s records. Further amendments address unique situations that are currently not covered in the By-law, such as amalgamations and assumption of deposit liabilities, and which result in compliance issues for member institutions.

Objectives

The Amending By-law will provide greater clarity to member institutions on the applicable requirements and provide greater flexibility to the Corporation and member institutions to facilitate compliance in the context of the enhanced coverage framework.

Description

The table below provides a description of the amendments.

Amending By-law Section	By-law Section	Explanation
1, 2	1(1), 2(1) and 2(2)	To repeal the definitions of "Data Requirements" and "standardized data," and to reorganize certain sections of the By-law so that the Data Requirements would no longer be incorporated by reference.
2	2(3)	Amendments formalize the current practice that member institutions develop and implement policies and procedures that ensure compliance with the By-law.
2	3	Amendments clarify the information that must be provided to the Corporation upon request.
2	4	Amendments reflect that member institutions must certify compliance in all material respects with the By-law within 30 days after a request by the Corporation as opposed to annually as part of the Return of Insured Deposits.
2	5(1), (2) and (3)	Amendments reflect that a member institution is required to provide the Corporation with a plan to become compliant with the By-law not later than 30 days after it becomes a member institution, and that it must comply with the By-law as soon as feasible but no later than 18 months after the day on which it becomes a member institution. Amendments also require such a plan where a member institution amalgamates with another institution or where a member institution assumes deposit liabilities of another institution.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small business.

Alternatives

There are no available alternatives. The amendments must be done by way of by-law.

Consultation

The Amending By-law was prepublished in Part I of the Canada Gazette on March 16, 2019, for a 30-day comment period. No substantive comments were received.

Rationale

The Amending By-law will ensure the By-law is clear, flexible and enforceable. The Amending By-law will achieve the stated objective and address the identified issues. The Amending By-law will not impose any additional regulatory costs or administrative burden on industry.

Implementation, 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

Emiel van der Velden
Director
Insurance
Canada Deposit Insurance Corporation
50 O’Connor Street, 17th Floor
Ottawa, Ontario
K1P 6L2
Telephone: 613‑943‑2773
Email: evandervelden@cdic.ca