COOPERATIVE CREDIT ASSOCIATIONS ACTBANK ACTTRUST AND LOAN COMPANIES ACTDeposit Type Instruments RegulationsP.C.2011-50820113
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His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 458.3a, 459.4b, 575.1c and 576.2d of the Bank Acte, sections 385.252f and 385.28g of the Cooperative Credit Associations Acth and sections 443.2i and 444.3j of the Trust and Loan Companies Actk, hereby makes the annexed Deposit Type Instruments Regulations.S.C. 2009, c. 2, s. 271S.C. 2007, c. 6, s. 37S.C. 2009, c. 2, s. 274S.C. 2007, c. 6, s. 93S.C. 1991, c. 46S.C. 2009, c. 2, s. 278S.C. 2007, c. 6, s. 170S.C. 1991, c. 48S.C. 2009, c. 2, s. 291S.C. 2007, c. 6, s. 368S.C. 1991, c. 45InterpretationDefinitionsThe following definitions apply in these Regulations.business day means a day other than Saturday or a holiday. (jour ouvrable)deposit type instrument means a product that is issued in Canada by an institution, that is related to a deposit and that specifies a fixed investment period and a fixed rate of interest; ora variable rate of interest that is calculated on the basis of the institution’s prime lending rate or bankers’ acceptance rate. (instrument de type dépôt)institution means[Repealed, SOR/2021-181, s. 110][Repealed, SOR/2021-181, s. 110]a retail association, as defined in section 2 of the Cooperative Credit Associations Act; ora company, as defined in section 2 of the Trust and Loan Companies Act. (institution)interest, in relation to a deposit type instrument, includes any return payable under the instrument by an institution in respect of the deposit. (intérêt)SOR/2021-181, s. 110Manner of DisclosureClear and simple languageAny disclosure that is required to be made by an institution under these Regulations must be made in language, and presented in a manner, that is clear, simple and not misleading.Disclosure in Respect of the Issuance of a Deposit Type InstrumentInformation to be disclosedAt or before the time an institution enters into an agreement with a person for the issuance of a deposit type instrument, the institution must disclose the following information to the person, orally and in writing:the annual rate of interest in respect of the instrument, if the rate of interest is fixed;if the rate of interest is variable,how the rate of interest is determined,the prime lending rate or the bankers’ acceptance rate, as the case may be, that is used for the calculation of the rate of interest,the prime lending rate or the banker’s acceptance rate in effect when the information is disclosed, andhow the person may obtain the rate of interest from the institution during the investment period;any charges in respect of the instrument;when interest is calculated and paid under the instrument;the dates on which the investment period specified in the instrument begins and ends;whether the instrument may be redeemed prior to maturity and, if so, the effect of early redemption on the interest payable;if the agreement provides that the issuance of the instrument may be cancelled within a specified period, the duration of the period;if the agreement provides that after the maturity of the instrument a new instrument may be issued to the person without a further agreement being entered into, the fact that a new instrument may be issued without a further agreement, the conditions under which a new instrument may be issued without a further agreement andwhether its rate of interest is fixed or variable, and the rate or method for determining the rate,its investment period, andany charges related to its issuance or the cancellation of its issuance; andif the instrument relates to a deposit that is not eligible for deposit insurance coverage by the Canada Deposit Insurance Corporation, the fact that it is not eligible.Exception: agreements entered into by telephoneIn the case of an agreement for the issuance of a deposit type instrument that is entered into by telephone, the institution is not required to provide the disclosure referred to in subsection (1) in writing on or before entering into the agreement. However, the institution must provide the written disclosure after entering into the agreement.Exception: agreements entered into by electronic means or by mailIn the case of an agreement for the issuance of a deposit type instrument that is entered into by electronic means or by mail, the institution is not required to provide the disclosure referred to in subsection (1) orally. However, before entering into the agreement the institution must disclose, in addition to the written disclosure referred to in subsection (1), the telephone number of a person who is knowledgeable about the terms and conditions of the instrument.New instruments issued without further agreementIf a new instrument is issued to a person pursuant to an agreement referred to in paragraph (1)(h), the institution must disclose in writing the information concerning the instrument referred to in subsection (1) to the person without delay after the instrument is issued.SOR/2016-142, s. 7(F)SOR/2020-47, s. 17Calculation of time — disclosure by mailAn institution that provides the written disclosure referred to in section 3 by mail is considered to have provided the disclosure five business days after the postmark date.Subsequent DisclosureInformation — amendmentsBefore making an amendment to any terms or conditions of a deposit type instrument, the institution must disclose the amendment, and its potential impact on the interest payable, in writing to the person to whom the instrument was issued.Information — current valueAn institution that issues a deposit type instrument must, if requested by the person to whom it is issued, disclose to the person without delay the amount of the principal and accrued interest on the day the request was made.Information — redemption before maturityAn institution that redeems a deposit type instrument before the end of the investment period must, before redeeming the instrument, disclose to the person to whom the instrument was issued the amount of the principal and accrued interest, any penalty or charge for the redemption and the net amount payable by the institution on redemption.AdvertisementsRequired content — all advertisementsIn each of its advertisements for deposit type instruments, an institution must disclose how the public may obtain information about the instruments.Required content — advertisements referring to an instrument’s features or interest payableIn each of its advertisements for deposit type instruments that refer to features of deposit type instruments or the interest payable under them, an institution must also disclosethe manner in which interest is to be accrued and any limitations in respect of the interest payable; andif the instruments relate to deposits that are not eligible for deposit insurance coverage by the Canada Deposit Insurance Corporation, the fact that they are not eligible.ExceptionParagraph (2)(b) does not apply to an institution to which subsection 378.2(2) of the Cooperative Credit Associations Act or subsection 413.1(2) of the Trust and Loan Companies Act applies.SOR/2021-181, s. 111Cancellation Periods for Certain InstrumentsNew instruments issued without further agreementAn institution must allow a person to whom a new instrument is issued pursuant to an agreement referred to in paragraph 3(1)(h) to cancel the issuance of the instrument within at least 10 business days after the day of its issuance.Consequential Amendment[Amendment]Coming into ForceNovember 1, 2011These Regulations come into force on November 1, 2011.SOR/2021-1812022-06-29SOR/2020-472020-03-16