This section provides information and resources for CDIC member institutions, brokers and other stakeholders within the financial community as well as trustees.
The CDIC Act sets out how different types of deposits receive coverage under the deposit insurance framework. It specifies the key requirements that stakeholders in the financial community must meet to ensure that these deposits are protected by CDIC. As of April 30th, 2022, important changes to the rules for deposits held in trust are in effect and impact the broker community (nominee brokers), professional trustees and trustees who hold deposits in trust for others. Please refer to the appropriate sections below to see how these changes impact specific groups.
For CDIC member institutions, you will be able to find legislation, by-laws, guidance and necessary forms to help you comply with CDIC’s regulatory requirements. If you cannot find what you’re looking for or have any questions, please feel free to email us at members@cdic.ca.
Brokers and Other Financial Professionals
Rules around deposit protection, especially for deposits held in trust, can be complicated. With changes to reporting requirements in effect as of April 30th, 2022, it is especially important to familiarize yourself with how trust deposit coverage works. To help you, CDIC has developed resources to explain how deposit insurance coverage works for the deposits you place for your clients and the various requirements that must be met to ensure these deposits are protected in the event of a bank failure.
For simplicity, many of our documents and resources refer to “brokers.” In these instances, a reference to brokers includes financial advisors, securities dealers, investment dealers, broker-dealers, and others who purchase deposits from financial institutions that are members of CDIC either on behalf of (i.e. in nominee name) or in the name of their clients (i.e. in client name).
Trustees
CDIC’s rules for trust deposits changed on April 30, 2022. These changes introduced new categories of trustees with unique disclosure requirements.
The categories of trustees include:
Trustees who hold deposits in trust at a CDIC Member Institution and who qualify as a Professional Trustee (Professional Trustees); and
Trustees who hold deposits in trust at a CDIC Member Institution in various capacities (professional or otherwise) but do not qualify as a professional trustee (Trustees)
To further assist trustees and professional trustees in understanding and implementing the new requirements, CDIC has developed the following downloadable presentation which provides an overview of the legislative amendments. It is strongly recommended that all trustees download and review the presentation.
Not sure if you hold funds in a professional capacity? Please use the Trustee Decision Tree to find out:
Public Trustee: A public trustee of a province or a similar public official whose duties involve holding moneys in trust for others qualifies as a Professional Trustee.
Federal, Provincial, or Municipal government, department or agency: A federal, provincial or municipal government, or a department or agency of such a government qualifies as a Professional Trustee.
Lawyer or Notary: A lawyer or partnership of lawyers, a law corporation, or a notary or partnership of notaries in the province of Quebec, when they act in that capacity as a trustee of moneys for others qualifies as a Professional Trustees.
Person: A Person includes an individual, an entity (such as a partnership, association, or corporation) or personal representative.
In the Course of Business: “In the course of business” includes the activities of a Person in their professional capacity. Where the Person is not an individual, this means all normal business activities.
Required by Law: A person is “required by law” where by, or under, legislation, regulation, or any other legal enactment a Person is required to hold funds in trust for another or a trustee relationship is created where the Person must act as a trustee for another.
Rules: Rules may be found in the form of regulations, bylaws, professional requirements, or any other binding rule that governs the, operation, license, and/or conduct of a person. The rules as set out by the Regulatory or Self-Regulatory Organization do not have to make specific provision for the creation of a trustee relationship, or how and why the money held in trust is deposited or otherwise kept.
Other Regulatory or Self-Regulatory Organization: Regulatory and self-regulatory organizations are those organizations created by, or under, statute with the power to make binding rules or regulations with respect to securities law, or those organizations that have delegated authority to regulate the conduct of their members and/or other securities market participants. Regulatory and self-regulatory organizations must have a mandate to regulate the operation, license and/or conduct of the Person.
Audits Compliance: An “Audit” includes any examination, investigation, or other review of the conduct or affairs of the Person. The audit must be conducted by, on behalf of, the Regulatory or Self-regulatory organization. The audit must, at least in part, concern compliance with the rules of the Regulatory or Self-Regulatory organization to which the Person is subject. The Audit may be conducted at set times or may be conducted at the discretion of the Regulatory or Self-Regulatory organization.
CDIC Deposit Insurance
CDIC insures eligible deposits held at CDIC Member Institutions. CDIC insures eligible deposits to a maximum of $100,000 per insurance category, one of which is deposits held in trust.
For more information on eligible deposits and how CDIC protects your deposits, visit “How deposit insurance works”.
Trustee
The answers provided indicate you do not qualify as a Professional trustee. CDIC continues to insure eligible deposits held in trust at CDIC Member Institutions up to $100,000 per beneficiary.
Trustees who hold deposits in trust at CDIC Member Institutions must meet certain disclosure requirements to ensure they receive appropriate deposit insurance coverage.
The answers provided indicate you may qualify under the CDIC Act as a Professional Trustee.
As of April 30th 2022, Professional Trustees who hold deposits in trust at CDIC Member Institutions may opt into the Professional Trustee Disclosure Rules.
Trustees who hold eligible deposits in trust at a CDIC Member institution continue to receive separate CDIC deposit insurance protection on those deposits. To ensure appropriate deposit insurance coverage, Trustees must adhere to new disclosure requirements. For more information about the new disclosure requirements and how to meet them, please consult For Trustees.
Trustees who hold eligible deposits in trust at a CDIC member institution in their professional capacity may qualify as a Professional Trustee. Professional Trustees have the option to designate accounts as Professional Trustee Accounts, which have less onerous disclosure requirements. For more information on who qualifies as a Professional Trustee, and how the amended disclosure requirements work, please consult For Professional Trustees.
If you can’t find what you’re looking for or have any questions, please feel free to email us at questions@cdic.ca.
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