Financial Community

Notice: The Government of Canada has announced that changes to the CDIC Act to modernize and enhance CDIC deposit protection will come into force on April 30, 2020 and April 30, 2021. PLEASE NOTE: Until then, current coverage rules apply.

Annual disclosure by trustees

In April of each year, CDIC member institutions will write to trustees for a trust deposit with two or more beneficiaries to request these depositors to supply the CDIC member institution, by May 30 of that year, with the amount or percentage of each beneficial interest in the deposit in the trust as of April 30. This requirement ensures that the trusteeship is appropriately recorded in the records of the member institution.

If you are a trustee that holds funds in trust for only one beneficiary, you do not need to respond to this request, but it is a good reminder to ensure that beneficiary information is up to date.

It is the responsibility of the depositor that is acting as a trustee (i.e., the account holder, customer) to ensure that all required disclosures are made to its financial institution. Any information that is sent to CDIC inadvertently will not be transferred to your financial institution.

If the trusteeship is appropriately disclosed on the records of the member institution, and at such time as is required, the eligible deposit held for multiple beneficiaries will be insured for up to $100,000 per beneficiary. For example, if a grandmother set up a trust for seven grandchildren and observed the trust disclosure requirements each year, CDIC would insure eligible deposits in the trust for up to $700,000 (7 x $100,000).

If the trusteeship is not appropriately disclosed on the records of the member institution CDIC can aggregate all eligible deposits within a trust and insure them for up to $100,000, regardless of the number of beneficiaries. Had the grandmother in the example above failed to meet the disclosure requirements, eligible deposits in the trust would be aggregated and insured up to $100,000, to be shared between the seven grandchildren in the event the institution fails and insured deposits are reimbursed.

Changes to beneficiary information after a failure

After a failure, trustees have up to 90 days to provide or update beneficiary information on the records of the member institution so that CDIC can reimburse insured deposits held in trust. This includes:

  • The full name and address of each beneficiary.
  • The portion of the trust belonging to each beneficiary (expressed as a percentage or dollar amount).

Trustees will need to provide this information to CDIC (directly or via the institution’s liquidator) in an electronic format − such as a spreadsheet that can be readily processed. If this is not provided by the 90th day after the failure date, affected trust deposits may not be reimbursed.

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