The Government of Canada has made important changes to the rules governing deposit insurance protection for deposits held “in trust” at CDIC member institutions. The changes take effect April 30, 2022 and introduce new disclosure requirements for Trustees.
If you are a Trustee who holds eligible deposits in trust at a CDIC Member Institution in your professional capacity, you may be a Professional Trustee. Professional Trustees can choose to benefit from less onerous disclosure requirements. For more information, please visit Professional Trustees.
Not sure if you hold funds in a professional capacity? Please use the Trustee Decision Tree to find out:
Infographic – Trustee Decision Tree (Download PDF – 150 KB)
Rules for Trustees:
CDIC calculates deposit insurance coverage based on the information held at our member institutions. As a trustee, there are specific rules you need to follow to ensure the funds you hold in trust for your beneficiaries receive optimal deposit insurance protection. The following FAQs will help guide you through these rules and what you need to do to meet them.
- What are the new rules for trustees?
- Why are these new rules important?
- How will the new rules differ from the current ones?
- Do the new rules change how the deposit I hold for my beneficiaries are protected?
- When do these new rules take effect?
- Is there anything I should do now to ensure I am ready for April 30, 2022?
- How do I stay informed?
What are the new rules for trustees?
The new disclosure rules for trustees help ensure the CDIC member institution holding your trust deposits knows about:
- you (the trustee),
- who you are holding the funds for (your beneficiary or beneficiaries)
- the “trust” relationship between you and the persons for whom you are holding the deposit.
If you place, or hold, deposits in trust at a CDIC Member Institution, you need to ensure the following information is on their records for each deposit you hold:
- That the deposit is held in trust;
- That you are the trustee or co-trustee;
- your legal name and address along with that of each co-trustee;
- The name and address of each beneficiary (even if there is only a single beneficiary); and
- The amount, or percentage, of each beneficiary’s interest in the trust deposit (CDIC insures eligible trust deposits up to $100,000 for each beneficiary identified).
For more information please see What you Need to Know – Trustees (PDF 83 KB)
Why are these new rules important?
The new rules are important because they affect how CDIC protects deposits held by trustees. If a member institution were to fail, CDIC would use the information on the records of that institution to determine the trustee’s deposit insurance coverage.
Failure by a trustee to provide the required information may affect the deposit insurance coverage and CDIC’s ability to make an accurate deposit insurance calculation.
How will the new rules differ from the current ones?
The new rules that take effect on April 30, 2022, will not substantially change the requirements that most trustees need to meet to ensure the deposits they hold for their beneficiaries remain protected by CDIC. However, there are some key differences you should know about. The following provides a summary of how the new requirements will impact trustees who hold deposits in trust for a single beneficiary or multiple beneficiaries:
As trustees may update their information, or that of their beneficiaries, at any time to ensure the required information is kept up to date, CDIC encourages trustees to make these updates directly with their member institutions as soon as it changes. CDIC will use the latest information disclosed on the records of its member institutions to calculate deposit insurance protection for deposits held in trust.
Trustees who qualify as “Professional Trustees” may choose to benefit from less onerous disclosure requirements for certain deposit accounts they hold for beneficiaries provided they are capable of meeting certain informational and disclosure requirements.
Do the new rules change how the deposit I hold for my beneficiaries are protected?
No. Under the new rules, CDIC continues to insure eligible deposits held in trust up to $100,000 per beneficiary, as long as the above noted rules are met by the trustee.
When do these new rules take effect?
The new rules will take effect on April 30, 2022.
For information on CDIC’s current approach to deposits held in trust, visit Deposits held in trust.
Is there anything I should do now to ensure I am ready for April 30, 2022?
While there’s currently no action required if you’re a trustee, you may wish to consider the following questions in preparing for the new rules:
- Do you hold deposits in trust at a CDIC Member Institution?
- Do you have a record of all beneficiaries and their contact information?
- Do you have a record of each beneficiary’s interest (dollars or percentage) in the deposit you hold in trust?
- Have you provided information regarding your beneficiaries to your CDIC member institution?
- Do you qualify as a “Professional Trustee”?
How do I stay informed?
We encourage you to check back here regularly for updates about trust deposits. You can also subscribe to Industry News to receive notifications when new industry information is posted to this section.
CDIC is committed to fostering awareness and understanding of the new framework among the trustee community. We welcome your feedback, including any questions or comments. Please feel free to contact us at email@example.com. You can also follow us on social media for regular updates and information about deposit insurance. We’re here to help!