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Financial Community and Trustees

Notice:

As of April 30, 2022, CDIC protection is expanded to include Registered Education Savings Plans and Registered Disability Savings Plans. There are also new rules for deposits held in trust. These changes are part of the Government of Canada’s commitment to modernize and enhance CDIC deposit protection to reflect how Canadians bank and save.

For Trustees

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 took effect April 30, 2022 and introduced 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.

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:

Infographic – Trustee Decision Tree (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 questions will help guide you through these rules and what you need to do to meet them.

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:

  1. you (the trustee),
  2. who you are holding the funds for (your beneficiary or beneficiaries)
  3. 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. 

The amount of deposit insurance coverage calculated by CDIC will be reimbursed directly to the trustee who is noted as the depositor of record with the failed MI on behalf of their beneficiary(ies). The trustee is responsible for engaging with their beneficiaries on how to deal with the funds.

How do the new rules differ from the old ones?

The new rules that take effect on April 30, 2022, do 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 impact trustees who hold deposits in trust for a single beneficiary or multiple beneficiaries:

Single Beneficiary
  • Trustees continue to be required to disclose to their member institutions key information about the deposit being held in trust, information about the trustee(s) to the deposit (name & address), and information about the beneficiary of the deposit (name & address).
  • Trustees are instead able to update their information, or that of their beneficiaries, with their member institution at any time during the year to ensure the required information on the member institution’s records is kept up to date.
  • CDIC Member Institutions will reach out to trustees annually to remind them to update their information where it is no longer current.
Multiple Beneficiaries
  • Trustees continue to be required to disclose to their member institutions key information about the deposit being held in trust, information about the trustee(s) to the deposit (name & address), and information about each beneficiary of the deposit (names & addresses).
  • Trustees continue to be required to disclose to their member institutions the interest that each beneficiary holds in the deposit, expressed as an amount ($) or as a percentage (%).
  • Trustees holding a deposit with multiple beneficiaries continue to receive an annual notifications from their member institution requesting updates to information about the beneficiary of the deposit.
  • Trustees are able to update their information, or that of their beneficiaries, with their member institution at any time during the year to ensure the required information on the member institution’s records is kept up to date.

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 uses 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. 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.

What do I need to do to ensure that I, and my beneficiaries, are protected?

If you’re a trustee, you may wish to consider the following questions to ensure your eligible deposits are protected to applicable limits:

  • Do I hold deposits in trust at a CDIC Member Institution?
  • Have I provided the Member Institution where I hold trust deposits with my, and my beneficiaries’ information?
  • Is the beneficiary information on my records, and on the records of the Member Institution accurate and current?
  • Do I qualify as a Professional Trustee?

To learn more about what is required of trustees, and when, please consult the Trustee Timeline.

How do I stay informed?

We encourage you to check back here regularly for updates about trust deposits.

Still have questions?

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 info@cdic.ca. You can also follow us on social media for regular updates and information about deposit insurance. We’re here to help!

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