Deposit-Type Instruments Regulations

Deposit-Type Instruments Regulations 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. 271 S.C. 2007, c. 6, s. 37 S.C. 2009, c. 2, s. 274 S.C. 2007, c. 6, s. 93 S.C. 1991, c. 46 S.C. 2009, c. 2, s. 278 S.C. 2007, c. 6, s. 170 S.C. 1991, c. 48 S.C. 2009, c. 2, s. 291 S.C. 2007, c. 6, s. 368 S.C. 1991, c. 45 Definitions The following definitions apply in these Regulations. business day means a day other than Saturday or a holiday. (jour ouvrable) deposit-type instrument has the same meaning as in subsection 627.01(1) of the Bank Act. (instrument de type dépôt) institution means [Repealed, SOR/2021-181, s. 110] a retail association, as defined in section 2 of the Cooperative Credit Associations Act; or a company, as defined in section 2 of the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) interest rate benchmark has the same meaning as in subsection 627.01(1) of the Bank Act. (taux d’intérêt de référence) Clear and simple language Any 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. Information to be disclosed At 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 interest rate benchmark, as the case may be, that is used for the calculation of the rate of interest, the prime lending rate or the interest rate benchmark in effect when the information is disclosed, and how 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 and whether its rate of interest is fixed or variable, and the rate or method for determining the rate, its investment period, and any charges related to its issuance or the cancellation of its issuance; and if 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 telephone In 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 mail In 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 agreement If 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. Calculation of time — disclosure by mail An 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. Information — amendments Before 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 value An 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 maturity An 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. Required content — all advertisements In 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 payable In 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 disclose the manner in which interest is to be accrued and any limitations in respect of the interest payable; and if 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. Exception Paragraph (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. An 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. [Amendment] November 1, 2011 These Regulations come into force on November 1, 2011.