Vol. 139, No. 12 — March 19, 2005

By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law

Statutory authority

Canada Deposit Insurance Corporation Act

Sponsoring agency

Canada Deposit Insurance Corporation

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the By-law.)

Description

The Board of Directors of the Canada Deposit Insurance Corporation (CDIC) made the Canada Deposit Insurance Corporation Differential Premiums By-law (the "DPS By-law") on March 3, 1999, pursuant to subsection 21(2) and paragraph 11(2)(g) of the Canada Deposit Insurance Corporation Act (the "CDIC Act"). Subsection 21(2) of the CDIC Act authorizes the CDIC Board of Directors to make by-laws establishing a system of classifying member institutions into different categories, setting out the criteria or factors that CDIC will consider in classifying members into categories, establishing the procedures that CDIC will follow in classifying members, and fixing the amount of, or providing a manner of determining the amount of the annual premium applicable to each category. The CDIC Board of Directors amended the DPS By-law on January 12, 2000, December 6, 2000, July 26, 2001, March 7, 2002, March 3, 2004, and February 9, 2005.

In February 2005 the federal government announced in the budget that CDIC would repeal the Canada Deposit Insurance Corporation Standards of Sound Business and Financial Practices By-law (the "Standards"). Hence, CDIC is repealing its Standards. Consequential amendments must also be made to other CDIC by-laws referencing the Standards. In the DPS By-law, one of the criteria or factors taken into account in assessing ten of the one-hundred-mark scoring system is the extent of adherence to CDIC Standards. The criteria must be replaced.

The repeal of the Standards will result in the amendments contained in the By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law (the "Amending By-law"). The substantive amendments are to sections 1 and 29 and to Schedule 5 of the DPS By-law:

• Section 1 is amended by repealing the definition of "CDIC standards."
• Section 29 is amended by replacing it with a provision defining a member in good standing and assigning the member ten marks if it is in good standing on April 30 of the filing year or zero marks if it is not in good standing on April 30 of the filing year.
• Schedule 5 is repealed.

Alternatives

There are no available alternatives. The CDIC Act specifically provides that the criteria or factors to be taken into account in determining the category in which a member institution is classified and fixing or determining the amount of the annual premium applicable to each category may only be made by by-law.

Benefits and costs

The implementation of the Amending By-law will ensure that no reference to the Standards is contained in the DPS By-law after the repeal of the Standards. No costs, other than the potential impact on member institution classification and ultimately on the level of premiums paid as a result of the classification, should be attributed directly to these changes.

Consultation

Since the federal government announced in the 2004 budget that it would be looking to find opportunities to improve the efficiency and effectiveness of the delivery of federal financial services regulations, there has been consultation with a number of member institutions and associations regarding the broad policy direction which should be undertaken in respect thereof.

Member institutions were advised of the proposed amendment by letter dated March 10, 2005. This amendment forms part of the implementation of the repeal of the Standards announced in the February 2005 federal government budget document. Pre-publication is the final consultation on this amendment.

Compliance and enforcement

There are no compliance or enforcement issues.

Contact

Sandra Chisholm, Director, Standards and Insurance, Insurance and Risk Assessment, Canada Deposit Insurance Corporation, 50 O'Connor Street, 17th Floor, Ottawa, Ontario K1P 5W5, (613) 943-1976 (telephone), (613) 992-8219 (facsimile), schisholm@cdic.ca (electronic mail).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Board of Directors of the Canada Deposit Insurance Corporation, pursuant to paragraph 11(2)(g)(see footnote a) and subsection 21(2)(see footnote b) of the Canada Deposit Insurance Corporation Act, proposes to make the annexed By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law.

Interested persons may make representations concerning the proposed By-law within 15 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Sandra Chisholm, Director of Standards and Insurance, Canada Deposit Insurance Corporation, 50 O'Connor Street, 17th Floor, Ottawa, Ontario K1P 5W5.

Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act.

Ottawa, March 8, 2005

J. P. SABOURIN
President and Chief Executive Officer
Canada Deposit Insurance Corporation

BY-LAW AMENDING THE CANADA DEPOSIT INSURANCE CORPORATION DIFFERENTIAL PREMIUMS BY-LAW

AMENDMENTS

1. The definition "CDIC standards" in subsection 1(1) of the Canada Deposit Insurance Corporation Differential Premiums By-law(see footnote 1) is repealed.

2. The heading before section 29 and sections 29 and 29.1 of the By-law are replaced by the following:

Standing with the Corporation

29. (1) For the purposes of this section, a member institution that has no outstanding premiums payable to the Corporation on April 30 of the filing year is a member institution that is in good standing with the Corporation.

(2) The Corporation shall assign a score of

(a) 10 to each member institution that is in good standing with the Corporation; and

(b) 0 to each member institution that is not in good standing with the Corporation.

3. Schedule 5 to the By-law is repealed.

COMING INTO FORCE

4. This By-law comes into force on the day on which it is registered.

[12-1-o]

Footnote a

R.S., c. 18 (3rd Supp.), s. 51

Footnote b

S.C. 1996, c. 6, s. 27

Footnote 1

SOR/99-120

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with hypertext language (HTML). Its content is very similar except for the footnotes, the symbols and the tables.

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