Canada Gazette

The Board of Directors of the Canada Deposit Insurance Corporation ("CDIC") made the Canada Deposit Insurance Corporation Deposit Insurance Policy By-law (the "By-law") on October 27, 1993, pursuant to subsection 18(3) and paragraph 11(2)(g) of the Canada Deposit Insurance Corporation Act (the "CDIC Act"). Subsection 18(3) of the CDIC Act provides that a policy of deposit insurance shall be in such form and contain such provisions as may be prescribed by the by-laws and paragraph 11(2)(g) provides that the CDIC Board of Directors may make by-laws prescribing anything that by virtue of any provision of the CDIC Act is to be prescribed by the by-laws. The By-law prescribes the terms and conditions of the policy of deposit insurance of every CDIC member.

CDIC has undertaken an extensive review of the By-law in light of recent amendments to the CDIC Act included in the Financial Consumer Agency of Canada Act (the "FCAC Act") and amendments to the Bank Act and the Trust and Loan Companies Act and regulations thereunder. As a result of this review CDIC has identified a number of changes that will harmonize the policy of deposit insurance with the aforementioned legislative amendments. For example, the prohibition against the disclosure of prescribed information contained in section 10.1 of the By-law will be made permanent by the Amending By-law. This ensures consistency with the prohibition contained in the Supervisory Information Regulations enacted pursuant to the Bank Act and the Trust and Loan Companies Act, which came into force on January 31, 2001. In addition, CDIC has included changes of a more technical nature to clarify existing terms and conditions of the policy of deposit insurance.

There are no available alternatives. The CDIC Act specifically provides that the terms and conditions of the policy of deposit insurance are to be prescribed by by-law.

The implementation of the Amending By-law will update the By-law and harmonize the provisions of the policy of deposit insurance with recent statutory and regulatory amendments. In addition, the technical changes contained in the Amending By-law will clarify the existing terms and conditions of the policy of deposit insurance.

Jill Stewart, Director of Insurance, Compliance, (613) 943-1981 (Telephone), (613) 996-6095 (Facsimile), jstewart@cdic.ca (Electronic mail), or Canada Deposit Insurance Corporation, 50 O'Connor Street, 17th Floor, Ottawa, Ontario K1P 5W5.

Notice is hereby given that the Board of Directors of Canada Deposit Insurance Corporation pursuant to subsection 18(3) and paragraph 11(1)(g) of the Canada Deposit Insurance Corporation Act, proposes to make the annexed By-law Amending the Canada Deposit Insurance Corporation Deposit Insurance Policy By-law.

Any interested person may make representations concerning the proposed Regulation within 30 days after the date of publication of this notice. All such representations must be addressed to: Jill Stewart, Director of Insurance, Compliance, Canada Deposit Insurance Corporation, 50 O'Connor Street, 17th Floor, Ottawa, Ontario K1P 5W5, (613) 943-1981 (Telephone), (613) 996-6095 (Facsimile), jstewart@cdic.ca (Electronic mail), and cite the Canada Gazette, Part I, and the date of this notice.

BY-LAW AMENDING THE CANADA DEPOSIT INSURANCE CORPORATION DEPOSIT INSURANCE POLICY BY-LAW

1. Section 1 of the schedule to the Canada Deposit Insurance Corporation Deposit Insurance Policy By-law (see footnote 1) is replaced by the following:

1. This policy is prescribed by the Canada Deposit Insurance Corporation Deposit Insurance Policy By-law.

2. (1) The definitions "affiliate" and "influence" in subsection 2(1) of the schedule to the By-law are repealed.

(2) The definition "renseignements prévus par règlement administratif" (see footnote 2) in subsection 2(1) of the schedule to the French version of the By-law is repealed.

(3) The definitions "entity", "officer", "regulatory authority" and "Return of Insured Deposits" in subsection 2(1) of the schedule to the By-law are replaced by the following:

"entity" means a body corporate, a trust, a partnership, a fund, an unincorporated association or organization, Her Majesty in right of Canada or of a province, an agency of Her Majesty in either of such rights or the government of a foreign country or of any political subdivision of a foreign country or an agency of the government of a foreign country; (entité)

"officer" means, in respect of an entity, a chief executive officer, president, vice-president, secretary, controller, treasurer, chief financial officer or general manager or any other natural person who performs functions similar to those normally performed by an individual occupying one of those offices; (dirigeant)

"regulatory authority" means a supervisory or regulatory authority of financial institutions, capital markets, securities transactions or commodity futures that has jurisdiction over the member institution; (organisme de réglementation)

"Return of Insured Deposits" means the return of insured deposits in the form required by the Corporation; (Déclaration des dépôts assurés)

(4) The definition "prescribed information" (see footnote 3) in subsection 2(1) of the schedule to the English version of the By-law is replaced by the following:

(a) the category in which the member institution is classified under the Canada Deposit Insurance Corporation Differential Premiums By-law,

(d) any score assigned to the member institution in respect of quantitative factors or qualitative factors or criteria under that By-law,

(e) any rating assigned by the examiner to the member institution to assess its financial condition,

(f) any assessment by the examiner of the member institution's compliance with the standards of sound business and financial practices established by the by-laws,

(g) any stage of intervention assigned to the member institution as a result of its assessment in accordance with the Guide to Intervention for Federal Financial Institutions, and

(h) any other information that is given to the member institution with respect to qualitative factors or criteria by the Corporation or by the regulator or examiner and that would, alone or when combined with other information, permit the determination of the score assigned to the member institution in respect of any of those qualitative factors or criteria under the By-law referred to in paragraph (a); (renseignements prévus par la police)

(5) Paragraph (a) of the definition "business plan" in subsection 2(1) of the schedule to the English version of the By-law is replaced by the following:

(a) the member institution's business objectives and a description of the short-term and long-term strategies for achieving those objectives,

(6) Subsection 2(1) of the schedule to the By-law is amended by adding the following in alphabetical order:

"examiner" has the same meaning as in subsection 1(1) of the Canada Deposit Insurance Corporation Differential Premiums By-law; (inspecteur)

(7) Subsection 2(1) of the schedule to the French version of the By-law is amended by adding the following in alphabetical order:

a) La catégorie dans laquelle l'institution membre est classée aux termes du Règlement administratif de la Société d'assurance-dépôts du Canada sur les primes différentielles;

b) le taux de prime imposé à l'institution membre aux termes de ce règlement administratif;

c) la note totale attribuée à l'institution membre aux termes de ce règlement administratif;

d) la note attribuée à l'institution membre pour l'un ou l'autre des facteurs quantitatifs ou des facteurs ou critères qualitatifs aux termes de ce règlement administratif;

e) toute cote attribuée par l'inspecteur à l'institution financière pour évaluer sa situation financière;

f) toute évaluation faite par l'inspecteur de la mesure dans laquelle l'institution financière respecte les normes visant des pratiques commerciales et financières saines établies par les règlements administratifs;

g) l'étape d'intervention attribuée à l'institution membre à la suite de son évaluation selon le Guide en matière d'intervention à l'intention des institutions financières fédérales;

h) tout autre renseignement relatif aux facteurs ou critères qualitatifs qui est transmis à l'institution membre par la Société ou par l'organisme de réglementation ou l'inspecteur et qui permettrait, seul ou en combinaison avec d'autres renseignements, de déterminer la note attribuée à l'institution membre pour l'un ou l'autre de ces facteurs ou critères aux termes du règlement administratif visé à l'alinéa a). (prescribed information)

3. The heading before section 4 and sections 4 to 6 of the schedule to the By-law are replaced by the following:

5. (1) In accordance with subsection 18(4) of the Act, when the Canada Deposit Insurance Corporation Deposit Insurance Policy By-law is amended or replaced, this policy is deemed to be amended or replaced accordingly.

(2) In accordance with subsection 18(4) of the Act, the Corporation may issue a new policy of deposit insurance in the circumstances described in subsection (1).

6. This policy shall continue in effect until it is terminated or the deposit insurance of the member institution is cancelled.

8. The member institution shall comply with the Act, any other applicable Act, any applicable by-law, including the applicable standards of sound business and financial practices established by such a by-law, the incorporating instrument of the member institution, any undertaking that it has given to the Corporation and any agreement it has made with the Corporation.

5. Subsection 9(1) of the schedule to the By-law is replaced by the following:

9. (1) The member institution shall, if required to do so under the Canada Deposit Insurance Corporation Differential Premiums By-law, submit to the Corporation the declaration referred to in section 7 of that By-law and the Reporting Form and the documents referred to in subsection 15(1) of that By-law, completed in accordance with section 15 of that By-law, within the time required by that By-law.

(1.1) Subject to subsection (2), the member institution shall, in accordance with section 21 of the Act, pay to the Corporation an annual premium calculated in accordance with that section and payable at the times specified in subsection 22(2) of the Act.

10. (1) The member institution shall complete and certify a Return of Insured Deposits and submit that Return to the Corporation on July 15 of each year or at any other time that the Corporation may require.

(2) For the purpose of making the calculations referred to in subsections 21(1) and 23(1) of the Act, the member institution shall determine the aggregate amount of insured deposits by using the method set out in the Return of Insured Deposits.

7. Subsection 10.1(1) (see footnote 4) of the schedule to the By-law is replaced by the following:

10.1 (1) Subject to subsection (2), the member institution shall not, directly or indirectly, disclose prescribed information.

8. Paragraph 14(2)(a) of the schedule to the By-law is replaced by the following:

15. (1) The member institution shall provide to the Corporation, not later than 120 days after the end of each financial year of the member institution,

(i) prepared on a consolidated basis and contain comparative information in respect of the immediately preceding financial year,

(ii) approved by the board of directors of the member institution, and

(iii) audited;

(b) a current list of the subsidiaries and affiliates of the member institution; and

(2) The member institution shall, if requested by the Corporation, provide to the Corporation a current list of the names, addresses, telephone numbers and titles or offices of the directors and officers of each of its affiliates not later than 30 days after the day on which the request is received.

10. (1) The portion of section 16 of the schedule to the By-law before paragraph (a) is replaced by the following:

16. Where requested by the Corporation for the purpose of monitoring or assessing the compliance of the member institution with the Act, the by-laws or this policy or where the Corporation considers it to be necessary or desirable in furtherance of its objects, the member institution shall provide to the Corporation

(2) The portion of paragraph 16(b) of the schedule to the By-law before subparagraph (i) is replaced by the following:

(b) without delay, a statement certified by an officer of the member institution, that sets out

(3) Subparagraph 16(b)(iii) of the schedule to the By-law is replaced by the following:

(iii) the number, amounts and sources of all deposits that are, in whole or in part, to the knowledge of the member institution, received or held as the result of the services of a person who carries on business as an agent or broker in the solicitation or placement of deposits on behalf of one or more member institutions or actual or prospective depositors,

11. (1) The portion of subsection 17(1) of the schedule to the English version of the By-law before paragraph (a) is replaced by the following:

17. (1) The member institution shall, without delay, provide to the Corporation a copy of

(2) Subsection 17(2) of the schedule to the By-law is replaced by the following:

(2) The member institution shall, without delay, notify the Corporation in writing of

(i) the member institution or any of its subsidiaries, and

(ii) any of the other affiliates of the member institution, if that change affects or could affect the operations or financial condition of the member institution or any other body corporate of which the member institution is a subsidiary;

(b) any actual or proposed amalgamation, merger, arrangement or other reorganization that involves

(i) the member institution or a significant portion of its assets or liabilities, or any of its subsidiaries, and

(ii) any of the other affiliates of the member institution, if that amalgamation, merger, arrangement or other reorganization affects or could affect the operations or financial condition of the member institution or any other body corporate of which the member institution is a subsidiary;

(i) the member institution or any of its subsidiaries, and

(ii) any of the other affiliates of the member institution, if that transfer affects or could affect the operations or financial condition of the member institution or any other body corporate of which the member institution is a subsidiary;

(d) the commencement of proceedings under the Winding-up and Restructuring Act or the Bankruptcy and Insolvency Act or the filing of an assignment in respect of

(i) the member institution or any of its subsidiaries, and

(ii) any of the other affiliates of the member institution, if those proceedings or that filing affects or could affect the operations or financial condition of the member institution or any other body corporate of which the member institution is a subsidiary;

(e) any actual or proposed acquisition that constitutes a substantial investment, within the meaning of section 10 of the Bank Act, in a bank, trust or loan company, cooperative credit society or credit union, an insurance company, an investment dealer, a mutual fund investment manager or any other provider of financial services, by

(i) the member institution or any of its subsidiaries, and

(ii) any of the other affiliates of the member institution, if that acquisition affects or could affect the operations or financial condition of the member institution or any other body corporate of which the member institution is a subsidiary; and

12. Sections 18 to 20 of the schedule to the By-law are replaced by the following:

18. The member institution shall, without delay, notify the Corporation in writing of any material change to any information provided pursuant to sections 15 to 17.

19. The member institution authorizes the Corporation to have access to any information in the possession of a regulatory authority, the Bank of Canada or the Department of Finance that pertains to the member institution.

20. The member institution consents to the release to any regulatory authority, the Bank of Canada or the Department of Finance of any information provided by the member institution to the Corporation.

22. (1) The member institution shall, without delay, notify the Corporation in writing if the member institution, or any of its shareholders who together hold at least five per cent of the outstanding voting shares of the member institution, proposes that its auditor be removed from office or proposes not to re-appoint the auditor and, to the extent that the member institution is aware of them, shall indicate the reasons for the proposal.

(2) The member institution shall, without delay, notify the Corporation in writing if the member institution receives notice from its auditor of the auditor's resignation or decision not to stand for re-appointment and, to the extent that the member institution is aware of them, shall indicate the reasons for that resignation or decision.

(3) The member institution is not required to notify the Corporation of any change in its auditor where that change is required by statute.

14. (1) The portion of subsection 23(1) of the schedule to the By-law before paragraph (a) is replaced by the following:

23. (1) The member institution shall notify the Corporation of the termination, cancellation or lapse of any of the following bonds or insurance policies that relate to the business of the member institution:

(2) Subsection 23(2) of the schedule to the By-law is replaced by the following:

(2) The member institution shall use its best efforts to cause each issuer of any bond or insurance policy referred to in subsection (1) to undertake to the Corporation and the member institution that the coverage under that bond or insurance policy will in no circumstances lapse or terminate, or be terminated or cancelled, by its own terms or by the issuer, except after 30 days written notice to the Corporation, and that the right to file claims under that bond or policy will continue to exist until at least 150 days following that notice.

15. Subsections 24(1) and (2) of the schedule to the By-law are replaced by the following:

24. (1) The member institution shall prepare and maintain records that accurately and fully describe and disclose its assets, whether on or off-balance sheet, deposit liabilities consisting of insured and uninsured deposits, other actual or contingent liabilities, whether on or off-balance sheet, revenue, expenses and shareholders' equity.

(2) The member institution shall retain the records of deposit liabilities referred to in subsection (1) for a period of at least six years after their creation and during that period shall not remove them from Canada except with the prior written consent of the Corporation.

16. Paragraph 25(1)(a) of the schedule to the French version of the By-law is replaced by the following:

27. The member institution shall pay to the Corporation the costs of any examination or inspection that are charged to it by the Corporation in accordance with section 28.1 of the Act.

18. Paragraph 28(2)(c) of the schedule to the By-law is replaced by the following:

(c) on the day of transmission if sent by electronic means on a business day and within the business hours of the recipient, and on the first business day after the day of transmission if sent by electronic means at any other time.

29. A provincial member institution shall not, in carrying on its business, exercise powers that are substantially different from the powers exercisable by a company to which the Trust and Loan Companies Act applies.

20. Paragraph 30(a) of the schedule to the By-law is replaced by the following:

21. Sections 31 and 32 of the schedule to the By-law are replaced by the following:

31. A provincial member institution may terminate its policy of deposit insurance by giving six months written notice to the Corporation.

32. The Corporation may cancel the deposit insurance of the member institution pursuant to subsection 26.04(3) or section 33 of the Act.

33. Notwithstanding section 6, where the policy of the member institution is terminated or the deposit insurance of the member institution is cancelled, the former member institution shall continue to be bound by the provisions of this policy until there are no deposits held by it that are insured by the Corporation.

23. The schedule to the English version of the By-law is amended by replacing the expression "a member institution" with the expression "the member institution", with any modifications that the circumstances require, in the following provisions:

24. The schedule to the French version of the By-law is amended by replacing the expression "renseignements prévus par règlement administratif" with the expression "renseignements prévus par la police" in the following provisions:

25. The schedule to the English version of the By-law is amended by replacing the word "forthwith" with the words "without delay" in the following provisions:

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

The Board of Directors of the Canada Deposit Insurance Corporation ("CDIC") made the Canada Deposit Insurance Corporation Differential Premiums By-law (the "By-law") on March 3, 1999, pursuant to subsection 21(2) and paragraph 11(2)(g) of the Canada Deposit Insurance Corporation Act (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 CDIC will consider in classifying members into categories, establishing the procedures 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 subsequently amended the By-law on January 12, 2000, December 6, 2000, and July 26, 2001.

The substantive amendments contained in the By-law Amending the Canada Deposit Insurance Corporation Differential Premiums By-law ("the Amending By-law") are to sections 7 and 27 and to Schedule 2, Part 2, Reporting Form. Sections 1, 4, 6, 8, 10 and 12 of the By-law require amendment due to the changes to section 7. Section 13 of the By-law is being repealed since it was a transitory provision which is no longer needed.

CDIC annually reviews this By-law to ensure that it remains up-to-date. The changes are being proposed for a variety of reasons but, other than those that are purely technical or for clarification, they are being made in response to suggestions by member institutions. They are all generally technical in nature. The changes are summarized in the following table:

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.

The implementation of the amending By-law will support new member institutions, will clarify certain elements and will ensure that the By-law is up-to-date. No costs, other than the potential impact on member institution classification and ultimately on its level of premiums paid as a result of the classification, should be attributed directly to these changes.

CDIC consulted with its member institutions in respect of the Amending By-law in the latter half of October 2001 and requested comments related to suggested amendments prior to the end of November 2001. Comments received have been taken into account and, in particular, the amendment referred to as goodwill/ intangibles reflects comments received. Generally, no issue was taken with the changes proposed. Some additional suggestions have been made for change, other than the inclusion of intangibles noted above, and they will be taken into consideration in the drafting of future amendments.

Sandra Chisholm, Director of Standards and Insurance, (613) 943-1976 (Telephone), (613) 992-8219 (Facsimile), schisholm@ cdic.ca (Electronic mail); or Canada Deposit Insurance Corporation, 50 O'Connor Street, 17th Floor, Ottawa, Ontario K1P 5W5.

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

Any interested person may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to: Sandra Chisholm, Director of Standards and Insurance, Canada Deposit Insurance Corporation, 50 O'Connor Street, 17th Floor, Ottawa, Ontario K1P 5W5, (613) 943-1976 (Telephone), (613) 996-6095 (Facsimile), schisholm@cdic.ca (Electronic mail), and cite the Canada Gazette, Part I, and the date of this notice.

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

1. The definition "new member institution" in subsection 1(1) of the Canada Deposit Insurance Corporation Differential Premiums By-law (see footnote 5) is repealed.

2. (1) The description of E (see footnote 6) in subsection 4(2) of the By-law is replaced by the following:

E is the number of days during the period beginning on May 1 of the filing year and ending on the day that the Corporation receives the declaration referred to in paragraph 7(1)(b) or the documents required by subsection 15(1) or section 16 from the member institution;

(2) The description of G (see footnote 7) in subsection 4(2) of the By-law is replaced by the following:

G is the number of days during the period beginning on the day after the day that the Corporation receives the declaration referred to in paragraph 7(1)(b) or the documents required by subsection 15(1) or section 16 from the member institution and ending on April 30 of the year following the filing year referred to in E.

(b) if the institution is an institution described in paragraph 12(1)(b), the declaration referred to in paragraph 7(1)(b) or the documents required by paragraphs 15(1)(a) to (e) or section 16.

7. (1) A member institution shall be classified in premium category 1 as set out in column 1 of Schedule 1, if

(a) the member institution has been operating as a member institution for less than two fiscal years consisting of at least 12 months each, determined as of the end of the fiscal year ending in the year preceding the filing year; and

(b) not later than April 30 of the filing year, the member institution provides the Corporation with a declaration confirming that the member institution meets the condition referred to in paragraph (a).

(a) is a subsidiary of a member institution that has been operating for at least two fiscal years consisting of at least 12 months each, determined as of the end of the fiscal year ending in the year preceding the filing year; or

(b) has a subsidiary that is a member institution that has been operating for at least two fiscal years consisting of at least 12 months each, determined as of the end of the subsidiary's fiscal year ending in the year preceding the filing year.

(3) For the purpose of this section, if a member institution is formed by an amalgamation involving one or more member institutions, the amalgamated member institution shall be considered to have started operating on the same day as the amalgamating member institution that has been operating for the longest period of time.

8. A member institution, other than one classified in accordance with section 7, shall be classified in the premium category set out in column 1 of an item of Schedule 1 that corresponds to the total score for the institution determined in accordance with section 9, 10 or 11, as the case may be, and set out in column 2 of that item.

5. The portion of section 10 of the By-law before paragraph (a) is replaced by the following:

10. Subject to subsections 11(4) and 12(2), if a member institution that started operating as a member institution after April 30 of the year preceding the filing year would be classified in premium category 1 in accordance with section 7 if it did not have any subsidiaries of the type described in paragraph 7(2)(b), the Corporation shall assign to that institution the highest of the total scores assigned to each of its subsidiaries that

(b) has not, by April 30 of the filing year, submitted the declaration referred to in paragraph 7(1)(b) or the documents required by paragraphs 15(1)(a) to (e) or section 16.

27. (1) If a member institution has been operating as a member institution for less than five fiscal years consisting of at least 12 months each, the combined score in respect of the factors in items 3 and 4 of the Reporting Form shall be determined in accordance with the formula

A is the sum of the scores assigned to the member institution under sections 21, 22 and 24 to 26.

(2) If a member institution formed by an amalgamation involving two or more member institutions has been operating as a member institution for less than five fiscal years consisting of at least 12 months each, the combined score in respect of the factors in items 3 and 4 of the Reporting Form shall be determined in accordance with subsection (1).

9. (1) The two paragraphs under the heading "1.3.3 Required Total Risk-Based Capital Ratio" in item 1 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law are replaced by the following:

Indicate the total risk-based capital ratio, or other similar ratio using risk-weighted assets, that is required by the member institution's regulator for that institution.

If the regulator does not assign a required ratio, indicate "N/A" ("not applicable").

(2) The third column under the heading "Range of Results" before element 1.4 in item 1 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law is replaced by the following:

10. (1) The three paragraphs (see footnote 8) under the heading "3. MEAN ADJUSTED NET INCOME VOLATILITY" in item 3 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law are replaced by the following:

If a member institution has been operating as a member institution for less than five fiscal years consisting of at least 12 months each (with the fifth fiscal year ending in the year preceding the filing year), it must indicate "N/A" ("not applicable") for elements 3, 3.1, 3.2 and 3.8 and fill in any of elements 3.3 to 3.7 that apply to it.

If a member institution formed by an amalgamation involving only one member institution has been operating as a member institution for less than five fiscal years consisting of at least 12 months each (with the fifth fiscal year ending in the year preceding the filing year), in addition to filling in the applicable elements as an amalgamated member institution, it must also fill in the applicable elements for the amalgamating member institution.

If a member institution formed by an amalgamation involving two or more member institutions has been operating as a member institution for less than five fiscal years consisting of at least 12 months each (with the fifth fiscal year ending in the year preceding the filing year), it must indicate "N/A" ("not applicable") for elements 3, 3.1, 3.2 and 3.8 and fill in any of elements 3.3 to 3.7 that apply to it.

(2) The three paragraphs before the heading "3.2 Mean Net Income or Loss" in item 3 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law are replaced by the following:

If a member institution has been operating as a member institution for seven or more fiscal years consisting of at least 12 months each, "n" will be equal to 5.

If a member institution has been operating as a member institution for six fiscal years consisting of at least 12 months each, "+ (3.7 - 3.2) (see footnote 9) " must be removed from the formula and "n" will be equal to 4.

If a member institution has been operating as a member institution for five fiscal years consisting of at least 12 months each, "+ (3.6 - 3.2) (see footnote 10) + (3.7 - 3.2) (see footnote 11) " must be removed from the formula and "n" will be equal to 3.

(3) The three paragraphs before the heading "Net income or loss (the latter to be reported as a negative number) after tax for each of the last five fiscal years." in item 3 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law are replaced by the following:

If a member institution has been operating as a member institution for seven or more fiscal years consisting of at least 12 months each, "n" will be equal to 5.

If a member institution has been operating as a member institution for six fiscal years consisting of at least 12 months each, "+ 3.7" must be removed from the formula and "n" will be equal to 4.

If a member institution has been operating as a member institution for five fiscal years consisting of at least 12 months each, "+ 3.6 + 3.7" must be removed from the formula and "n" will be equal to 3.

11. The paragraph (see footnote 12) under the heading "5.1 Total Non-Interest Expenses" in item 5 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law is replaced by the following:

Indicate the total non-interest expenses, as set out for item 27 of the Consolidated Statement of Income, less any amortization expense for goodwill noted under item 26(l)(i) of that Statement and any goodwill or intangible impairment expense included under item 26(m). No amortization expenses for intangibles included under item 26(l)(ii) are to be excluded from the total non-interest expenses.

12. The definition "Exposures" in item 7 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law is amended by adding the following:

Specific or individual allowances are to be deducted from the amounts for loans, acceptances and securities.

13. The definition "Exposures" in item 9 of the Reporting Form set out in Part 2 of Schedule 2 to the By-law is amended by adding the following:

Group or general allowances assigned to specific industry sectors and specific or individual allowances are to be deducted from the amounts for loans, acceptances and securities.