Vol. 132, No. 47 — November 21, 1998

Regulations Amending the Assessment of Financial Institutions Regulations

Statutory Authority

Office of the Superintendent of Financial Institutions Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The Office of the Superintendent of Financial Institutions (OSFI) proposes to amend the Assessment of Financial Institutions Regulations to increase, over a two-year period, the minimum annual assessments applicable to certain federally regulated financial institutions (FRFIs). The proposed amendments are made pursuant to section 23 of the Office of the Superintendent of Financial Institutions Act.

Both the Insurance Council of Canada (ICC) and the Canadian Life and Health Insurance Association (CLHIA) recommended that the OSFI review the continued appropriateness of the current $1,000 minimum assessments for their members. The associations suggested that the review should be done in conjunction with OSFI's user pay project. They supported the view that minimum assessments should be cost-based and reflect the actual average costs incurred by OSFI in performing basic supervision for its smaller members.

Given the associations' comments, OSFI conducted an analysis of the time spent in fulfilling its basic regulatory/supervisory activities in regard to small life and property and casualty insurance companies. Examples of "basic supervision" for insurance companies are statutory examinations, quarterly financial analysis and annual actuarial reviews carried out by OSFI staff. OSFI also expanded the analysis to include time spent on activities related to cooperative credit associations (COOPs). The analysis confirmed that the current minimum assessments were too low and should be raised to $10,000.

In order to allow the smaller institutions to adjust to the planned increase, OSFI has proposed that the increase be phased in over a two-year period. As a result, OSFI has proposed that the minimum assessment for COOPs, life insurance companies and property and casualty insurance companies increase to $5,000 in fiscal year 1998-1999 and to $10,000 in fiscal 1999-2000. For the fiscal 1996-1997 assessment year, 130 of the 221 property and casualty insurance companies paid less than the proposed $10,000 minimum assessment, with 72 of those paying only the current minimum assessment of $1,000. On the life insurance companies side, 65 of the 123 companies would be affected by the proposed increase. Currently, only 39 life insurance companies pay the $1,000 minimum assessment. Only one of the seven COOPs, which currently pays an assessment of approximately $7,000, would be affected by the proposed increase to $10,000.

OSFI is also proposing that the minimum assessment for fraternal benefit societies be increased from the current $100 to $500 in fiscal year 1998-1999 and to $1,000 for fiscal year 1999-2000. Fifteen of the fraternal benefit societies pay the minimum $100 assessment and 22 of the 27 fraternals benefit societies would be affected by an increase to $1,000.

OSFI may revisit the issue of minimum assessment increases for run-off insurance companies and property and casualty insurance companies during Phase II. The proposed minimum assessment increases would have a greater relative impact for run-off companies as they do not issue any new policies and generally do not collect any premiums. They remain subject to OSFI supervision because of continuing Canadian liabilities.

Alternatives

 

I. Status quo, i.e. no change to the existing regulations to increase the minimum assessments.

II. Increase the minimum assessments to more accurately reflect OSFI's actual costs of providing basic regulatory/supervisory activities to COOPs, small life insurance companies and property and casualty insurance companies and to fraternal benefit societies.

Analysis

Implementation of Alternative II has the support of the insurance industry associations as it addresses their concerns that the current minimum assessments are too low and should be increased to reflect OSFI's actual annual costs for providing basic regulatory/supervisory activities for small insurance companies.

The proposed minimum assessment increases has been supported by in-house analysis.

OSFI's proposed phased-in approach, over a two-year period, is seen as reasonable given that it will provide affected financial institutions with time to adjust to the increased minimum assessments.

Costs

Implementation of Alternative II would generate no additional costs to OSFI. Apart from the increase in minimum assessments, there are no additional costs to be incurred by COOPs, insurance companies and fraternal benefit societies.

Consultation

Detailed information concerning the proposed increase in minimum assessments was included in OSFI's March 1998 consultation paper. The comments received from the industry stakeholders regarding OSFI's March 1998 consultation paper have generally been supportive of OSFI's phased-in approach for increasing the minimum assessments for insurance companies, COOPs and fraternal benefit societies.

Compliance and Enforcement

These amendments will not require any changes to OSFI procedures. There are no additional personnel resources required. Assessments levied against regulated financial institutions constitute debts due to Her Majesty and may be recovered in any court of competent jurisdiction.

Contact

Mr. Jack Heyes, Chairman, User Pay Task Force, Office of the Superintendent of Financial Institutions, 121 King Street W, P.O. Box 39, Toronto, Ontario M5H 3T9, (416) 973-8529 (Telephone), (416) 973-8966 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to paragraph 23(3) of the Office of the Superintendent of Financial Institutions Act (see footnote a), proposes to make the annexed Regulations Amending the Assessment of Financial Institutions Regulations.

Any interested persons may make representations concerning the proposed Regulations within 15 days after the date of publication of this notice. All such representations must be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

November 19, 1998

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE ASSESSMENT OF FINANCIAL INSTITUTIONS REGULATIONS

AMENDMENTS

1. (1) The portion of subparagraph 4(b)(i) of the Assessment of Financial Institutions Regulations (see footnote 1) before the formula is replaced by the following:

(2) The descriptions of "D" and "E" in clause 4(b)(i)(B) of the Regulations are replaced by the following:

D is the product obtained by multiplying $5,000 by the number of cooperative credit societies assessed under subsection 23(3) of the Act in respect of that fiscal year that are not cooperative credit societies referred to in paragraph (a), and

E is the aggregate of the average total assets for each cooperative credit society that is not a cooperative credit society referred to in paragraph (a), ascertained under paragraph 23(1)(c) of the Act, in respect of which the product obtained by multiplying A by B, divided by C, is greater than $5,000,

(3) The portion of subparagraph 4(b)(i) of the Regulations before the formula, as enacted by subsection (1), is replaced by the following:

 

(4) The descriptions of "D" and "E" in clause 4(b)(i)(B) of the Regulations, as enacted by subsection (2), are replaced by the following:

D is the product obtained by multiplying $10,000 by the number of cooperative credit societies assessed under subsection 23(3) of the Act in respect of that fiscal year that are not cooperative credit societies referred to in paragraph (a), and

E is the aggregate of the average total assets for each cooperative credit society that is not a cooperative credit society referred to in paragraph (a), ascertained under paragraph 23(1)(c) of the Act, in respect of which the product obtained by multiplying A by B, divided by C, is greater than $10,000,

2. (1) The portion of paragraph 5(b) (see footnote 2) of the Regulations before the description of "A" is replaced by the following:

(b) in respect of any other financial institution, the total of

 

 

B × A C

(B-D) × A E

B × A C

(B-D) × A E

(2) The descriptions of "D" and "E" in subparagraph 5(b)(ii) (see footnote 3) of the Regulations are replaced by the following:

D is the aggregate of the product obtained by multiplying $500 by the number of societies and foreign fraternal benefit societies assessed under subsection 23(3) of the Act in respect of that fiscal year, other than financial institutions referred to in paragraph (a), and the product obtained by multiplying $5,000 by the number of life companies and foreign life companies that are not foreign fraternal benefit societies assessed under subsection 23(3) of the Act in respect of that fiscal year, other than financial institutions referred to in paragraph (a), and

E is the aggregate of the total amount of net premiums received in Canada by societies and foreign fraternal benefit societies that are referred to in paragraph 23(1)(d) of the Act, other than financial institutions referred to in paragraph (a), in respect of which the amount determined by the formula

B × A C

is greater than $500, and the total amount of net premiums received in Canada by life companies and foreign life companies that are not foreign fraternal benefit societies referred to in paragraph 23(1)(d) of the Act, other than financial institutions referred to in paragraph (a), and in respect of which the amount determined by the formula

B × A C

is greater than $5,000,

(3) The portion of paragraph 5(b) of the Regulations before the description of "A", as enacted by subsection (1), is replaced by the following:

(b) in respect of any other financial institution, the total of

 

B × A
C

(B-D) × A
E

 

B × A
C

(B-D) × A
E

(4) The descriptions of "D" and "E" in subparagraph 5(b)(ii) of the Regulations, as enacted by subsection (2), are replaced by the following:

D is the aggregate of the product obtained by multiplying $1,000 by the number of societies and foreign fraternal benefit societies assessed under subsection 23(3) of the Act in respect of that fiscal year, other than financial institutions referred to in paragraph (a), and the product obtained by multiplying $10,000 by the number of life companies and foreign life companies that are not foreign fraternal benefit societies assessed under subsection 23(3) of the Act in respect of that fiscal year, other than financial institutions referred to in paragraph (a), and

E is the aggregate of the total amount of net premiums received in Canada by societies and foreign fraternal benefit societies that are referred to in paragraph 23(1)(d) of the Act, other than financial institutions referred to in paragraph (a), in respect of which the amount determined by the formula

B × A
C

is greater than $1,000, and the total amount of net premiums received in Canada by life companies and foreign life companies that are not foreign fraternal benefit societies referred to in paragraph 23(1)(d) of the Act, other than financial institutions referred to in paragraph (a), and in respect of which the amount determined by the formula

B × A
C

is greater than $10,000,

3. (1) The portion of paragraph 6(b) (see footnote 4) of the Regulations before the description of "A" is replaced by the following:

(b) in respect of any other financial institution, the aggregate of

B × A
C

(B-D) × A
E

(2) The descriptions of "D" and "E" in subparagraph 6(b)(ii) (see footnote 5) of the Regulations are replaced by the following:

D is the product obtained by multiplying $5,000 by the number of financial institutions referred to in paragraphs 23(1)(c.1) and (d) of the Act that are not life companies, foreign fraternal benefit societies, societies or foreign life companies, other than financial institutions referred to in paragraph (a), and that are assessed under subsection 23(3) of the Act in respect of that fiscal year, and

E is the aggregate of the total amount of net revenue received by the financial institution referred to in paragraph 23(1)(c.1) of the Act, as ascertained under that paragraph, and the total amount of net premiums, as ascertained under paragraph 23(1)(d) of the Act, received in Canada by all financial institutions referred to in paragraph 23(1)(d) of the Act that are not life companies, foreign fraternal benefit societies, societies or foreign life companies, other than financial institutions referred to in paragraph (a), and in respect of which the amount determined by the formula

B × A
C

(3) The portion of paragraph 6(b) of the Regulations before the description of "A", as enacted by subsection (1), is replaced by the following:

(b) in respect of any other financial institution, the aggregate of

B × A
C

(B-D) × A
E

(4) The descriptions of "D" and "E" in subparagraph 6(b)(ii) of the Regulations, as enacted by subsection (2), are replaced by the following:

D is the product obtained by multiplying $10,000 by the number of financial institutions referred to in paragraphs 23(1)(c.1) and (d) of the Act that are not life companies, foreign fraternal benefit societies, societies or foreign life companies, other than financial institutions referred to in paragraph (a), and that are assessed under subsection 23(3) of the Act in respect of that fiscal year, and

E is the aggregate of the total amount of net revenue received by the financial institution referred to in paragraph 23(1)(c.1) of the Act, as ascertained under that paragraph, and the total amount of net premiums, as ascertained under paragraph 23(1)(d) of the Act, received in Canada by all financial institutions referred to in paragraph 23(1)(d) of the Act that are not life companies, foreign fraternal benefit societies, societies or foreign life companies, other than financial institutions referred to in paragraph (a), and in respect of which the amount determined by the formula

B × A
C

is greater than $10,000,

4. The Regulations are amended by adding the following after section 6:

REDUCTION OF ASSESSMENTS

6.1 Any amount paid to or recovered by the Superintendent pursuant to section 23.1 of the Act or pursuant to any agreement providing for the payment of a fee for a service provided by or on behalf of the Superintendent shall be applied to reduce the amount of expenses referred to in

(a) the description of "B" in subparagraph 3(b)(ii), where the service was provided for or in connection with the administration of the Bank Act or the Trust and Loan Companies Act;

(b) the description of "B" in clause 4(b)(i)(B), where the service was provided for or in connection with the administration of the Cooperative Credit Associations Act;

(c) the description of "B" in subparagraph 5(b)(ii), where the service was provided for or in connection with the administration of the Insurance Companies Act in respect of financial institutions that are life companies, foreign fraternal benefit societies, societies or foreign life companies; or

(d) the description of "B" in subparagraph 6(b)(ii), where the service was provided for or in connection with the administration of the Green Shield Canada Act or the Insurance Companies Act in respect of financial institutions that are not life companies, foreign fraternal benefit societies, societies or foreign life companies.

COMING INTO FORCE

5. (1) Subsections 1(1) and (2), 2(1) and (2) and 3(1) and (2) come into force on January 1, 1999 and apply in respect of the fiscal year beginning on April 1, 1998.

(2) Subsections 1(3) and (4), 2(3) and (4) and 3(3) and (4) come into force on April 1, 1999 and apply in respect of fiscal years beginning on or after April 1, 1999.

(3) Section 4 comes into force on January 1, 1999.

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Regulations Amending the Related Party Transactions (Trust and Loan Companies) Regulations

Statutory Authority

Trust and Loan Companies Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The Regulations Amending the Related Party Transactions (Trust and Loan Companies) Regulations, made pursuant to sections 488 and 531 of the Trust and Loan Companies Act, amend the Regulations to permit a trust or loan company to enter into prescribed transactions with its foreign bank parent or with a financial institution controlled by that foreign bank.

The regulatory amendment contains a section, similar to that in the Related Party Transactions (Banks) Regulations, which permits foreign bank subsidiaries to enter into prescribed transactions, such as deposits, with its foreign bank parent or with a financial institutions controlled by that foreign bank. The main purpose of the proposed amendment is to ensure that trust and loan companies controlled by a foreign bank are on a level playing field with Canadian foreign bank subsidiaries.

Alternatives

Given the Government's commitment to ensure that all federally regulated financial institutions (FRFIs) are on a level playing field and the fact that this particular amendment achieves this goal, no other alternatives were considered.

Benefits and Costs

The implementation of the amendment will not generate additional costs to the Office of the Superintendent of Financial Institutions (OSFI) and may give trust or loan companies that are owned by a foreign bank, the opportunity to realize some cost savings.

Consultation

On May 29, 1998, OSFI sent letters to the Trust Companies Association of Canada, Canada Trust and the Canadian Bankers Association soliciting their comments, by June 12, 1998, on the proposed regulatory amendment.

OSFI received a response from the Trust Companies Association indicating that they had no specific comments regarding the proposed amendment. No comments were received from the other recipients. Consequently, we believe the industry is supportive of the proposed amendment.

There was no need to consult other FRFIs, given that they are not affected by the change.

Compliance and Enforcement

These changes will not have a material impact on OSFI's resources or on its ability to supervise FRFIs.

Contact

Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, (613) 990-7472 (Telephone), (613) 998-6716 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to sections 488 and 531 (see footnote b) of the Trust and Loan Companies Act (see footnote c), proposes to make the annexed Regulations Amending the Related Party Transactions (Trust and Loan Companies) Regulations.

Any interested persons 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 Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

November 19, 1998

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE RELATED
PARTY TRANSACTIONS (TRUST AND
LOAN COMPANIES) REGULATIONS

AMENDMENTS

1. The long title of the Related Party Transactions (Trust and Loan Companies) Regulations (see footnote 6) is replaced by the following:

RELATED PARTY TRANSACTIONS (TRUST AND LOAN COMPANIES) REGULATIONS

2. The heading before section 1 and sections 1 and 2 of the Regulations are replaced by the following:

INTERPRETATION

1. The definitions in this section apply in these Regulations.

"Act" means the Trust and Loan Companies Act. (Loi)

"foreign bank" has the same meaning as in section 2 of the Bank Act; (banque étrangère)

3. Section 3 of the Regulations is renumbered as section 2.

4. The Regulations are amended by adding the following after section 2:

3. (1) For the purposes of section 488 of the Act, a company that is controlled by a foreign bank may enter into the following transactions with the foreign bank that controls it, or with a financial institution controlled by that foreign bank:

(a) a transaction that forms an integral part of financial services provided to customers of the company, of the foreign bank or of the financial institution; and

(b) a deposit by the company with the foreign bank or the financial institution

(2) The class of transactions referred to in paragraph (1)(a) includes

(a) interest rate, currency, equity and commodity swaps;

(b) foreign exchange forwards, options and spot transactions;

(c) forward rate agreements;

(d) options on interest rates, futures, commodities, equity indices, shares and ownership interests;

(e) futures on interest rates, currencies and commodities;

(f) transactions involving money market instruments;

(g) loan syndications and asset sales;

(h) transactions involving commodity forwards;

(i) repurchase agreements and other transactions in respect of securities; and

(j) derivative transactions of transactions referred to in any of paragraphs (a) to (i).

COMING INTO FORCE

5. These Regulations come into force on the day on which they are registered.

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Service Charges (Office of the Superintendent of Financial Institutions) Regulations

Statutory Authority

Office of the Superintendent of Financial Institutions Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The proposed Service Charges (Office of the Superintendent of Financial Institutions) Regulations (Service Charges [OSFI] Regulations) are made pursuant to section 23.1 of the Office of the Superintendent of Financial Institutions Act (OSFI Act). Upon promulgation, these Regulations will permit the implementation of a user pay regime. Section 23.1 of the OSFI Act was introduced as part of the 1997 review of the financial institutions legislation (Chapter 15 of the Statutes of Canada, 1997). It provides authority for the Superintendent to assess prescribed charges and applicable disbursements for any service provided by, or on behalf of, the Superintendent. The Services Charges (OSFI) Regulations prescribe user fees for some of OSFI's more significant activities.

In response to concerns raised by industry associations and the Superintendent's goal to develop a more equitable cost allocation system, the Office of the Superintendent of Financial Institutions (OSFI) established an internal task force in the fall of 1996 to examine the feasibility of adopting a modified user pay system. Based on the task force's recommendations, OSFI is proposing a number of changes regarding how it recovers its costs from federally regulated financial institutions (FRFIs). This will result in institutions and non-regulated third parties that place greater demands on OSFI's resources paying a higher proportion of OSFI's annual operating costs via direct user fees. The proposed user pay fees were determined based on in-house analyses of time spent on activities that lend themselves to fees for service and having regard, where possible, to fees charged by other regulatory agencies for similar services. The adoption of such an approach will modify OSFI's current practice of recovering its annual operational costs from institutions or private pension plans solely from formula-based annual assessments.

OSFI believes that the implementation of user pay fees is a natural progression in fulfilling its longer-term objective of developing a more cost-effective regulatory system. During the extensive consultative process, industry associations and individual institutions supported the concept of a user pay oriented system, provided that it could be done in a cost-effective manner.

The views of the associations, along with those of other stakeholders, were integral in shaping OSFI's proposed phased-in approach to implementing fees for user pay services and changes to the current assessment methodology.

The first phase, scheduled for implementation on January 1, 1999, will introduce the fees for the user pay activities as set forth in the proposed Regulations. The proposed fees apply to the processing of applications or requests that are relatively straightforward in nature and, for administrative simplicity, are to be paid up front at the time the requests or applications are filed with OSFI. Notwithstanding the introduction of user fees, OSFI is committed to maintaining unencumbered lines of communication with its various stakeholders.

For complex user pay activities, such as applications involving large mergers or incorporation, OSFI will seek to enter into a separate contractual cost recovery arrangement with the institution or third party making the application. During the consultation process it was agreed that prior to the filing of such an application, the appropriate cost structure (flat fee or hourly rate) would be agreed to in advance by OSFI and the applicant.

As part of Phase II, OSFI will implement fees for a broader range of user pay services for FRFIs and third parties, as well as similar user fees for services undertaken in respect of private pension plans. OSFI will also conduct a full review of the current assessment methodologies used to allocate its annual supervisory costs to FRFIs and pension plans. OSFI will also contemplate the introduction of user fees or assessment surcharges to enable it to recover additional supervisory costs associated with enhanced supervision directly from "problem institutions". Internal analysis indicates that institutions experiencing safety and soundness concerns consume considerably more supervisory resources than do well-managed, financially stable institutions. In this regard, OSFI notes that other regulatory jurisdictions have already introduced, or are considering imposing, additional fees or assessment surcharges against problem institutions. Given the complexity of the issues involved in these matters, OSFI will, as in the past, seek industry input on all such proposals.

OSFI is also seeking legislative amendments, which would enable it to prescribe penalties on institutions for late or erroneous filings. Penalties regulations will be prepared and circulated for comment after the required legislative amendments have been promulgated. The administrative mechanisms for applying penalty fees will be established in consultation with stakeholders during Phase II.

In subsequent phases, OSFI will consider introducing fees for a broader range of user pay activities.

Alternatives

I. Status quo, i.e. no change to the existing methodology for recovering OSFI's annual supervisory costs from individual institutions.

II. Implement a modified user pay system to enable the Superintendent to charge specific users for those services that are provided solely for their benefit.

Analysis

Given the comments received from stakeholders, it appears that Alternative II has the support of OSFI's stakeholders, provided that a modified user pay system is implemented in a cost effective manner and that it will result in a reasonable percentage of OSFI's annual supervisory costs being recovered from fees associated with user pay activities. OSFI expects to recover, in the long-term, between 20 and 25 percent ($8 to $10 million per annum based on 1997-98 experience) of its annual supervisory costs borne by FRFIs. As a result, OSFI has chosen to implement a modified user pay system (Alternative II).

Costs

Implementation of Alternative II will generate no material additional cost to OSFI. The fact that the majority of user fees are to be paid in advance will not significantly add to the revenue management efforts for OSFI. In conjunction with its practices review, OSFI is developing a common time reporting system which will accommodate user pay concerns.

Further, OSFI will not retain any user fee revenues for its own account, as the modified user pay approach has been structured to be revenue neutral by industry. What this means is that any fee revenue collected from institutions in a given industry will be deducted from OSFI's annual supervisory costs allocated to that industry. The residual balance of the supervisory costs will continue to be recovered from institutions in each industry using a formula-based annual assessment.

Consultation

Following a number of discussions with the Industry Associations (Canadian Bankers Association, the Trust Companies Association of Canada, the Canadian Life and Health Insurance Association Inc. and the Insurance Council of Canada), OSFI's User Pay Task Force outlined a number of options for introducing user fees in its June 1997 report. The report was provided for comment to each association, a number of private pension plans and selected institutions. Comments were received during the summer of 1997 and further consultations were held with industry stakeholders during the fall. This process culminated in OSFI submitting its user fee proposal to the industry for comment on March 20, 1998. That consultation paper was provided to all parties that received copies of the June 1997 report, and to all federally regulated banks, trust and loan companies, life and property and casualty insurance companies, fraternal benefit societies and cooperative credit associations. In addition to being posted on OSFI's Internet Web site, the March 1998 consultation paper was also provided to provincial regulators and a number of non-regulated third parties, who would be affected by the introduction of fees for user pay activities.

The comments received from the industry stakeholders regarding the March 1998 consultation paper have been supportive of OSFI's overall approach for the introduction of a modified user pay system.

Compliance and Enforcement

These amendments will require some minor changes in OSFI procedures (i.e. maintenance of a time tracking system for user pay activities). There are no additional personnel resources required.

Contact

Mr. Jack Heyes, Chairman, User Pay Task Force, Office of the Superintendent of Financial Institutions, 121 King Street W, P.O. Box 39, Toronto, Ontario M5H 3T9, (416) 973-8529 (Tele-phone), (416) 973-8966 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to sections 23.1(see footnote d) and 23.3 (see footnote e) of the Office of the Superintendent of Financial Institutions Act (see footnote f), proposes to make the annexed Service Charges (Office of the Superintendent of Financial Institutions) Regulations.

Any interested persons may make representations concerning the proposed Regulations within 15 days after the date of publication of this notice. All such representations must be addressed to Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

November 19, 1998

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

SERVICE CHARGES (OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS) REGULATIONS

INTERPRETATION

1. The words and expressions used in these Regulations have the same meanings as in the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act, as the case may be.

CHARGES

2. For the purposes of subsection 23.1(2) of the Office of the Superintendent of Financial Institutions Act, the charge to be paid for the service of processing an application described in column 1 of the schedule is the amount set out in column 2.

COMING INTO FORCE

3. These Regulations come into force on January 1, 1999.

SCHEDULE (Section 2)

Item	Column 1 Application	Column 2 Charge ($)
1.	Incorporation of a body corporate	20,000
2.	Order under section 574 of the Insurance Companies Act	20,000
3.	Continuance of a body corporate	20,000
4.	Amalgamation of bodies corporate	10,000
5.	Approval of the acquisition or increase of a significant interest	10,000
6.	Approval of the acquisition or increase of a substantial investment	5,000
7.	Consent under section 521 of the Bank Act	5,000
8.	Approval under paragraph 518(3)(b) of the Bank Act	2,500
9.	Order for the maintenance and processing of information or data outside Canada	3,000
10.	Approval of any one of the following:	2,000
	(a) purchase or redemption of shares or other securities; (b) reduction of stated capital; (c) amendment to approved asset-to-capital multiple; (d) amendment to capital by-laws; (e) amendment to an order to commence and carry on business or to an order under section 574 of the Insurance Companies Act; or (f) issuance of shares or other securities for consideration other than cash
11.	Written interpretation of Acts, regulations, guidelines or rulings	500
12.	Written interpretation or precedent-setting ruling relating to the quality of capital	4,000
13.	Accreditation of a provincial reinsurer	2,500
14.	Approval to be reinsured by an unregistered related party	500
15.	Approval of a reinsurance trust agreement or of a letter of credit in lieu of assets	500
16.	Approval under section 254 or 587.1 of the Insurance Companies Act	10,000
17.	Approval of a sale of all or substantially all assets	10,000
18.	Voluntary liquidation	2,500
19.	Any one of the following corporate documents (per request and per body corporate):	100
	(a) certificates of confirmation;
	(b) certified copies of letters patent or of incorporation or amalgamation documents; and
	(c) corporate history of a body corporate

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Footnote a

R.S., 1985, c. 18 (3rd Supp.), Part I

Footnote 1

SOR/94-528; SOR/97-483

Footnote 2

SOR/97-483

Footnote 3

SOR/97-483

Footnote 4

SOR/97-483

Footnote 5

SOR/97-483

Footnote b

S.C., 1997, c. 15, s. 408

Footnote c

S.C., 1991, c. 45

Footnote 6

SOR/96-277

Footnote d

S.C., 1997, c. 15, s. 339

Footnote e

S.C., 1997, c. 15, s. 339

Footnote f

R.S., 1985, c. 18 (3rd Supp.), Part I

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