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Volume 47, No. 25

B.C. Reg. 565/2004

The British Columbia Gazette,

Part II

December 14, 2004

B.C. Reg. 565/2004, deposited December 13, 2004, pursuant

to the FINANCIAL INSTITUTIONS ACT [Section 289]. Order in Council

1226/2004, approved and ordered December 11, 2004.

On the recommendation of the undersigned, the Lieutenant Governor, by and w ith

the advice and consent of the Executive Council, orders that, effective December 31, 2004,

the Capital Requirements Regulation, B.C. Reg. 315/90, is amended

as set out in the attached Schedule.

— G. M. COLLINS, Minister

of Finance; S. BOND, Presiding Member of the Executive Council.

Schedule

Section 1 (2) of the Capital Requirements Regulation, B.C. Reg. 315/90, is amended

(

a) by adding "authorized to carry on deposit business"

after "extraprovincial trust corporation", and

(

b) by striking out "section 158 (4)" and substituting

"section 158 (5)".

Section 2.1 is amended

(

a) by repealing subsections (1) and (2) and substituting

the following:

(1) In this section:

"credit union" does not include a central credit

union;

"retained earnings" includes that portion of a

credit union's contributed surplus which was, prior to the amalgamation of the

credit union with one or more other credit unions or prior to the acquisition

of assets by a credit union from another credit union under an asset transfer

agreement, retained earnings of the credit union.

(2) Subject to subsections (4) to (8), at least 35% of

the capital base of a credit union as determined under

section 2 (1)

must consist of the credit union's retained earnings. ,

(

b) by repealing subsections (3) and (4) and substituting

the following:

(4) If, on or after December 31, 2004, a credit union

meets the requirement of subsection (2) but, at any time after that, its

capital base as determined under

section 2 (1) does not consist of

at least 35% of retained earnings, then the capital base of the credit union

is an amount equal to the credit union's retained earnings divided by 35%. ,

(

c) in subsection (5) by striking out "if the business

authorization is issued on or after January 1, 1997", and

(

d) by repealing subsection (7) and substituting the

following:

(7) Subsection (2) does not apply to an amalgamated credit

union resulting from the amalgamation of a credit union with one or more other

credit unions or the acquisition of assets by a credit union from another credit

union under an asset transfer agreement, for 5 years from the date that

the most recent business authorization to carry on deposit business was issued

to one of the credit unions.

(8) If an amalgamated credit union fails to meet the

35% requirement of subsection (2) within the time referred to in subsection (7),

then the capital base of the credit union is an amount equal to the credit union's

retained earnings divided by 35%. ,

Section 7 is repealed and the following substituted:

Capital base adequacy — extraprovincial

corporations — designated jurisdictions

7 The amount that under

section 67 (1) of the

Act constitutes a minimum adequate capital base of an extraprovincial corporation

whose primary jurisdiction, as defined in

section 157 of the Act, is Canada

or a province designated under

section 158 (5) of the Act, is the amount that

constitutes an adequate capital base of that corporation under the laws of its

primary jurisdiction.

Capital base adequacy — deposit taking extraprovincial

trust corporations from non-designated jurisdictions

7.1

(1) For the purposes of this section, the

calculated value of the risk weighted assets of an extraprovincial trust corporation

authorized to carry on deposit business whose primary jurisdiction, as defined

section 157 of the Act, is not Canada or a province designated under

section 158 (5) of the Act, must be determined by reference to sections 14

to 17, 19 and 20.

(2) The amount that under

section 67 (1) of the Act constitutes

a minimum adequate capital base of an extraprovincial trust corporation referred

to in subsection (1), is the amount determined by multiplying the calculated

value from time to time of the corporation's risk weighted assets by 8%.

Capital base adequacy — extraprovincial

insurance corporations from non-designated jurisdictions

7.2 The amount that under

section 67 (1) of the

Act constitutes a minimum adequate capital base of an extraprovincial insurance

corporation whose primary jurisdiction, as defined in

section 157 of the

Act, is not Canada or a province designated under

section 158 (5)

of the Act, is the amount that constitutes an adequate capital base of that

corporation under the laws of its primary jurisdiction.

Section 8 is repealed and the following substituted:

Capital base adequacy —

general insurance companies

8 The amount that under

section 67 (1) of the

Act constitutes a minimum adequate capital base of an insurance company that

is authorized to carry on one or more classes of general insurance business

but is not authorized to carry on life insurance business, is 100% of the minimum

adequate capital base amount determined in accordance with the Minimum Capital

Test (MCT) guidelines as established and published, and amended from time

to time, by the Superintendent of Financial Institutions Canada for federally

regulated property and casualty insurance companies.

Capital base adequacy —

life insurance companies

8.1 The amount that under

section 67 (1) of the

Act constitutes a minimum adequate capital base of an insurance company that

is authorized to carry on life insurance business is 120% of the minimum adequate

capital base amount determined in accordance with the Minimum Continuing Capital

and Surplus Requirements for Life Insurance Companies (MCCSR) guidelines

as established and published, and amended from time to time, by the Superintendent

of Financial Institutions Canada.

Section 9 is repealed and the following substituted:

Capital base adequacy — credit unions and extraprovincial

credit unions from non-designated jurisdictions

(1) For the purposes of this section, the calculated

value of the risk weighted assets of a credit union or extraprovincial credit

union whose primary jurisdiction, as defined in

section 157 of the Act,

is not Canada or a province designated under

section 158 (5) of the

Act, must be determined by reference to sections 14 to 17, 19 and 20.

(2) The amount that under

section 67 (1) of the Act constitutes

an adequate capital base of a credit union or extraprovincial credit union referred

to in subsection (1) is the amount determined by multiplying the calculated

value from time to time of the credit union's or extraprovincial credit union's

risk weighted assets by 6%.

Section 11 is repealed and the following substituted:

Capital base adequacy — trust companies and non-deposit

taking extraprovincial trust corporations from non-designated jurisdictions

11 For the purposes of

section 67 (1) of the Act,

the amount that constitutes a minimum adequate capital base of a trust company

or extraprovincial trust corporation authorized to carry on trust business only,

whose primary jurisdiction, as defined in

section 157 of the Act, is not

Canada or a province designated under

section 158 (5) of the Act,

is the amount determined by multiplying the total value of all assets the trust

company or extraprovincial trust corporation holds in trust by 0.5%.

Section 12 is repealed and the following substituted:

Meaning of "extraprovincial trust corporation"

in sections 15 to 20

12 In sections 15 to 20 "extraprovincial trust

corporation" means an extraprovincial trust corporation authorized to carry

on deposit business whose primary jurisdiction, as defined in

section 157

of the Act, is not Canada or a province designated under

section 158 (5)

of the Act.

Section 13 is repealed.

Section 14 is amended

(

a) in subsection (1) (

f) of the definition of "commercial

loan" by striking out "trust company or",

(

b) in subsection (1) by repealing paragraph (

a) in the

definition of " "deposit taking institution" ",

(

c) in subsection (1) at the end of paragraph (

e) of

the definition of "deposit taking institution" by adding "that is authorized

to carry on deposit business",

(

d) in subsection (2) by striking out "or 13",

(

e) in subsection (2) by striking out "or of a trust

company authorized to carry on deposit business" and substituting "or of an

extraprovincial trust corporation",

(

f) in subsection (3) by striking out "sections 9 and

13" and substituting "section 9",

(

g) in subsection (3) by striking out "of a trust company

authorized to carry on deposit business or" and substituting "of an extraprovincial

trust corporation or",

(

h) by repealing subsection (3) (

b) and substituting

the following:

(

b) the total amount of risk weighted exposure in respect

of off balance sheet items determined by reference to

section 4, "Off Balance

Sheet" instruments of the Capital Adequacy Requirement guidelines as established

and published, and amended from time to time, by the Superintendent of Financial

Institutions Canada for use by Canadian banks and federally regulated trust

and loan companies to meet capital adequacy standards. , and

(

i) in item 11 of the Table of On Balance Sheet Items

by striking out "trust company or" and substituting "extraprovincial trust corporation or".

Section 15 (1) and (2) is amended by striking out "a trust company" and substituting "an extraprovincial trust corporation".

11 Sections 16 and 20 (a), (

b) and (

c) are amended by striking out "trust company's

or" wherever it appears and substituting "extraprovincial trust corporation's or".

Section 17, 19 and 20 are amended by striking out "a trust company or" and

substituting "an extraprovincial trust corporation or".

Section 20 (

a) is amended by striking out "the trust company" and substituting

"the extraprovincial trust corporation" and by striking out "13 to 20"

and substituting "14 to 20".

Section 21 (

d) is amended by striking out "not authorized to carry on deposit business".

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