British Columbia Order in Council — Amendment to Liquidity Requirement Regulation (O.C. 622/2020)

O.C. 622/2020

British Columbia — Orders in Council

PROVINCE OF BRITISH COLUMBIA ORDER OF THE LIEUTENANT GOVERNOR IN COUNCIL Order in Council No. , Approved and Ordered Lieutenant Governor Executive Council Chambers, Victoria On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders that, effectiv e January 1, 2021, the Liquidity Requirement Regulation, B.C. Reg. 332/90, is amended as set out in the attached Schedule. Minister of Finance Presiding Member of the Executive Council (This

part is for administrative purposes only and is not part of the Order.) Authority under which Order is made: Act and section: Financial Institutions Act, R.S.B.C. 1996, c. 141, s. 289 Other: OIC 1356/90 R10465843 December 14, 2020

SCHEDULE

Section of the Liquidity Requirement Regulation, B.C. Reg. 332/90, is amended (

a) by repealing the

definitions of “debt liability” , “deposit taking institution” , “prescribed liquid assets” and “specified borrowings”, and (

b) by adding the following

definitions: “debt liabilities” means bonds, debentures, notes, certi ficates of deposit and other similar instruments, but does not include mortgages; “unencumbered asset” , in respect of a credit union, means an asset of the credit union (

a) that is free of legal, re gulatory, contractual or other restrictions on the credit union’s ability to liquidate, sell, transfer or assign the asset, (

b) that is not pledged, explicitly or implicitly, to secure, collateralize or enhance credit for any transaction, and (

c) that is not designated to cover the credit union’s operational costs. 2

Section is repealed. 3

Section is amended (

a) by repealing subsections (2) to (4.2), and (

b) by adding the following subsections:

(5) For the purposes of section 67 (1) of the Act, a credit union has adequate liquid assets in relation to the business ca rried on by it if the credit union holds unencumbered assets placed in trust with Central Credit Union that are at least equal to 8% of the holding credit uni on’s aggregate deposit and other debt liabilities. (6) Subsections (7) to (12) apply for the purposes of subsection (5).

(7) The unencumbered assets placed in trus t must be held by a custodian that is a securities firm as defi ned in

section of the Bankruptcy and Insolvency Act (Canada).

(8) The unencumbered assets placed in trust must consist of any or all of the following: (

a) subject to subsection (9), high-quality liquid assets within the meaning of

Chapter of the Liquidity Adequacy Requirements Guideline issued by the Office of the Superintendent of Financial Institutions (Canada), as amended from time to time; (

b) subject to subsection (11), bankers’ acceptances that have (

i) a term to maturity of 30 days or less, and (ii) a counterparty that has been de signated as a domes tic systemically important bank by order of the Superintendent of Financial Institutions (Canada); (

c) subject to subsection (11), cash deposits; (

d) assets prescribed by the rules made by the Authority, if any.

(9) The high-quality liquid assets within the meaning of the Liquidity Adequacy Requirements Guideline referred to in s ubsection (8) (

a) are not subject to any haircuts or caps set out in that Guideline.

(10) Subject to subsection ( 11), a credit union’s cash on hand may be counted as part of its unencumbered assets placed in trust.

(11) The sum of the following amounts mu st not exceed 2% of a credit union’s aggregate deposit and other debt liabilities: (

a) the book value of the bankers’ accept ances referred to in subsection (8) (

b) that are part of the credit union’s unencumbered assets placed in trust; (

b) the amount of the cash deposits referr ed to in subsection (8) (

c) that are part of the credit union’s unencumbered assets placed in trust; (

c) the amount of cash on hand counted unde r subsection (10) as part of the credit union’s unencumbered assets placed in trust.

(12) The following security interests in a credit union’s unencum bered assets placed in trust are permitted: (

a) a lien, charge or other interest granted in favour of The Canadian Depository for Securities Limited or other depository or securities clearing organizations; (

b) a lien, charge or other interest gran ted in favour of the custodian referred to in subsection (7), in respect of (

i) fees and expenses payable to the custodian for custodial services, or (ii) amounts payable to the custodian for securities purchased by the custodian on behalf of the credit union. 4 The following

section is added: Transition – deposits in Central 1 5.01

(1) For the purposes of section 5 (5), a credit union’s cash deposits in Central Credit Union may be counted as part of the depositing credit union’s unencum- bered assets placed in trust.

(2) This

section is repealed on January 15, 2021.

Document details

Collection	British Columbia — Orders in Council
Citation	O.C. 622/2020
Type	order_in_council
Volume / chapter	arc oic 0622 2020
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	e32c1f08755b2119baea3327a9f9fe0af879598e

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