The Canada Deposit Insurance Corp. (CDIC) has launched a consultation for public comment on proposed changes to requirements related to the eligibility for insurance coverage of deposits held in joint and trust accounts, the federal Crown corporation announced on Friday.
A consultation paper outlines the changes that would reshape the CDIC’s joint and trust account disclosure by-law (JTDB).
The JTDB changes cover:
- the type of information regarding joint and trust accounts that trustees must provide to CDIC member institutions and when that information needs to be provided;
- requirements for member institutions regarding the management of information pertaining to trust deposits; and
- disclosure requirements for co-owned deposits and registered deposits held in a nested trust.
As part of the 2018 federal budget bill, which received Royal Assent in June, certain amendments were made to the CDIC Act to reflect the results of the Deposit Insurance Review, conducted in 2016. The purpose of that review was to introduce changes to CDIC to protect depositors, support stability of the Canadian financial system, and promote efficient and competitive financial services.
As a result, CDIC coverage will be extended to two new insurance categories: deposits held in RESPs and deposits held in RDSPs.
In addition, CDIC coverage will be eliminated from one category: deposits for realty taxes on mortgaged property (i.e. mortgage tax accounts.)
In its consultation paper, the CDIC proposes that the amendments pertaining to trust deposits, as well as broader changes to CDIC coverage, come into force on April 30, 2020.
Comments on the consultation are due Sept. 28.