The government is inviting input from Canadians on proposed new rules up to July 17, 2017, you can submit your thoughts.
The government will be putting steps in place to avoid the possibility of failure or bailouts required to prop up the major banks. Consistent with international standards, Canada has begun implementing measures to safeguard the stability of the financial system and to protect taxpayers.
Royal Assent was given to the Bank Recapitalization (Bail-in) Regime on June 22, 2016. The regime is an important additional tool to keep a major bank open and operating in the unlikely event of a failure, by allowing regulatory authorities to convert some of a failing bank’s debt into common shares to recapitalize the bank and restore its viability.
Canadians are being given the opportunity to comment on the following aspects of the regime:
• The scope of liabilities covered
• The process to be followed in the event of a conversion under the regime
• Disclosure requirements that apply to any debt and shares that are subject to conversion
• The process for compensating any investors who are worse off, relative to liquidation of the bank, as a result of the recapitalization
Following the comment period (ending July 17), a final version of the regulations will be published, likely in the Fall of 2017.