Office of the Superintendent of Financial Institutions
The applicant is generally expected to provide:
the rationale for seeking the reduction of stated capital;
statements showing the number of shares by class of the applicant that are issued and outstanding;
the proposed timing and amount of the reduction of stated capital;
proof of publication of the notice of intention to apply for approval of the Superintendent to reduce the stated capital of the applicant (the Notice)Footnote 1;
a confirmation from the applicant that it has not, since publication of the Notice, received any objections related to the Notice or otherwise with regard to the proposed reduction of stated capital, or has addressed any objection received (together with a description of the manner in which each objection has been addressed);
an executed copy of the special resolution authorizing the reduction of stated capital and specifying the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted (the Special Resolution)Footnote 2;
results of voting by class of shares in respect of the Special Resolution; and
an analysis of the effect of the reduction of stated capital on the financial position and risk profile of the applicant, including:
a comparative pro forma balance sheet (pre- and post-reduction of stated capital) including relevant assumptions,
a comparative pro forma capital position and liquidity positionFootnote 3 (pre- and post- reduction of stated capital) that confirms compliance with the applicant's internal target(s) and with OSFI's requirements applicable to the applicant, together with relevant assumptions and a breakdown of:
in the case of a deposit-taking institution, all elements used to calculate:
the capital ratios, in accordance with the Capital Adequacy Requirements Guideline,
the leverage ratio, in accordance with the Leverage Requirements Guideline, and
the liquidity coverage ratio, in accordance with the Liquidity Adequacy Requirements Guideline,
in the case of a life insurance company, all elements used to calculate the Life Insurance Capital Adequacy Test, or
in the case of a property and casualty insurance company, all elements of the Minimum Capital Test or the Mortgage Insurer Capital Adequacy Test, as applicable, and
a confirmation that, following the reduction of stated capital, the applicant will be in compliance with its relevant policies, which may include those related to liquidity, capital management, risk management and investments.
OSFI expects the Notice to set out, among other things:
the name of the applicant;
a copy of the actual or proposedFootnote 4 Special Resolution; and
the Legislative Authority under which the Notice is given.
An application pursuant to any of the Legislative Authorities must be made within 3 months after the time of the passing of the Special Resolution, and the Notice must be published in the Canada Gazette prior to making the applicationFootnote 5. The applicant may publish the Notice in the Canada Gazette prior to the passing of the Special Resolution provided that the applicant indicates in the Notice the date on which the Special Resolution will be presented to its shareholders or members, and if the Special Resolution passed differs substantively from the proposed Special Resolution published in the Notice, OSFI will expect the applicant to republish the Notice.
Federally regulated entities are expected to maintain adequate capital and liquidity at all timesFootnote 6 and applicants should ensure that any planned reduction of stated capital will not impede their ability to meet capital and liquidity targets required by OSFI or its internal processes.Footnote 7
The following email address should be used for the initial submission of documents in support of requests for approval(s) that are addressed in this document: firstname.lastname@example.org. Once the initial submission has been received, a case officer will be assigned to the matter. Thereafter, all case-related documents and correspondence should be directed to the case officer.
Requests for approval(s) that are addressed in this document are not subject to a service charge.Footnote 8
The information requirements and administrative guidance are intended to satisfy typical applications. They have been derived from OSFI's experience in assessing applications. Applicants who provide all information and material requested can generally expect a more timely assessment of their applications. As appropriate to the circumstances, OSFI may request additional information, take into account other matters, impose terms and conditions, or require undertakings
The Notice is described in subsections 75(5) of the BA, 78(5) of the TLCA, 79(5) of the ICA and 82(5) of the CCAA, as applicable. Please see also items 1 and 2 of the Administrative Guidance below for more information.
Return to footnote 1
An applicant may submit portions of the information requirements to OSFI prior to the passing of the Special Resolution, but a formal application cannot be made until the Special Resolution has been passed (and the Notice has been published and the confirmation in item 5 has been provided). Please see item 2 of the Administrative Guidance for more information.
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A liquidity position is only expected to be provided where the applicant is a deposit-taking institution.
Return to footnote 3
Please see item 2 of the Administrative Guidance for more information.
Return to footnote 4
Please see subsections 75(5) of the BA, 78(5) of the TLCA, 79(5) of the ICA or 82(5) of the CCAA, as applicable.
Return to footnote 5
Please see subsections 485(1) of the BA, 473(1) of the TLCA, 515(1) of the ICA or 409(1) of the CCAA, as applicable.
Return to footnote 6
Federally regulated entities are prohibited from reducing their stated capital where such action would cause them to contravene capital/liquidity requirements or any direction to increase or maintain capital/liquidity. Please see subsections 75(2) of the BA, 78(2) of the TLCA, 79(2) of the ICA or 82(2) of the CCAA, as applicable.
Return to footnote 7
Please see Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002.
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