Supplementary Return for Foreign Bank Branches (K3)

Quarterly supplementary return for foreign bank branches

Purpose

The purpose of this return is to provide the Superintendent of Financial Institutions with information on the investments that make up the capital equivalency deposit and its compliance with the Office guideline, on the liabilities and head office account of the Foreign Bank Branch in Canada, and on the prescribed deposits as defined under Section 545 of the Bank Act.

Statutory

Section 600 of the Bank Act.

Application

This return applies only to full service foreign bank branches.

Publication

Information from this return is not published.

Frequency

Quarterly-fiscal

Contact person

Provide name and phone number of person to contact regarding any questions about this return.

Reporting dates

The return is to be completed as of the last day of each fiscal quarter and submitted within * 30 days * of the reporting date.

Contact agency

OSFI.

Quarterly supplementary return for foreign bank branches

The first reporting date was for the 3rd fiscal quarter 2000.

This return applies only to full-service foreign bank branches.

All amounts are to be expressed in thousands of Canadian dollar equivalents.

General instructions

Asset and liability categories used in this return are Highlighted text*generally* consistent with the "Monthly Balance Sheet". Highlighted text*Further clarification pertaining to this return are provided below.*

The average amount outstanding at the end of each quarter may be based on daily or weekly averages.

Where these instructions indicate that a certain category includes particular items, the particular items listed do not limit the generality of the heading but indicate the kind of items that are to be reported here.

Section I - Highlighted text*Foreign Bank Branch Deposit Requirement (FBB Deposit) report*

Amounts in Section I are to be reported as at quarter-end and for the average of the fiscal quarter.

Foreign bank branches are to report the amounts of investment in custody with its depository.

Highlighted text*For line 2(b)(i), amounts due to Head Office can include items such as:*

• Highlighted text*Accrued expenses due to Head Office*
• Highlighted text*Accrued interest payable due to Head Office*
• Highlighted text*Amounts due to other branches of Head Office*

Highlighted text*Please refer to OSFI Guideline A10 - Foreign Bank Branch Deposit Requirement for additional guidance to this section.*

Section II - Head office account reconciliation

Section II covers all transactions of the reporting branch with its head office, including total comprehensive income (loss) and the amount of group allowance for credit risk booked at the branch.

Highlighted text*SECTION II – MEMO ITEMS*

Highlighted text*For line 3 Off Balance Sheet Items - credit equivalent amounts must be reported for these items.  Credit equivalent amounts are calculated by multiplying the notional principal amounts by the indicated credit conversion factors.*

Highlighted text*Calculation of the effect of selected Section II Memo Items on the FBB Deposit Ratio:*

Highlighted text*From Section I Total Foreign Bank Branch Liabilities (B):*

• Highlighted text*Deduct Accrued Expenses*
• Highlighted text*Add Total Off Balance Sheet items (after applying Credit Conversion Factor)*
• Highlighted text*If  Due from Head Office/Affiliates and other branches of Head Office > Due to Head Office/Affiliates and other branches of Head Office  then Add Due from Head Office/ Affiliates and other branches of Head Office minus Due to Head Office/ Affiliates and other branches of Head Office, Otherwise If
  Due From Head Office/ Affiliates and other branches of Head Office Due to Head Office/ Affiliates and other branches of Head Office then Add Zero.*

Highlighted text*Divide Section I Total FBB Deposit (A) by the resulting amount of Total Foreign Bank Branch Liabilities (B) after applying the three bullets above.*

Highlighted text*For Line 2 (a) (i) amounts due to Head Office DPAs 5210 and 5310; and  Line 2 (b) (i) due from Head Office DPAs 5213 and 5313: should exclude amounts due to other branches of the Head Office.  Amounts due to other branches of Head Office should be included in line 2(a)(iii) (DPAs 5212 and 5312) and amount due from other branches of head Office should be included in line 2(b)(iii) (DPAs 5215 and 5315).*

Section III - DE minimus deposit return

Foreign bank branches are to report deposits less than $150,000 and those qualified as prescribed deposits under this section. The allowable amount of deposits less than $150,000 and the definition of prescribed deposits are outlined under Section 545 of the Bank Act and the related Prescribed Deposits (Authorized Foreign Banks) Regulations dated February 10, 2000.

In lines 1 to 4 the information is to be reported as at quarter-end Highlighted text*for the first column* and in Highlighted text*the second column* the information is to be reported for the average of the fiscal quarter.

Section III - Memo items

Highlighted text*For line 2, "Assets outside Canada" mean that the assets owned and booked by the foreign bank branch is in Canada, but the location of the assets is outside Canada.*

Highlighted text*For loans, it means "Loans to non-Canadian Residents".*

Highlighted text*For bank accounts, it means a bank account located outside Canada.*

Highlighted text*For line 3, "Domiciled" means the borrower is physically located in Canada.*

Highlighted text*For line 4, if any one of the collateral or guarantee is outside Canada, it should be considered "outside". Please do not double count.*