B.C. Reg. 565/2004, deposited December 13, 2004, pursuant to the FINANCIAL INSTITUTIONS ACT [Section 289]. Order in Council 1226/2004, approved and ordered December 11, 2004.

On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders that, effective December 31, 2004, the Capital Requirements Regulation, B.C. Reg. 315/90, is amended as set out in the attached Schedule.

— G. M. COLLINS, Minister of Finance; S. BOND, Presiding Member of the Executive Council.

Schedule

1 Section 1 (2) of the Capital Requirements Regulation, B.C. Reg. 315/90, is amended

(a) by adding "authorized to carry on deposit business" after "extraprovincial trust corporation", and

(b) by striking out "section 158 (4)" and substituting "section 158 (5)".

2 Section 2.1 is amended

(a) by repealing subsections (1) and (2) and substituting the following:

(1) In this section:

"credit union" does not include a central credit union;

"retained earnings" includes that portion of a credit union's contributed surplus which was, prior to the amalgamation of the credit union with one or more other credit unions or prior to the acquisition of assets by a credit union from another credit union under an asset transfer agreement, retained earnings of the credit union.

(2) Subject to subsections (4) to (8), at least 35% of the capital base of a credit union as determined under section 2 (1) must consist of the credit union's retained earnings. ,

(b) by repealing subsections (3) and (4) and substituting the following:

(4) If, on or after December 31, 2004, a credit union meets the requirement of subsection (2) but, at any time after that, its capital base as determined under section 2 (1) does not consist of at least 35% of retained earnings, then the capital base of the credit union is an amount equal to the credit union's retained earnings divided by 35%. ,

(c) in subsection (5) by striking out "if the business authorization is issued on or after January 1, 1997", and

(d) by repealing subsection (7) and substituting the following:

(7) Subsection (2) does not apply to an amalgamated credit union resulting from the amalgamation of a credit union with one or more other credit unions or the acquisition of assets by a credit union from another credit union under an asset transfer agreement, for 5 years from the date that the most recent business authorization to carry on deposit business was issued to one of the credit unions.

(8) If an amalgamated credit union fails to meet the 35% requirement of subsection (2) within the time referred to in subsection (7), then the capital base of the credit union is an amount equal to the credit union's retained earnings divided by 35%. ,

3 Section 7 is repealed and the following substituted:

Capital base adequacy — extraprovincial
corporations — designated jurisdictions

7 The amount that under section 67 (1) of the Act constitutes a minimum adequate capital base of an extraprovincial corporation whose primary jurisdiction, as defined in section 157 of the Act, is Canada or a province designated under section 158 (5) of the Act, is the amount that constitutes an adequate capital base of that corporation under the laws of its primary jurisdiction.

Capital base adequacy — deposit taking extraprovincial
trust corporations from non-designated jurisdictions

7.1 (1) For the purposes of this section, the calculated value of the risk weighted assets of an extraprovincial trust corporation authorized to carry on deposit business whose primary jurisdiction, as defined in section 157 of the Act, is not Canada or a province designated under section 158 (5) of the Act, must be determined by reference to sections 14 to 17, 19 and 20.

(2) The amount that under section 67 (1) of the Act constitutes a minimum adequate capital base of an extraprovincial trust corporation referred to in subsection (1), is the amount determined by multiplying the calculated value from time to time of the corporation's risk weighted assets by 8%.

Capital base adequacy — extraprovincial
insurance corporations from non-designated jurisdictions

7.2 The amount that under section 67 (1) of the Act constitutes a minimum adequate capital base of an extraprovincial insurance corporation whose primary jurisdiction, as defined in section 157 of the Act, is not Canada or a province designated under section 158 (5) of the Act, is the amount that constitutes an adequate capital base of that corporation under the laws of its primary jurisdiction.

4 Section 8 is repealed and the following substituted:

Capital base adequacy —
general insurance companies

8 The amount that under section 67 (1) of the Act constitutes a minimum adequate capital base of an insurance company that is authorized to carry on one or more classes of general insurance business but is not authorized to carry on life insurance business, is 100% of the minimum adequate capital base amount determined in accordance with the Minimum Capital Test (MCT) guidelines as established and published, and amended from time to time, by the Superintendent of Financial Institutions Canada for federally regulated property and casualty insurance companies.

Capital base adequacy —
life insurance companies

8.1 The amount that under section 67 (1) of the Act constitutes a minimum adequate capital base of an insurance company that is authorized to carry on life insurance business is 120% of the minimum adequate capital base amount determined in accordance with the Minimum Continuing Capital and Surplus Requirements for Life Insurance Companies (MCCSR) guidelines as established and published, and amended from time to time, by the Superintendent of Financial Institutions Canada.

5 Section 9 is repealed and the following substituted:

Capital base adequacy — credit unions and extraprovincial
credit unions from non-designated jurisdictions

9 (1) For the purposes of this section, the calculated value of the risk weighted assets of a credit union or extraprovincial credit union whose primary jurisdiction, as defined in section 157 of the Act, is not Canada or a province designated under section 158 (5) of the Act, must be determined by reference to sections 14 to 17, 19 and 20.

(2) The amount that under section 67 (1) of the Act constitutes an adequate capital base of a credit union or extraprovincial credit union referred to in subsection (1) is the amount determined by multiplying the calculated value from time to time of the credit union's or extraprovincial credit union's risk weighted assets by 6%.

6 Section 11 is repealed and the following substituted:

Capital base adequacy — trust companies and non-deposit
taking extraprovincial trust corporations from non-designated jurisdictions

11 For the purposes of section 67 (1) of the Act, the amount that constitutes a minimum adequate capital base of a trust company or extraprovincial trust corporation authorized to carry on trust business only, whose primary jurisdiction, as defined in section 157 of the Act, is not Canada or a province designated under section 158 (5) of the Act, is the amount determined by multiplying the total value of all assets the trust company or extraprovincial trust corporation holds in trust by 0.5%.

7 Section 12 is repealed and the following substituted:

Meaning of "extraprovincial trust corporation"
in sections 15 to 20

12 In sections 15 to 20 "extraprovincial trust corporation" means an extraprovincial trust corporation authorized to carry on deposit business whose primary jurisdiction, as defined in section 157 of the Act, is not Canada or a province designated under section 158 (5) of the Act.

8 Section 13 is repealed.

9 Section 14 is amended

(a) in subsection (1) (f) of the definition of "commercial loan" by striking out "trust company or",

(b) in subsection (1) by repealing paragraph (a) in the definition of " "deposit taking institution" ",

(c) in subsection (1) at the end of paragraph (e) of the definition of "deposit taking institution" by adding "that is authorized to carry on deposit business",

(d) in subsection (2) by striking out "or 13",

(e) in subsection (2) by striking out "or of a trust company authorized to carry on deposit business" and substituting "or of an extraprovincial trust corporation",

(f) in subsection (3) by striking out "sections 9 and 13" and substituting "section 9",

(g) in subsection (3) by striking out "of a trust company authorized to carry on deposit business or" and substituting "of an extraprovincial trust corporation or",

(h) by repealing subsection (3) (b) and substituting the following:

(b) the total amount of risk weighted exposure in respect of off balance sheet items determined by reference to section 4, "Off Balance Sheet" instruments of the Capital Adequacy Requirement guidelines as established and published, and amended from time to time, by the Superintendent of Financial Institutions Canada for use by Canadian banks and federally regulated trust and loan companies to meet capital adequacy standards. , and

(i) in item 11 of the Table of On Balance Sheet Items by striking out "trust company or" and substituting "extraprovincial trust corporation or".

10 Section 15 (1) and (2) is amended by striking out "a trust company" and substituting "an extraprovincial trust corporation".

11 Sections 16 and 20 (a), (b) and (c) are amended by striking out "trust company's or" wherever it appears and substituting "extraprovincial trust corporation's or".

12 Section 17, 19 and 20 are amended by striking out "a trust company or" and substituting "an extraprovincial trust corporation or".

13 Section 20 (a) is amended by striking out "the trust company" and substituting "the extraprovincial trust corporation" and by striking out "13 to 20" and substituting "14 to 20".

14 Section 21 (d) is amended by striking out "not authorized to carry on deposit business".

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