You are here: Home > Lawyer Regulation > Practice Directions > 00-01 : Canada Deposit Insurance Corporation Reporting

00-01 : Canada Deposit Insurance Corporation Reporting

The Society wishes to remind members of Rule 133.1 of The Law Society Rules which requires compliance with the reporting and disclosure requirements set forth in The Canada Deposit Insurance Corporation Act, the Schedule thereto and the CDIC Joint and Trust Account Disclosure By-law.

Canada Deposit Insurance Corporation (CDIC) insures eligible deposits at each member institution in the event that a member financial institution is unable to meet its debt obligations. All financial institutions are not CDIC insured. Notable exceptions in Manitoba are credit unions or caisse populaires incorporated under The Credit Unions and Caisses Populaires Act.

Eligible deposits include general accounts such as savings, chequing and term deposits, trust deposits, joint deposits, RRSP deposits and RRIF deposits. In all cases deposits must be payable in Canada, in Canadian currency and must be repayable on demand or within five years.

CDIC coverage is extended to a maximum of $60,000.00, inclusive of interest, for each depositor. It is the responsibility of a depositor who is acting as a trustee for a beneficiary or beneficiaries to ensure that proper disclosure of the trusteeship is made on the records of the financial institution. Failure to make the required disclosure will result in CDIC aggregating other accounts held by the depositor in the depositor's name and limiting coverage on the aggregate total to $60,000.00.

Members who maintain pooled trust accounts in an institution insured by CDIC shall file an annual report for each such account with that institution, so that each client's funds, rather than the account itself, are insured up to the limit of CDIC insurance. The report shall identify each beneficiary and the amount or percentage of each beneficiary's beneficial interest as of April 30 each year. In order to protect solicitor client confidentiality, rather than disclosing the name and address of each beneficiary it is sufficient to disclose a separate alphanumeric code or other identifier in respect of each beneficiary, provided that the records maintained by the depositor contain an up-to-date list of the name and address of each beneficiary and particulars of the amount or percentage of each beneficial interest.

There is no prescribed form of report and members are encouraged to contact the financial institution to ensure that the information is provided in a manner appropriate to the record keeping system of the institution. Reports are to be updated annually by the depositor and submitted to the financial institution within 30 days of April 30th.

Members who maintain separate interest bearing accounts are also required, upon opening the accounts to disclose to the financial institution the name and address of the beneficiary of the account. The statement disclosing the existence of the trust deposit may be accomplished by completing the member institution's forms associated with the deposit instrument. Examples cited by CDIC include "John Doe in trust for Mary Smith" and "John Doe, trustee for Mary Smith". Although the CDIC Joint and Trust Account Disclosure By-law contemplates that a separate alphanumeric code or other identifier in respect of the beneficiary may be used provided that the records maintained by the depositor contain an up-to-date list of the name and address of the beneficiary, Rule 130(1)(a) of The Law Society Rules specifically requires that members who deposit funds in a specific trust investment account do so in the name of the member in trust for the person to whom the money belongs, with the name of the person to whom the money belongs disclosed on the deposit document. Members are therefore advised to ensure compliance with The Law Society Rules.

For further information members are referred to the provisions of the Canada Deposit Insurance Corporation Act R.S.C. 1985. C-3, the Schedule thereto and the CDIC Joint and Trust Account Disclosure By-law SOR/95-2 79.

(May, 2000)

Document Actions