Canada's Minister of Finance has announced that the
scheduled 5-year review of federal financial institutions
legislation has commenced and has called for comments from
interested parties to be submitted by Friday, November 19, 2010.
The Minister has signalled that "some fine-tuning to the
system may be required, but wholesale change is not
Given the current spotlight on the global financial regulatory
system, including recent headlines regarding capital requirements
and the implementation of new accounting rules, we expect that
federally regulated financial institutions carrying on business in
Canada will be interested in participating in the
"fine-tuning" of the legislation governing Canadian
The Department of Finance has not yet published specific topics
for comment and, unlike federal financial institution reform
processes in the recent past, there is no expectation that initial
consultations will result in a "green" or
"white" paper from the Department of Finance or that
individual submissions will be available for inspection by the
The last legislative review was completed in the Spring of 2007.
At that time, several key areas of reform were identified. We
expect that certain of these areas might merit further
consideration in this round of reforms. For example:
Enhancing Consumer Protection
Regulations have been promulgated in an effort to enhance consumer
protection. Changes included widening the scope of the disclosure
regime for financial products and enhancing requirements around the
cost of borrowing, capitalization and credit business practices.
What are your views on the scope of financial products affected
by the regulations and the manner in which disclosure must be
Increasing Legislative and Regulatory Efficiency
Changes have been made to the approval regime in order to
streamline regulatory approvals affecting Canadian and foreign
financial institutions. Should the government be considering
any additional refinements to ease the regulatory burden associated
with carrying on business as a financial institution in
Future federal credit unions will be regulated under the Bank Act.
Do you have any comments regarding the application of the Bank
Act to federal credit unions?
Insurance legislation was updated to clarify the application of
Part XIII of the Insurance Companies Act (foreign insurance
companies insuring in Canada risks). Do you have any comments
in connection with the implementation of these changes?
Adapting the Framework to New Developments
The last review of federal financial institutions legislation took
place in an economic context that is different from the context we
face today – access to credit is an obvious example.
Are there any policy initiatives that you think should be
undertaken based on the current economic context? For example, do
you have any views on the potential merits of allowing banks and
other federally regulated financial institutions to offer financial
leasing for vehicles and household property?1
We Can Help You Participate Effectively in the Consultation
BLG has considerable experience in assisting clients to make
submissions to governments in respect of financial services
legislation and regulations, including helping clients to develop
and implement strategies to advance their public policy issues with
governments. To that end, we would be pleased to assist clients in
the upcoming federal reform process.
The British Columbia Court of Appeal has recently considered whether the doctrine of unconscionability can be invoked to set aside a contractual clause providing for the payment by one party to the other...
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