Protection of Assets (Banks) Regulations

Protection of Assets (Banks) Regulations

These Regulations may be cited as the Protection of Assets (Banks) Regulations. Interpretation2 In these Regulations,bondbond means a contract of insurance by which one party agrees to indemnify another party for loss arising out of the act of a third party; securitysecurity, in respect of a bank, means a negotiable security owned or held by the bank or held by the bank in trust, but does not include a security issued by the bank; security transactionsecurity transaction means a purchase, sale, redemption, exchange, transfer or assignment of, or other transaction in respect of, a security.

Application3 These Regulations do not apply to a bank(a) that is carrying on business in a jurisdiction in compliance with a law of that jurisdiction, to the extent that that law is inconsistent with these Regulations; or(b) to the extent that they are inconsistent with(i) a power conferred or a duty imposed on the bank in respect of the administration of an estate or trust, or(ii) the discharge of the bank’s responsibilities in acting as an agent.

Safeguarding of Assets4 A bank shall(a) maintain a record in writing of procedures to be followed in the handling and safeguarding of assets owned or held by the bank; and(b) inform every director, officer, employee and agent of the bank who has access to, or is involved in the handling and safeguarding of, assets owned or held by the bank of those procedures.

Safeguarding of Securities5 A bank shall maintain an up-to-date record that identifies every security. 6 (1) Subject to subsection (2) and section 7, a bank shall ensure that every security is kept securely, in a manner that prevents unauthorized access to the security, in the custody of(a) the bank; or(b) an entity that is authorized to act as a custodian of securities or as a depository or clearing agency for securities by a law of the jurisdiction in which the entity is carrying on business.(2) Subsection (1) does not apply in respect of a security that is(a) under the control of the government of a jurisdiction in which the bank is carrying on business;(b) pledged as collateral for the indebtedness or potential indebtedness of the bank;(c) loaned to a person pursuant to a written agreement; or(d) in transit. 7 A bank shall not place a security in the custody of an entity referred to in paragraph 6(1)(b) unless the bank has entered into a written custodial agreement with that entity.

8 A bank shall, on a daily basis, deposit any net amount received by the bank as a result of any security transaction in an account kept by the bank(a) in the bank;(b) with a financial institution that is authorized to accept deposits by a law of the jurisdiction where the financial institution is carrying on business;(c) with a trust company that is authorized to hold money in trust by a law of the jurisdiction where the trust company carries on business;(d) with the government of the jurisdiction in which the bank is carrying on business, or with an agency thereof that is authorized to act as a custodian of securities; or(e) with CDS Clearing and Depository Services Inc.SOR/94-77, s. 1 SOR/2010-285, s. 1

Registration of a Security9 (1) Subject to subsections (2) and (3), a bank shall ensure that every security is registered in the bank’s name in the register of the entity that issued the security.(2) Subsection (1) does not apply in respect of a security that(a) cannot be registered in the bank’s name for any reason that is beyond the control of that bank;(b) is under the control of the government of a jurisdiction in which the bank is carrying on business;(c) is held by the bank as collateral or for safekeeping;(d) is registered in the name of a nominee of the bank or of an entity referred to in paragraph 6(1)(b);(e) is held under a book entry certificateless or immobilization system; or(f) is held temporarily by an agent of the bank, a liquidator, a trustee or the issuer of the security for purposes of reorganization, amalgamation, liquidation or voting.