Bank Act

Marginal note:Issuance

• 627.78 (1) An institution shall, before entering into an agreement with a person for the issuance of a deposit-type instrument, a principal-protected note or a prescribed product, disclose to the person

  • (a) the term of the product, how and when the principal is to be repaid and how and when the interest, if any, is to be paid;

  • (b) if the rate of interest in respect of the product is fixed, the annual rate of interest or, if the rate of interest is variable,

    • (i) how the rate of interest is determined,

    • (ii) the prime lending rate or the bankers’ acceptance rate, as the case may be, that is used for the calculation of the rate of interest,

    • (iii) the prime lending rate or the banker’s acceptance rate in effect when the information is disclosed, and

    • (iv) how the person may obtain the rate of interest from the institution during the investment period;

  • (c) any charges applicable to the product and their impact on the interest payable;

  • (d) how interest is accrued and any limitations in respect of the interest payable;

  • (e) any risks associated with the product, including, if applicable, the risk that no interest may accrue;

  • (f) if the product relates to a deposit that is not eligible for deposit insurance coverage by the Canada Deposit Insurance Corporation, the fact that it is not eligible;

  • (g) whether the person may cancel their purchase of the product and, if so, how the purchase may be cancelled;

  • (h) whether the proposed agreement provides that the institution may amend a term or condition with respect to the product and, if so, in what circumstances;

  • (i) whether the manner in which the product is structured or administered may place the institution in a conflict of interest;

  • (j) any other information that could reasonably be expected to affect the person’s decision to enter into the agreement; and

  • (k) any prescribed information.

• Marginal note:New instrument issued without further agreement

  (2) If, after the maturity of a deposit-type instrument issued under an agreement referred to in subsection (1), an institution issues a new deposit-type instrument under that agreement, the institution shall disclose prescribed information to the person without delay after the instrument is issued.