BNY Trust seeks stated capital reduction

Summary#

BNY Trust Company of Canada says it will ask the Superintendent of Financial Institutions (Canada) to approve a cut to the stated capital of its common shares by up to $26.5 million. The cut was authorized by the company’s sole shareholder in a special resolution on September 12, 2024.

What it does#

• Seeks approval under the Trust and Loan Companies Act (Canada) to reduce the stated capital account for the company’s common shares by up to $26.5 million.
• Says the reduced amount would be distributed to the company’s sole shareholder.
• Gives the company’s Chief Financial Officer authority to pick the exact amount to be reduced, up to the $26.5 million limit.
• Says the company will apply to the Superintendent of Financial Institutions (Canada) for formal approval.
• Notes that publishing this notice is not the same as getting approval.

Who's affected#

• BNY Trust Company of Canada (the company named in the notice).
• The company’s sole shareholder, who would receive the distribution if approval is granted.
• The Superintendent of Financial Institutions (Canada), who will decide whether to approve the change.
• It is unclear from the notice whether customers, creditors, or other counterparties will be affected. The notice does not explain any operational or contractual impacts.

Why it matters#

• If approved, up to $26.5 million would move out of the company’s stated capital and be paid to its sole shareholder. That is a material change to how the company’s capital is recorded.
• Regulatory approval is required before the change can happen, so this is not final yet.
• People with a financial interest in or business with the company may want to watch for the regulator’s decision. The notice was dated September 21, 2024 and published in the Canada Gazette on September 28, 2024.