Updated Bank Proxy Rules

Summary#

This is a proposal to replace the existing Form of Proxy (Banks and Bank Holding Companies) Regulations with updated rules that bring federal proxy rules for banks into line with provincial securities rules. The changes mainly update references to the Canada Business Corporations Regulations, 2001 (CBCR) and incorporate National Instrument 51-102 (NI 51-102) standards; there is a public comment period of 30 days after publication (May 6, 2023).

What it does#

• Replaces the current proxy regulations with the proposed Form of Proxy (Banks and Bank Holding Companies) Regulations, 2023.
• Makes proxy forms and circulars follow the format and disclosure rules in National Instrument 51-102 and Form NI 51-102F5, where applicable.
• Keeps some federal-only items that the provincial rules don’t require, for example:
  • disclosure about indemnities and liability insurance;
  • the percentage of votes needed to approve a matter;
  • a signed statement by management (and a signed statement by a dissident for dissident circulars).
• Removes a few older requirements for dissident circulars, such as some contract and partnership detail requirements.
• Says that certain items in Form NI 51-102F5 (Items 8, 9, and 10 on executive compensation and indebtedness) will not apply to:
  • banks that are not distributing banks but have more than 50 shareholders, and
  • bank holding companies (as specified).
• Clarifies what is not considered a “solicitation,” including:
  • public speeches or press releases and other public media statements;
  • communications from a shareholder to other shareholders that do not include a form of proxy;
  • proxy-voting advice given by professionals to their clients, subject to disclosure rules about conflicts and fees;
  • communications by a person who is not trying to be appointed proxy.
• Most of the proposed Regulations would come into force on registration. The parts that change the legal definition of “solicitation” (notably sections 4 and 5 in the proposal) would come into force only when a related provision in an earlier federal Act amendment comes into force.

Who's affected#

• Banks that are reporting issuers under provincial securities law (known as distributing banks).
• Banks that are not reporting issuers but have more than 50 shareholders (non-distributing banks with many shareholders).
• Bank holding companies covered by the rules.
• Shareholders, shareholder groups, and “dissidents” who solicit proxies or send proxy materials.
• Regulators and industry bodies that handle bank governance and disclosure, including the federal regulator Office of the Superintendent of Financial Institutions (OSFI) and provincial securities regulators coordinated through the Canadian Securities Administrators (CSA).

Why it matters#

• It reduces confusion by aligning federal proxy rules for banks with the provincial securities rules many banks already follow.
• Banks that already follow NI 51-102 should see little or no extra cost. Banks that do not may need small, technical updates to their proxy materials.
• Shareholders should get clearer and more consistent proxy materials across federal and provincial systems.
• The clarifications about what does — and does not — count as a solicitation make it easier to know when a communication triggers formal proxy rules.
• This is a proposal, not final law; stakeholders were invited to comment for 30 days after publication (May 6, 2023).