BNY Trust to Reduce Stated Capital

Summary#

BNY Trust Company of Canada says it will apply to the Superintendent of Financial Institutions (Canada) to reduce the stated capital on its common shares. The company’s sole shareholder approved a plan on September 12, 2024 to allow a reduction of up to $26.5 million; the company filed the notice on September 21, 2024.

What it does#

• Authorizes a reduction of the stated capital account for the company’s common shares by up to $26.5 million.
• The reduced amount would be distributed to the company’s sole shareholder.
• The company will ask the Superintendent of Financial Institutions (Canada) for approval under section 78 of the Trust and Loan Companies Act (Canada).
• The company’s Chief Financial Officer will pick the final amount to be reduced, up to the $26.5 million limit.
• The notice warns that publication does not mean approval has been granted.

Who's affected#

• BNY Trust Company of Canada (the company making the change).
• The company’s sole shareholder (who would receive the distributed funds).
• Superintendent of Financial Institutions (Canada), who must approve the reduction.
• It is unclear from the notice whether customers, creditors, or other stakeholders would be directly affected.

Why it matters#

• If approved, the company would return up to $26.5 million from its stated capital to its sole shareholder, changing its capital structure.
• This is primarily a financial transaction between the company and its shareholder, but the regulator’s approval is required first.
• For most people, the change is unlikely to have a direct effect unless they are a stakeholder in the company or are watching regulatory decisions about bank and trust-company capital.