BNY Trust to Reduce Stated Capital

Summary#

BNY Trust Company of Canada says it plans to apply for permission to reduce the stated capital of its common shares by up to $26.5 million. The board passed the resolution on September 12, 2024, and the company will ask the Superintendent of Financial Institutions (Canada) for approval under the Trust and Loan Companies Act (Canada).

What it does#

• Proposes to reduce the stated capital account for the company’s common shares by up to $26.5 million.
• That reduced amount would be paid out to the company’s sole shareholder.
• The company will file an application with the Superintendent of Financial Institutions (Canada) seeking approval under the Trust and Loan Companies Act (Canada).
• The company’s Chief Financial Officer will choose the exact amount to reduce, up to the $26.5 million limit.
• Directors and officers are authorized to sign papers and take steps needed to carry out the plan.
• The notice says publication is not proof that the Superintendent will approve the reduction.

Who's affected#

• The immediate beneficiary is the sole shareholder of BNY Trust Company of Canada.
• The company itself will have a lower stated capital if the change is approved.
• The decision-maker is the Superintendent of Financial Institutions (Canada).
• The notice does not name the sole shareholder and does not say whether customers, creditors, or other stakeholders will be affected.

Why it matters#

• A reduction in stated capital means the company would return money to its shareholder rather than keeping it as capital on its books.
• That can matter to people who follow the company’s financial position or regulatory capital, because it changes how much capital is recorded for the company.
• Because the change needs regulatory approval, it is not final until the Superintendent of Financial Institutions (Canada) decides.