Diversity Disclosure for Trust and Loan Companies

Summary#

The government published the proposed Diversity Information Disclosure (Trust and Loan Companies) Regulations on February 15, 2025. They would require federally regulated, publicly traded trust and loan companies to report standard diversity information about their boards and senior management. This is a proposal, not law, and comments are invited for 30 days (deadline March 17, 2025).

What it does#

• Applies to distributing trust and loan companies under the Trust and Loan Companies Act (that is, FRFIs that issue securities to the public).
• Requires directors to make diversity information available at the same time as the notice of the annual meeting.
• Asks companies to report, for each designated group, whether they have:
  • adopted term limits or other board renewal mechanisms, and a description or explanation if not;
  • a written policy for identifying and nominating candidates from the designated groups, and if so a short summary, implementation measures, progress, and how effectiveness is measured;
  • considered the level of representation of designated groups when nominating directors and appointing senior managers, or reasons why not;
  • targets (numbers, percentages, or ranges) for representation on the board and in senior management, and annual and cumulative progress, or reasons for no target.
• Requires a table showing the number and percentage of people from each designated group on the board and in senior management. The table must report First Nations, Inuit and Métis separately.
• Defines “members of senior management” to include the chair, vice-chair, president, chief executive officer, chief financial officer, vice-presidents in charge of main business units, and any officer who reports directly to the board, CEO or COO.
• Requires reporting for major subsidiaries that account for 30% or more of consolidated assets or revenue.
• Enforcement and oversight would be handled by the Office of the Superintendent of Financial Institutions (OSFI).
• The rule follows a “comply or explain” style: companies either disclose policies/targets or explain why they do not have them.
• The regulations would come into force when Division 40 of Part 4 of the Budget Implementation Act, 2024, No. 1 comes into force (or on registration if later).

Who's affected#

• Directly: an estimated 16 distributing federally regulated trust and loan companies (FRFIs).
• Indirectly: shareholders and investors in those companies, who would receive more standardized diversity information.
• Also affected: major subsidiaries of those companies that meet the 30% asset/revenue threshold, and regulators such as the Department of Finance and OSFI.
• Note: some stakeholders raised concerns or asked for changes — for example, Indigenous groups asked for disaggregated reporting (which is included), while some industry groups wanted the rules limited to parent entities or to have more flexibility in disclosure. Privacy and self-identification issues were also raised.

Why it matters#

• Investors would get consistent, comparable information about who sits on boards and in senior management. That can shape voting and engagement decisions.
• The regulations aim to increase transparency and, over time, encourage more diverse boards and leadership in the financial sector.
• Expected compliance costs are small: an estimated present value cost of $56,905 for all affected institutions from 2025 to 2034, or $8,102 on an annualized basis.
• The rules require separate reporting for First Nations, Inuit, and Métis, which helps show where representation is low and where improvement is needed.
• This is a proposal. People and organizations can comment before the deadline (March 17, 2025).