My name is Margaret Tepczynska. I'm the director of strategic initiatives at the Department of Finance. With me is Eleanor Ryan, director general of the financial institutions division, and Mary O'Connor, special adviser.
Part 4, division 1, subdivision A proposes three technical amendments to the Bank Act in support of the budget 2019 announcement that legislative amendments would be proposed to modernize corporate governance for federally regulated financial institutions.
The first amendment relates to federal credit unions. Budget 2019 announced that legislative amendments would be proposed to provide members of federal credit unions with more options for voting, prior to and at annual general meetings, as well as improved means for participation in the voting process at the annual meetings. Provincial law gives provincial credit union members a wide variety of voting options. Provincial credit unions that have transitioned to the federal charter have asked for similar variety under the federal framework.
The proposed amendment will make it easier for members of federal credit unions to exercise their right to vote by adding more options—by phone, electronically or in person at a branch prior to the annual general meeting—in addition to the current way of voting at the meeting and by mail. This amendment was identified by federal credit unions as a means of enhancing their members' participation in the decision-making of federal credit unions.
The next set of amendments relates to the proxy regime under the Bank Act. They clarify the authorities for the form of proxy regulations and update existing language related to the solicitation of proxies to make it consistent with the Canada Business Corporations Act and in line with drafting conventions. The objective of the proxy-related provisions in the legislation is to ensure that companies provide shareholders with adequate information about their company so that shareholders can exercise their voting rights in an informed manner. To do so, the regulations set out the form of proxy, the proxy circular and the powers granted in the form to enable shareholders to appoint a proxy holder to act on their behalf and receive the necessary information.
The Standing Joint Committee for the Scrutiny of Regulations has highlighted the need to update existing out-of-date references in the form of proxy regulations. In response, and as a first step, a legislative amendment in the Bank Act is being proposed to broaden the authority for regulations that set out the proxy framework. Provisions that define solicitation and the rules surrounding soliciting a shareholder's proxy will be amended as well to clarify language and make bijural updates. These changes are consistent with the Canada Business Corporations Act's definition of solicitation and the modern drafting conventions.
The department conducted broad consultations in the context of the 2019 financial sector legislative review, as well as targeted consultations with industry on these amendments. The Canadian Credit Union Association and the federal credit unions requested that the Bank Act be amended to permit federal credit union members more voting options. The department has also had an ongoing dialogue with the Standing Joint Committee for the Scrutiny of Regulations in regard to updating the proxy framework for banks and bank holding companies. In February 2019, departmental officials appeared before the committee to present a planned approach to update the Bank Act and then the form of proxy regulations. The committee was supportive of the proposed approach and requested a timely implementation.
This concludes my overview of the provisions. We are able to answer any questions you may have. Thank you.
