New changes to particularly impact 'professional trustees'
The Law Society of Ontario has announced recent changes to the rules governing deposit insurance protection for funds held in trust under the Canada Deposit Insurance Corporation Act.
The new changes, taking effect on April 30, will particularly impact “professional trustees” or trustees holding deposits in trust for clients in a professional capacity. A professional trustee includes a lawyer or partnership of lawyers, a law corporation, or a notary or partnership of notaries in Quebec.
Under the new changes, the Canada Deposit Insurance Corporation (CDIC) will authorize eligible professional trustees to designate certain accounts as professional trustee accounts (PTAs). With this, they will no longer provide beneficiary information to CDIC member institutions for these accounts regularly unless CDIC requests them to do so.
To designate accounts as PTAs, a professional trustee must attest to member institutions holding their accounts that they are a certified professional trustee and provide their contact information. They should then retain records of each beneficiary’s key contact information and interest in the PTA, the type of arrangement for each PTA and names and addresses of persons for whose benefit the arrangement is held.
To ensure that accounts remain designated as PTAs, they must re-attest their professional trustee status annually. Failure to do so will result in accounts losing their PTA designation.
Despite the new changes, the CDIC continues to insure eligible deposits in trust to a maximum of $100,000 per beneficiary.
