Directive No. 5R5

Estate Funds and Banking

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Directive No. 5R5

894 KB, 41 pages

Date: May 9, 2016

The Office of the Superintendent of Bankruptcy (OSB) has amended Directive No. 5R4, Estate Funds and Banking. The objectives of the amendments are to facilitate the adoption and use of electronic financial transactions, to streamline administrative procedures for trust account reconciliations and to update and clarify directive requirements through administrative amendments. The amendments to the Directive were informed by public consultation in 2015, as well as technical consultations with Licensed Insolvency Trustees.

Key Changes to the Directive are:

Provisions for the Establishment of a Trust Transfer Account

Debit Machines and Electronic Payments

To facilitate electronic transactions, Licensed Insolvency Trustees may now use a trust transfer account to receive electronic payments from debtors and the OSB, and receive payments for estate files using a debit machine within their offices.

Single Destination Account and Electronic Payments from the OSB

In preparation for the implementation of the Government of Canada's Direct Deposit Initiative, which will provide for electronic receipt of payment from the government, Licensed Insolvency Trustees are required, upon request from the OSB, to use no more than one destination account for payments to be received from the OSB. Where payments consist of trust money, this single destination account shall be a trust transfer account.

Monthly Trust Account Reconciliations

Trustees now have the option to sign a single consolidated monthly trust account reconciliation rather than signing an attestation for each trust account.

Estate Filing Fees

For greater clarity and to codify existing practice, the Directive now confirms that estate filing fees may be paid from either an estate trust account or the trustee's corporate account.

Administrative Amendments

The following administrative amendments have been made:

  • Specific OSB contact titles have been updated: "Designated Senior Bankruptcy Analyst" with "OSB" and "Designated Assistant Superintendent" with "Superintendent." All administrative notifications, requests or other documents are to continue to be directed to the local OSB division office, as per current practice.
  • Reporting requirements on pre-filing deposits and third-party deposits and guarantees have been removed from the Annual Banking Report (Schedule 2 of the Directive) as these are not considered estate funds until they are used for estate purposes.
  • Existing wording was amended to clarify how remittance information is to be sent in respect of electronic payments.
  • Some French terms were harmonized to be consistent with the terminology used in the Bankruptcy and Insolvency Act and other Directives: "syndic individuel" was replaced with "syndic particulier" and "syndic corporatif" with "personne morale agissant en qualité de syndic".
  • Section reference errors were identified and corrected throughout the Directive. 

It is our understanding that software providers will be updating their systems to reflect amendments made to the Schedules attached to the Directive within six months. Current versions may be used until software changes are implemented.

Coming into Force

This Directive comes into force on the date that it is issued.

Enquiries

If you require further information, please do not hesitate to contact the OSB office nearest you.

William R. James
Superintendent of Bankruptcy


Issued: May 9, 2016

(Supersedes Directive No. 5R4 issued on , on the same topic)

This Directive applies to individual and corporate trustees licensed pursuant to section 13 of the Bankruptcy and Insolvency Act (the "Act") and to administrators of consumer proposals as defined in section 66.11 of the Act. For ease of reading, the term "trustee" in this Directive is to be read as including an administrator.

Interpretation

  1. (1) In this Directive,
    • "Act" means the Bankruptcy and Insolvency Act;
    • "bank" means a bank as defined in section 2 of the Act;
    • "consolidated trust account" means a bank account operated pursuant to paragraph 155(g) or subsection 66.26(2) of the Act;
    • "control ledger" means a record maintained by the trustee that reports the balance of funds held in an estate trust account. In the case of a consolidated account, such record will show the control ledger balance as the sum of all sub-ledger balances;
    • "electronic payment" means the payment of dividends or disbursements from an estate trust fund to another party by means of an approved system as described in paragraph 17 of this Directive;
    • "estate" means a bankruptcy, a proposal filed under Division I or Division II of Part III of the Act, a notice of intention, or an interim receivership under section 46 or section 47.1 of the Act;
    • "estate trust funds" means funds received by a trustee that belong to an estate, including any moneys advanced in payment of fees for services not yet rendered or money advanced in payment of disbursements to be made that are not subject to a third-party agreement;
    • "OSB" means the Office of the Superintendent of Bankruptcy;
    • "Rules" means the Bankruptcy and Insolvency General Rules made pursuant to subsection 209(1) of the Act;
    • "sub-ledger balance" means the balance of funds for each estate that comprises a consolidated bank account;
    • "Superintendent" means the Superintendent of Bankruptcy or such persons as he may assign or direct;
    • "transaction posting report" means an accounting record maintained by the trustee showing all banking transactions (credits and debits) posted to an estate account during a specific time period, and the account balance;
    • "trust account" means an account with a bank into which estate funds are deposited and held in trust by a trustee; and
    • "trust transfer account" means an account with a bank into which estate funds are temporarily deposited and held in trust by a trustee for the purpose of being transferred without delay into the appropriate estate trust account or consolidated trust account.

    (2) The coming into force date for that part of the definition of "estate" in paragraph 1(1) that refers to a "proposal filed under Division I" and a "notice of intention" shall be held in abeyance until further notice.

Purpose

  1. This Directive, issued pursuant to paragraphs 5(4)(b) and (c) of the Act, imposes upon a trustee the minimum standards for the accounting for and the proper custody of estate trust funds. The main applicable sections of the Act are subsections 6(2), (3) and (4), sections 25, 26, 27 and 66.26, paragraphs 155(g) and 14.01(1)(f), and sections 65, 67, 101, 103, 128 and 129 of the Rules.

Sending of Documents

  1. Pursuant to section 2.2 of the Act, any notification, documents or other information that is required by this Directive to be given, forwarded, mailed or sent or otherwise provided to the Superintendent (or the OSB) shall be given, forwarded, sent or otherwise provided to the Superintendent (or the OSB) at the local OSB division office.

Principles

  1. Section 25 of the Act imposes a duty on a trustee to deposit without delay in a trust account all moneys received for an estate. The trust account shall be held at a bank, provided that federal or provincial law guarantees deposits of that institution, and that such law protects depositors from the loss of money on deposits with that institution.Footnote 1

    Subsection 25(1.3) of the Act also dictates that, except for paying dividends and charges incidental to administering the estate, a trustee shall not withdraw any funds from the trust account of an estate without the permission, in writing, of the inspectors or, on application, the Court.

    When withdrawing funds from the trust account of an estate, the trustee must comply with the rules governing fees and disbursements drawn in summary administration bankruptcies and consumer proposals.

    Trust account funds are to be kept intact and not commingled with non-estate funds and in the case of consolidated trust accounts, not commingled with estates of administration types other than that type for which the account was approved.

Banking and Accounting Records

  1. (1) A trustee has a fiduciary relationship with an estate under his or her administration. As such, a trustee has a duty to control and account for the funds under his or her administration in accordance with the Act.

    (2) For each estate trust account under a trustee's administration, the trustee shall maintain, at a minimum, up-to-date books and records, including the control ledger, of estate funds showing:

    (a) all receipts and disbursements of estate trust funds, including the name of the payer or payee, the date, the nature of the payment and the amount;

    (b) duplicate deposit slips, duplicate receipts for cash deposits, cancelled cheques, bank statements, passbooks, and all other documents of deposit; and

    (c) for consolidated trust accounts, a calculation of the balance within the consolidated account, which we refer to as the control ledger, produced on the same day as the bank statement.

    (3) Every month, within forty-five (45) days of the bank statement date, the trustee shall reconcile all trust accounts.

    (4) The trustee approving the bank reconciliation shall sign and date:

    (a) the bank reconciliation for each consolidated trust account; and

    (b) either,

    (i) the bank reconciliation for each estate trust account; or

    (ii) a single attestation, as set out in Schedule 4 of this Directive providing, at a minimum, the estate name, estate number and account number of each reconciled estate trust account, and stating that the trustee has reviewed and verified the reconciliation for all listed accounts and that he or she accepts full accountability.

    (5) The trustee shall advise the OSB, in writing, of all outstanding errors that have not been corrected within seventy-five (75) days of the bank statement date.

    (6) Each monthly trust account reconciliation must be supported by:

    (a) an original detailed monthly bank statement for each trust account, supported by cancelled cheques and deposit receipts;

    (b) the trustee's transaction posting report for the month;

    (c) a complete listing of all outstanding cheques, including the cheque number, payee, amount and date of issue, an explanation regarding any cheques outstanding for longer than six (6) months and a complete listing of outstanding deposits;

    (d) a complete and detailed listing of all other reconciling items; and

    (e) the name and signature of the individual preparing the bank reconciliation.

    (7) In addition to the supporting evidence listed in paragraphs 5(6)(a) to (e) of this Directive, reconciliation of all consolidated trust accounts must include the control ledger, which in turn is comprised of a listing of the component sub-ledger balances. Outstanding cheques or deposits that are reconciling items in a consolidated account must be identified by sub-ledger to ensure sub-ledger balances are accurate.

    (8) The monthly trust account reconciliation must be accompanied by a report of any estate trust funds invested pursuant to paragraph 7(2) of this Directive. The report will indicate the trust account to which the investment belongs and the monetary value of the investment.

Electronic Banking and Accounting Records

  1. (1) A trustee may keep banking and accounting records in electronic media format subject to paragraph 6(2) of this Directive.

    Computer Records for Books of Original Entry

    (2) A trustee who maintains banking and accounting records for trust accounts in an electronic format shall ensure that the system used:

    (a) is capable of producing on demand a hard copy of the records of original entry at any given date;

    (b) shows, at a minimum, details required by paragraph 5(6) of this Directive; and

    (c) provides a complete audit trail of transactions.

    (3) The period of retention for electronic banking and accounting records shall be the same as required for "hard copy" records.

    Computer Bank Reconciliation

    (4) A trustee who keeps trust records in an electronic format shall produce and keep a printed copy of the bank reconciliations referred to in paragraphs 5(2), (4), (6) and (7) of this Directive.

    Back up Copy

    (5) A trustee who keeps trust records in an electronic format shall maintain a backup copy of the electronic records that shall be updated each business day, and stored in a secure manner at an off-site location on a weekly basis.

Handling Estate Trust Money

  1. (1) A trustee shall:

    (a) protect estate trust funds from loss, misappropriation or defalcation by establishing adequate security arrangements and internal controls;

    (b) immediately advise the OSB, in writing, of any defalcation or misappropriation of estate trust funds;

    (c) deposit estate funds without undue delay in a bank, in a trust account in the name of the estate or that of the trustee in the trustee's capacity as trustee of the estate (for example, the estate of John Doe or Joan Smith, trustee to the estate of John Doe);

    (d) periodically review and evaluate the internal control system to ensure that it functions adequately with the appropriate safeguards;

    (e) ensure that all cheques issued from a trust account are consecutively numbered or, in the case of electronic payments, use consecutive trace numbers;

    (f) ensure that cheques drawn on a trust account are not made payable to “cash,” “bearer” or other such non-specific recipient;

    (g) ensure that all cheques drawn on a trust account are signed by at least one authorized trustee;

    (h) not pay any of his or her personal or general office expenses from a trust account;

    (i) make reasonable efforts to obtain a competitive rate of interest on all trust accounts;

    (j) ensure that all interest earned on summary administration estate funds, whether held in a trust account or other investment certificate referred to in paragraph 7(2) of this Directive, which has not been offset by reasonable bank service charges, forms part of the assets of the estate, and is allocated monthly;

    (k) not permit an estate trust account to be overdrawn, and immediately correct any transactions that inadvertently place the account into an overdraft position;

    (l) disclose on the statement of receipts and disbursements the total amount of interest earned for each estate;

    (m) in the event that the trustee's general account is charged a transaction fee by the bank for a non-sufficient fund cheque, be permitted to recover this transaction fee from the person responsible and deposit it to the estate trust account, in which circumstance the trustee is permitted to reimburse the general account from the consolidated bank account for the amount of the transaction fee;

    (n) inform the OSB promptly of any change to the type of banking or accounting system used for trust accounts;

    (o) inform the OSB, within five (5) business days, of any change in the name and address of a bank where estate trust funds are held;

    (p) be permitted to offset reasonable bank fees (other than non-sufficient fund charges) against interest earned by a summary administration or a Division II Proposal trust account, provided the amounts are clearly disclosed on the monthly bank reconciliation, and be permitted to offset bank fees related to investment certificates against interest earned on those certificates, provided this is also clearly disclosed;

    (q) not be permitted to offset bank fees described in paragraph 7(1)(p) of this Directive beyond the generated interest.

    (2) A trustee may invest estate moneys in appropriate investment certificates where such funds are not immediately needed for distribution of dividends to creditors, or for the day-to-day administration of the estate. Such investment certificates must be guaranteed against losses and should not be used in cases where service charges and related costs exceed the interest that would accrue had the funds remained in an estate trust account. Investment certificates are to be held at the same branch of the financial institution where the related trust account is held and must bear the name of the trust account to which they belong.

    (3) Pre-filing deposits from debtors are not considered to be estate trust funds until a bankruptcy has been accepted or a proposal or notice of intention has been filed. Such deposits are to be held separately by the trustee in a trust account, clearly identified for that purpose only or in a separate trust account containing the aggregate of all these funds held, provided the accounting records in respect of the account fully document deposits and withdrawals. Such deposits are not to be held in a consolidated estate trust account or individual estate trust account until a proceeding under the Act has been registered.

    (4) The coming into force date for that part of paragraph 7(3) of this Directive that alludes to a "proposal filed under Division I" and a "notice of intention" shall be held in abeyance until further notice.

    (5) (a) Filing fees may be paid either from an estate trust account or from the trustee's corporate account, provided that all accounting records fully document deposits and withdrawals (i.e., all filing fees, whether drawn from an estate trust account or from the trustee's corporate account, are to be included in the Statement of Receipts and Disbursements).

      (b) Where filing fees are paid from the trustee's corporate account and once funds are available in the estate trust account, the trustee shall reimburse the corporate account from the estate trust account for the filing fees paid.

    Electronic Banking

    (6) (a) A trustee may move funds (such as fees) electronically from an estate trust account to another of the trustee's accounts (such as a general account).Footnote 2

      (b) No transfer of funds as described in paragraph 6(a) shall be permitted unless the electronic transfer system used by the trustee produces a confirmation from the financial institution that shall contain:

    (i) the number of the trust account from which the money is drawn;

    (ii) the name, branch and address of the financial institution from which the money is drawn;

    (iii) the number of the account to which the money is transferred;

    (iv) the name, branch and address of the financial institution to which the money is transferred; and

    (v) the time, date and details of the transfer.

Consolidated Trust Account

  1. (1) An individual trustee may, with the approval of the Superintendent, operate only one consolidated trust account for summary administrations, pursuant to paragraph 155(g) of the Act, and only one consolidated trust account for consumer proposals, pursuant to subsection 66.26(2) of the Act, provided that the trustee:

    (a) submits a request in writing with the information required in paragraph 9 of this Directive and obtains prior written approval of the Superintendent; and

    (b) maintains in good order a bank account and accounting system providing for, and disclosing, equitable monthly distribution to each of the individual estate accounts of all the interest earned by the consolidated trust account.

    (2) Consolidated trust accounts are to be used exclusively for their intended purpose. Sub-accounts or separate accounts, including clearing accounts, dividend accounts, expense accounts, etc., are not permitted.

    (3) Where the trustee does not comply with the requirements of this Directive, the Superintendent may revoke approval to operate a consolidated trust account.

    (4) A trustee may reapply to the Superintendent for approval to operate a consolidated trust account after a revocation under paragraph 8(3) of this Directive has occurred.

Operating a Consolidated Trust Account

  1. (1) An individual trustee shall submit the following along with the written request to the Superintendent to operate a consolidated trust account:

    (a) a complete description of the accounting and banking systems and procedures, whether manual or electronic;

    (b) a complete description of the backup procedures, manual or electronic, to allow for the recovery of accounting records in the event of destruction of same;

    (c) the name and address of the branch of the bank where the consolidated trust account will operate;

    (d) a description of the type of bank accounts to be operated;

    (e) a copy of the current banking agreement;

    (f) a description of the method by which the bank calculates the rate of interest payable on a consolidated trust account;

    (g) a description of the method by which interest is to be calculated and attributed monthly to individual estate accounts; and

    (h) the details of bank charges applicable to the consolidated trust account and the method by which said charges will be disposed of.

    (2) A trustee shall keep a copy of the original approval for a consolidated account and copies of any subsequent revisions or approvals.

Corporate Trustee

  1. (1) For corporate trustees, paragraphs 8 and 9 of this Directive shall apply to each individual trustee, except in those cases where a corporate trustee operates a consolidated account as described in paragraph 10(2) of this Directive.

    (2) A corporate trustee may, upon written request and with the written permission of the Superintendent, operate one consolidated bank account for summary estates, and/or one consolidated bank account for consumer proposals, for all or some of its trustees. In any such arrangement, however, individual trustees will be linked to the said account as being responsible for specific estates contained therein. A named trustee will be designated by the corporate trustee as the principal contact for the purposes of banking questions. This in no way relieves a corporate trustee of its responsibilities.

    (3) Where a corporate trustee operates an approved consolidated account as described in paragraph 10(2) of this Directive, paragraphs 8, 9 and 11 of this Directive apply to the corporate trustee.

    (4) For greater clarity, an individual trustee who is linked to a multi-user corporate account as described in paragraph 10(2) of this Directive shall not be permitted to also operate consolidated accounts pursuant to paragraph 8(1) of this Directive.

Annual Banking Report

  1. (1) A trustee must complete and deliver to the OSB on or before May 31 of each year a report that shall contain:

    (a) for the benefit of each bank holding trust accounts as at April 30 of that year, a signed request for a bank confirmation as set out in Schedule 1 of this Directive;

    (b) a master control list of all trust accounts open as at April 30 of that year showing the account number, the name and address of the banking institution, the name and the Superintendent's estate number of each estate, and balances on deposit as at April 30; and

    (c) the information required pursuant to paragraph 11(1)(b) of this Directive presented in conformity with the form found in Schedule 2 of this Directive.

    (2) A trustee shall include, along with the first annual banking report submitted pursuant to this Directive, a description of the software programs (either commercially available or proprietary) used to administer estate trust funds. Thereafter, the trustee shall promptly inform the OSB of any changes to the type of software used for this purpose as required by paragraph 7(1)(n) of this Directive.

Maintaining a Trust Transfer Account

  1. (1) Notwithstanding paragraph 7(1)(c) of this Directive, certain circumstances may arise where a trustee must use a trust transfer account to temporarily hold trust funds. These circumstances may include, but are not limited to:

    (a) where a trustee has an establishment in a town that does not have a branch of his or her bank;

    (b) where a trustee uses a debit machine to receive payments from debtors; or,

    (c) where a trustee receives electronic payments from debtors or the OSB.

    (2) A trustee may operate a trust transfer account subject to the following:

    (a) The costs of operating debit machines and bank fees associated with the trust transfer account are not borne by the debtor and do not come out of the trust transfer account, the estate trust accounts or the consolidated trust accounts;

    (b) No interest is to be earned on the trust transfer account;

    (c) All funds are transferred without delay from the trust transfer account to the appropriate estate trust account or the consolidated trust account;

    (d) No payments shall be drawn on the trust transfer account;

    (e) Trust transfer account funds are not commingled with non-estate funds and are not used for any other purpose;

    (f) The trustee shall keep a complete audit trail of all the deposits received into the trust transfer account; and

    (g) The OSB shall be granted the necessary access to all information relating to the trust transfer account, including the audit trail.

    (3) Upon request from the OSB, an individual trustee or a corporate trustee shall identify no more than one destination account for payments to be received from the OSB. Where payments consist of trust money, this single destination account shall be a trust transfer account or, should the trustee operate only one consolidated trust account and no other estate trust account, a consolidated trust account.

    (4) Trust transfer accounts are subject to the same record retention and reconciliation process as consolidated trust accounts as provided for in paragraphs 5(2) to (6) of this Directive.

Undistributed Interest

  1. (1) Any amount of monthly interest earned on a consolidated trust account that is too small to be rateably apportioned to the individual estates may be carried forward to the following month, where it will form part of the next month's interest allocation. Such amounts of unallocatable interest shall be clearly identified on the monthly reconciliation.

    (2) Any amount of interest earned on a non-consolidated trust account that cannot be allocated to that account shall be remitted to the Superintendent as undistributed funds as provided for in Directive No. 18, Unclaimed Dividends and Undistributed Funds.

Deposit Insurance

  1. A trustee shall take necessary steps to ensure that estate funds are insured under the Canada Deposit Insurance Corporation Act or equivalent provincial deposit insurance legislation.

Change of Status of Estate from Summary to Ordinary Administration

  1. Where an estate is converted from a summary to an ordinary administration and the estate funds therein were previously held in a consolidated trust account, a trustee shall immediately open a separate trust account into which he or she shall transfer all of the estate funds.

Foreign Moneys

  1. Subject to subsection 25(1.2) of the Act, the provisions of this Directive also apply to moneys in foreign countries, with such modifications as the circumstances require.

Electronic Payments and Related Records

  1. (1) A trustee may make application, in writing, for approval to make payments electronically from a trust account rather than by signed printed cheque. Such application shall:

    (a) be made to the Superintendent;

    (b) include an acknowledgement of the Superintendent's power to receive bank confirmations or other pertinent bank information regarding electronic transactions upon request;

    (c) describe, to a degree of detail acceptable to the OSB, how the proposed electronic payment system and internal controls meet or exceed the requirements specified in this Directive; and

    (d) include a contingency plan outlining how the trustee will deal with payment system service interruptions or malfunctions so as to continue to make required payments and maintain proper books and records.

    (2) (a) Where the Superintendent approves a trustee's application to utilize electronic payments, that approval shall be in writing.

      (b) Where the trustee does not comply with the requirements of this Directive, the Superintendent may revoke approval to utilize an electronic payment system.

    (3) The trustee is well advised to retain on file a copy of the application referred to in paragraph 17(1) of this Directive and the written approval referred to in paragraph 17(2) of this Directive while the electronic payment system is being used.

    (4) For the purposes of making electronic payments, a trustee must utilize the services of a bank as defined under section 2 of the Act.

    (5) An acceptable electronic payment system shall, as a minimum:

    (a) provide remittance information sufficient to allow the creditor/recipient to reconcile this information with the payment. The remittance information must include the estate name and estate number to which the payment relates, the account number from which the payment was drawn and a description of the nature of the payment;

    (b) simultaneously transmit the payment information and the remittance information from the trustee to the bank, with the bank confirming payment details directly to the creditor/recipient. The payment system may send the remittance details by email, facsimile or other electronic format;

    (c) use consecutively numbered payment trace numbers as generated by the trustee's accounting system to clearly identify each payment as to amount, payee, estate name and number, date of payment and nature of payment (i.e., dividend, other type of disbursement);

    (d) provide for secure transmission of payment and remittance information;

    (e) satisfy the requirements set out in paragraph 5(2) of this Directive relating to proper books and records, with such allowances for electronic equivalents of paper-based records as are reasonable;

    (f) ensure that the account reconciliation requirements set out in paragraphs 5(4), (6) and (7) of this Directive can be satisfied;

    (g) ensure that requirements for handling trust moneys as set out in paragraph 7(1) of this Directive can be satisfied. In particular, trustees must indicate how they intend to ensure that payments made via the electronic payment system can only be approved by a licensed trustee in accordance with the requirements of paragraph 7(d) of Directive No. 4R, Delegation of Tasks;

    (h) not compromise the trustee's ability to comply with any other requirement of the Act, Rules or directives;

    (i) not permit the alteration of information relating to statements or reports of transactions (i.e., not permit banking records to be overwritten);

    (j) allow printing of electronic statements or reports regarding payment transactions;

    (k) provide the trustee with prompt notification of unsuccessfully completed electronic payments;

    (l) use unique identifiers for each individual with access to the electronic payment system; and

    (m) keep records showing which trustee(s) initiated each electronic payment.

    (6) Where the trustee receives notification of an unsuccessfully completed electronic payment, measures shall be taken within five (5) business days to deal with the problem.

    (7) The trustee shall obtain the consent of a creditor/recipient to receive payments electronically;

    (a) such consent shall be provided to the trustee in the form set out in Schedule 3 of this Directive;

    (b) the trustee shall keep all consent documents in a separate file designated for this purpose for the period of time prescribed by the Rules for retention of estate documents or for the duration of the consent period, whichever is longer;

    (c) the trustee shall take steps to ensure that consent documents are kept in a safe and secure manner; and

    (d) a creditor may revoke consent to receive electronic payments by sending written notification to the trustee.

Coming into Force

  1. This Directive comes into force on the date that it is issued.

Enquiries

  1. For any questions pertaining to this Directive, please contact your local OSB office.

William R. James
Superintendent of Bankruptcy


Schedule 1—Annual Banking Report
Request for Bank Confirmation

Part 1–Acknowledgement:

To be completed by trustee

I, the undersigned, do hereby submit this request in accordance with the Superintendent of Bankruptcy's Directive No. 5R5, Estate Funds and Banking. Paragraph 11(1)(a) of that Directive requires that trustees annually complete and deliver such a request to the Office of the Superintendent of Bankruptcy (OSB) for each bank branch holding trust accounts administered by the trustee as at April 30 of that year.

I understand that a representative of the Superintendent of Bankruptcy may present this request to the bank at any time during the year where it is determined that a bank confirmation is required. Costs associated with processing such a request are to be borne by the undersigned.

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Trustee (Legal name)
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Signature of Trustee (Authorized Signing Officer)
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Date: mm/dd/yyyy

Part 2 – Financial Institution Identification:

To be completed by trustee

This Request for Bank Confirmation pertains to the following Financial Institution:

(Name, branch, and full mailing address)

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Part 3 – Notice to Financial Institution:

To be completed by a representative of the Superintendent of Bankruptcy

The aforementioned trustee has reported that, as at April 30, trust accounts were held in your institution.

The Superintendent of Bankruptcy has a duty under the Bankruptcy and Insolvency Act to "from time to time, make or cause to be made any enquiry or investigation of estates or other matters to which this Act applies, including the conduct of a trustee or a trustee acting as a receiver […] or as an interim receiver, that the Superintendent considers appropriate […]" [Par. 5(3)(e)]

Pursuant to subsection 6(2) of the Bankruptcy and Insolvency Act, the "Superintendent, or any one duly authorized by him in writing on his behalf, is entitled to have access to and to examine and make copies of the banking accounts of a trustee in which estate funds may have been deposited, and, when required, all deposit slips, cancelled cheques or other documents relating thereto in the custody of the bank or the trustee shall be produced for examination."

I, as a duly authorized representative of the Superintendent, do hereby require confirmation of the bank accounts of the aforementioned trustee which are open as at:

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Date : mm/dd/yyyy

Details regarding the information requested are found in Part 4 of this document. Please provide this information to the undersigned at the following address:

Address:
Innovation, Science and Economic Development Canada
Office of the Superintendent of Bankruptcy
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(Name of OSB representative)
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Email address:
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Telephone:
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Fax:
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Signature of Representative
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Part 4 — Information Requested from Financial Institution:

To be completed by financial institution

1. Specific bank accounts

Information Requested from Financial Institution
Name of Account Account Number Amount of Related Term Deposits
(if applicable)
Terms and Conditions of Related Term Deposits
(if applicable)
Account Balance (in parentheses if overdrawn)
         
         
         
A. Are all of the above-listed accounts designated as "Trust Accounts"?
Yes
Select this box if all of the above-listed accounts are designated as "Trust Accounts
No
Select this box if all of the above-listed accounts are not designated as "Trust Accounts"
B. Have any of the above-listed accounts been pledged as collateral for loans or other credit instruments?
Yes
Select this box if any of the above-listed accounts have been pledged as collateral for loans or other credit instruments
No
Select this box if none of the above-listed accounts have been pledged as collateral for loans or other credit instruments
C. For the above-listed accounts, is the withdrawal or transfer of funds allowed by cheque only?
Yes
Select this box if for the above-listed accounts, the withdrawal or transfer of funds is allowed by cheque only
No
Select this box if for the above-listed accounts, the withdrawal or transfer of funds is not allowed by cheque only
D. Are there any arrangements in place allowing the trustee to overdraw the trust accounts? If yes, please provide details.
Yes
Select this box if there are arrangements in place allowing the trustee to overdraw the trust accounts. Please provide details
No
Select this box if there are no arrangements in place allowing the trustee to overdraw the trust accounts.
E. Are you aware of any other trust accounts in the name of this trustee? If yes, please provide details as above.
Yes
Select this box if you are aware of any other trust accounts in the name of this trustee. Please provide details as above
No
Select this box if you are not aware of other trust accounts in the name of this trustee

2. Comments
Please provide on a separate sheet any comments or additional information, if applicable.

3. Trust Account Agreement
Please provide a copy of the most recent Trust Account Agreement between the trustee and the financial institution.

4. Signing Authority
Please provide below, or on a separate sheet, a list of individuals with signing authority on all trust accounts.

space to insert list of individuals with signing authority on all trust accounts (first)
space to insert list of individuals with signing authority on all trust accounts (second)
space to insert list of individuals with signing authority on all trust accounts (third)
space to insert list of individuals with signing authority on all trust accounts (fourth)
space to insert list of individuals with signing authority on all trust accounts (fifth)
space to insert list of individuals with signing authority on all trust accounts (sixth)

Statement of Procedures Performed by Financial Institution
The above information was completed in accordance with our records.

space to insert name of Authorized Signing Officer - Financial Institution
Authorized Signing Officer – Financial Institution
space to insert name of Branch Contact - name and telephone number
Branch Contact – Name and telephone number

Schedule 2—Annual Banking Report

Part 1. Acknowledgement to be Completed by the Trustee

I, the undersigned, do hereby submit this report in accordance with Directive No. 5R5, Estate Funds and Banking. Paragraph 11(1)(b) of that Directive requires that trustees annually complete and deliver such a report to the Office of the Superintendent of Bankruptcy (OSB) for all trust accounts open as at April 30 of that year. The undersigned trustee reports that, as at April 30, the following trust accounts were maintained by the undersigned at the bank(s) and branch(es) noted below and that the following information is true and complete in all material respects.

space to insert name of Trustee
Trustee (legal name under which the estates are filed)
space to insert Trustee License Number
Trustee license number
space to insert signature of Trustee(s) (authorized signing officer(s) on trust account)
Signature of Trustee(s) (authorized signing officer(s) on trust account)
space to print Trustee Name(s)
Print Trustee Name(s)
space to insert date
Date: (mm/dd/yyyy)
space to insert Trustee licence numbers that have estates in the Annual Banking Report
Trustee licence numbers that have estates in the Annual Banking Report

Part 2. Insolvency Software Details (see below)

The trustee shall include, in the first Annual Banking Report submitted to the OSB, a description of the software programs (either commercially available or proprietary) used to administer estate trust funds. Thereafter, the trustee shall promptly inform the OSB of any changes to the type of software used for this purpose as required by paragraph 7(1)(n) of Directive No. 5R5, Estate Funds and Banking.

Description of software used:

space to insert Description of software used

Part 3. Financial Institution Identification

Consolidated Bank Account Information (attach listing if required)
List Attached check this box if list is attached (part 3)
Financial Institution Identification
Deposit Type Bank Institution No. Bank Branch Address Bank Branch Transit No. Bank Account No. Account Balance as at April 30 Term Deposit Certificate No. Term Deposit Balance as at April 30 Bank and Branch where Term Deposit is Located
Summary Administration blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell 
Division II Proposal blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell 
Other (provide details) blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell 
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Part 4. Consolidated Bank Account – Detailed Estate Master List Information

Summary Administration Estates (a copy of the sub-ledger report, e.g., Summary of Estate Balances may be attached)
List Attached check this box if list is attached (part 4)
Consolidated Bank Account – Detailed Estate Master List Information
Superintendent's Estate No. (complete for all estates held in CBA) Estate Name Estate Type Bank Account No. Estate Balance ($) in Consolidated Bank Account as at April 30
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Part 5. Consolidated Bank Account – Detailed Estate Master List Information

Division II Proposal Estates (a copy of the sub-ledger report, e.g., Summary of Estate Balances, may be attached)
List Attached check this box if list is attached (part 5)
Consolidated Bank Account – Detailed Estate Master List Information
Superintendent's Estate No. (complete for all estates held in CBA) Estate Name Estate Type Bank Account No. Estate Balance ($) in CBA as at April 30
blank cell  blank cell  blank cell  blank cell  blank cell 
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Part 6. Consolidated Bank Account – Detailed Estate Master List Information

Other Trust Account Information (for use with consolidated bank accounts identified under Part 3 as "Other")
List Attached check this box if list is attached (part 6)
Part 6. Consolidated Bank Account – Detailed Estate Master List Information
Superintendent's Estate No. (if applicable) Estate Name or Depositor's Name Deposit Type Bank Account No. Trust Account Balance as at April 30
blank cell  blank cell 
  • check this box if deposit type is a summary Summary
  • check this box if deposit type is ordinary Ordinary
  • check this box if deposit type is a division I proposal Division I Proposal
  • check this box if deposit type is a division II proposal Division II Proposal
  • check this box if deposit type is a Receivership Receivership
  • check this box if deposit is of another type Other (provide details):
blank cell  blank cell 
blank cell  blank cell 
  • check this box if deposit type is a summary Summary
  • check this box if deposit type is ordinary Ordinary
  • check this box if deposit type is a division I proposal Division I Proposal
  • check this box if deposit type is a division II proposal Division II Proposal
  • check this box if deposit type is a Receivership Receivership
  • check this box if deposit is of another type Other (provide details):
blank cell  blank cell 
blank cell  blank cell 
  • check this box if deposit type is a summary Summary
  • check this box if deposit type is ordinary Ordinary
  • check this box if deposit type is a division I proposal Division I Proposal
  • check this box if deposit type is a division II proposal Division II Proposal
  • check this box if deposit type is a Receivership Receivership
  • check this box if deposit is of another type Other (provide details):
blank cell  blank cell 

Part 7. Individual Estate Bank Account Detailed Information

(A copy of the sub-ledger report, e.g., Summary of Estate Balances, may be attached)
List Attached check this box if list is attached (part 7)
Part 7. Individual Estate Bank Account Detailed Information
Superintendent's Estate No. Estate Name Deposit Type Bank Institution No. Bank Branch Address Branch Transit No. Bank Account No. Bank Account Balance as at April 30 Term Deposit Certificate No. Term Deposit Balance as at April 30 Bank and Branch Where Term Deposit Located
blank cell  blank cell 
  • check this box if deposit type is a summary Summary
  • check this box if deposit type is ordinary Ordinary
  • check this box if deposit type is a division I proposal Division I Proposal
  • check this box if deposit type is a division II proposal Division II Proposal
  • check this box if deposit type is a Receivership Receivership
  • check this box if deposit is of another type Other (provide details):
blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell 
blank cell  blank cell 
  • check this box if deposit type is a summary Summary
  • check this box if deposit type is ordinary Ordinary
  • check this box if deposit type is a division I proposal Division I Proposal
  • check this box if deposit type is a division II proposal Division II Proposal
  • check this box if deposit type is a Receivership Receivership
  • check this box if deposit is of another type Other (provide details):
blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell 
blank cell  blank cell 
  • check this box if deposit type is a summary Summary
  • check this box if deposit type is ordinary Ordinary
  • check this box if deposit type is a division I proposal Division I Proposal
  • check this box if deposit type is a division II proposal Division II Proposal
  • check this box if deposit type is a Receivership Receivership
  • check this box if deposit is of another type Other (provide details):
blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell  blank cell 

Part 8. Trust Transfer Account Detailed Information

Part 8. Trust Transfer Account Detailed Information
Bank Institution No. Branch Transit No. Transit Bank Account No. Transit Bank Account Balance as at April 30 Receiving Bank Institution No. Receiving Branch Transit No. Receiving Bank Account No(s).
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Schedule 3—Electronic Fund Transfer (EFT) – Authorization Agreement

Part 1: To be completed by trustee

Schedule 3—Electronic Fund Transfer (EFT) – Authorization Agreement
Name and Address of Trustee
space to insert name
space to insert first line of address
space to insert second line of address
space to insert third line of address
space to insert fourth line of address

Part 2: Identification of electronic payment recipient (print or type)

Part 2: Identification of electronic payment recipient
Last name space to insert last name
or
Business name space to insert business name
First name space to insert first name
Mailing address
space to insert first line of mailing address
space to insert second line of mailing address
space to insert third line of mailing address
space to insert fourth line of mailing address
Phone Number
(space to insert first digit of regional code space to insert second digit of regional code space to insert third digit of regional code) space to insert first digit of phone number space to insert second digit of phone number space to insert third digit of phone number - space to insert fourth digit of phone number space to insert fifth digit of phone number space to insert sixth digit of phone number space to insert seventh digit of phone number
Designated Contact Person
space to insert name of designate contact person
Phone Number
(space to insert first digit of regional code space to insert second digit of regional code space to insert third digit of regional code) space to insert first digit of phone number space to insert second digit of phone number space to insert third digit of phone number - space to insert fourth digit of phone number space to insert fifth digit of phone number space to insert sixth digit of phone number space to insert seventh digit of phone number

Part 3: Account information for electronic payment

The undersigned confirms the following account information for the purposes of receiving payments by electronic transfer of funds. Any existing account previously set up by the creditor with the trustee is to be replaced by this account information.
Part 3: Account information for electronic payment
Bank Name Space to insert Bank name
Bank Address
Space to insert first line of Bank Address
Space to insert second line of Bank Address
Space to insert third line of Bank Address
Space to insert fourth line of Bank Address
Transit Number
Space to insert Transit Number
Institution Number
Space to insert Institution Number
Account Number
Space to insert Account Number
Type of Account
Chequing check box if this is a checking account
Savings check box if this is a savings account
Other (Explain) Space to insert other type of bank account
Please attach a copy of a voided cheque or deposit slip for validation of information

Part 4: Declaration consent and authorization

The undersigned hereby certifies that the foregoing information delivered to the trustee is true in all material respects and consents to receive all payments electronically. The undersigned hereby authorizes the trustee to initiate credit entries, electronically, to his or her account. The undersigned further acknowledges that it is his or her responsibility to ensure that the account stays current and available for electronic payments of dividends payable as those dividends become due. The undersigned may revoke or cancel this agreement at any time by delivering a notice of such revocation or cancellation to the trustee. The undersigned agrees to retain the signed original of this document for the duration of this agreement if sending a facsimile copy to the trustee.
Part 4: Declaration consent and authorization
space to insert signature of authorized signatory
(Signature of authorized signatory)
Direct phone number
(space to insert first digit of regional code space to insert second digit of regional code space to insert third digit of regional code) space to insert first digit of phone number space to insert second digit of phone number space to insert third digit of phone number - space to insert fourth digit of phone number space to insert fifth digit of phone number space to insert sixth digit of phone number space to insert seventh digit of phone number
space to insert name of signatory
(Print name of signatory)
space to insert title of signatory
(Title)
space to insert date
Date (mm/dd/yyyy)

Schedule 4—Single Attestation for Monthly Estate Trust Account Reconciliations

  • space to insert confirmation I hereby acknowledge and confirm that I have reviewed and verified the reconciliations for the estate trust accounts listed below (or listed in the attached document) for the month of [month] [year].
  • space to insert acceptance I hereby accept full accountability in regards to the reconciliation of all listed trust accounts.
List (or attach document listing) estate names, estate numbers and bank account numbers of all reconciled estate trust accounts:
Estate Name Estate Number Account Number
     
     
     
     
     
space to insert trustee's signature
[Trustee Signature]
space to insert Bank Reconciliation approval date
[Bank Reconciliation Approval Date]
space to insert Trustee Name
[Print Trustee Name]
space to insert Trustee Licence Number
[Trustee Licence Number]

Important notice:

The HTML version of this Directive is not the official version. In the event of an inconsistency between the HTML and PDF versions of this Directive, the PDF version prevails. Users are required to exercise due diligence with respect to the HTML version.

Date modified: