Financial Institutions - Frequently Asked Questions
FAQs - Corporate
Note: For information specific to certain types of financial institutions, see Financial Service Providers Regulated in Alberta.
- Do I need to be registered?
- How do I incorporate a …?
- What are my ongoing responsibilities as a registered financial institution?
- The deposit-taking business is restricted to credit unions, loan and trust corporations registered to do so in Alberta, ATB Financial and federally registered banks. For the most part, the only companies that can offer fiduciary services are trust companies registered in Alberta, though some other financial institutions have limited fiduciary powers. An individual may act as a trustee subject to the Trustee Act.
Generally speaking, the deposit-taking business means a business whose activities are substantively financed out of money received by way of deposit (money received that is not referable to the provision of property or services or to the giving of security). An exception to this is where the person does not hold himself out as accepting deposits on a day-to-day basis, and where deposits are accepted only on particular occasions and on a basis that is ancillary to another business purpose. For full details, please see the Loan and Trust Corporations Act.
Fiduciary services includes the business of offering its services to the public as or accepting or executing the office of executor or administrator or trustee, or guardian or trustee of a minor's estate or of the estate of a mentally incompetent person except for a few designated entities.
- Copies of the application forms required to register a company can be found in the Publications & Forms section for the related type of financial institution.
- Register security under the Personal Property Security Act: Companies must be incorporated or registered under an Act of Alberta. Credit unions incorporated outside of Alberta, may register as an extra-provincial corporation under the Business Corporations Act for this purpose.
- Mortgage brokers must be licensed under the Real Estate Act.
- Loan brokers: Some activities are regulated under the Fair Trading Act.
A company or individual must apply to our office to incorporate a credit union, loan or trust corporation in Alberta. The application must include sufficient information to demonstrate that:
- it is in the public interest to establish another financial institution
- the proposed plan of operation is feasible and sound and that adequate financial resources exist to provide continuing financial support for the financial institution
- the proposed shareholders, directors and management are fit, in terms of skill and character, to own, direct and manage the financial institution
- deposit holders, if any, are adequately protected.
Copies of the application forms required to incorporate a company can be found in Publications & Forms section under the related type of financial institution.
The time required to incorporate a new company is dependent on many factors including the type of financial institution, corporate structure, intended business, etc.
Regulated financial institutions must file certain "corporate" and "financial" information with us on both a periodic and ad hoc basis. Examples of corporate information include lists of directors and auditors, shareholders, officers, copies of by-laws, orders issued by other provinces or federally, and changes or requests for changes to the company's instrument of incorporation or registration made by or to other provinces or federally. Examples of financial information include signed and audited annual financial statements, other periodic financial returns, and all financial information sent to shareholders.
What other responsibilities do I have?
Financial institutions incorporated in Alberta are subject to periodic examination. This involves combination of office and field reviews (at head office, branches and auditors) to ensure that they are operating in a sound manner (adequate solvency, systems, controls, personnel) and in compliance with the appropriate legislation.
Legislation imposes certain restrictions over the entry and exit from the business, corporate incidents (issues relating to directors, shareholders, other stakeholders), activities of the corporation (types of business), extent to which assets can be committed (liquidity, exposure limits, capital), and preconditions for transactions with restricted parties.
The board of directors of an institution, through setting the overall direction of the company and oversight of management's decisions and performance, has ultimate responsibility for the management of the company. As regulator, we will make recommendations to the company where areas need improvement and may use other regulatory powers where it is necessary to safeguard depositors from experiencing any undue loss.