Scotiabank ESG and Financial Performance Update
Canadian Bail-in Regulations: Key Features
BEST IN CLASS APPROACH
Post September 23, 2018, senior unsecured debt issued by Canadian DSIBS that is subject to bail-in is the only format of issuance available¹
and is a single class of debt2 that is not subordinated to another class of wholesale senior debt
• Canadian bank term senior unsecured debt is not structurally, statutorily or contractually subordinated to another class of senior liabilities
and therefore ranks equally to deposits and other senior liabilities in liquidation
• Canada utilizes a statutory bail-in regime where, unlike the contractual regime of Canadian NVCC capital instruments, bail-in conversion
terms are not prescribed. CDIC retains flexibility to exercise the bail-in power in a manner that is appropriate given the circumstances at the
time and subject to certain parameters
•
In the remote event of non-viability, the no creditor worse off principle ensures that bailed-in senior creditors do not incur greater losses
through resolution than liquidation. The CDIC compensation regime floors recovery at the liquidation value
• The bail-in regime provides for a relative hierarchy of claims. Creditors receive common shares in accordance with their relative rankings
1 Excludes structured notes as defined in section 2(6) of the Bank Recapitalization (Bail-in) Conversion Regulations under the CDIC Act; 2 Ranks pari passu with other forms of senior
debt, except as otherwise prescribed by law and subject to the exercise of bank resolution powers
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