Overview of Canadian Bail-in Regulations
Overview of Canadian Bail-in Regulations
NVCC vs. Bail-in
• NVCC are regulatory capital instruments
other than common shares that are
converted to CET1 at non-viability
• Authorities would trigger NVCC only
where there was a high level of
confidence that the conversion plus
additional measures would restore the
viability of the bank
• NVCC improves regulatory capital quality,
not quantity
。 Conversion of NVCC increases CET1 but not total
capital - a gap that Bail-in addresses
• NVCC is a prerequisite to Bail-in
Enhanced Disclosures
⚫ Bail-in debt will be subject to robust
disclosure requirements to promote
transparency, legal certainty and market
discipline
• Contractual terms must include a clause
whereby investors expressly submit to the
Canadian Bail-in regime notwithstanding any
foreign law to the contrary
Disclosures regarding Bail-in power are
required in offering documents
⚫ DSIBS are not permitted to advertise or
otherwise promote Bail-in debt, including in
its name, to a purchaser in Canada as a
deposit
• Failure to meet these requirements would not
exempt an issuance from being eligible for
Bail-in
Scotiabank®
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