Government Notices Respecting Corporations

Certificate of Dissolution

Notice Is Hereby Given that a certificate of dissolution under the Business Corporations Act, has been endorsed: The effective date precedes the corporation listings.

B. G. Hawton,
Director (A), Companies Branch
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Cancellation of Certificate of Incorporation (Business Corporations Act)

Notice Is Hereby Given that by orders under subsection 241 (4) of the Business Corporations Act, the certificates of incorporation set out hereunder have been cancelled and corporation(s) have been dissolved. The effective date of cancellation precedes the corporation listing.

B. G. Hawton,
Director (A), Companies Branch
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Notice of Default in Complying with the Corporations Tax Act

The Director has been notified by the Minister of Revenue that the following corporations are in default in complying with the Corporations Tax Act.

Notice Is Hereby Given under subsection 241 (1) of the Business Corporations Act, that unless the corporations listed hereunder comply with the requirements of the Corporations Tax Act within 90 days of this notice, orders will be made dissolving the defaulting corporations. All enquiries concerning this notice are to be directed to Corporations Tax Branch, Ministry of Revenue, 33 King Street West, Oshawa, Ontario, L1H 8H6.

B. G. Hawton,
Director (A), Companies Branch
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Credit Unions and Caisses Populaires Act, 1994 (Certificates of Amendment of Articles Issued)

Notice Is Hereby Given that, under the Credit Unions and Caisses Populaires Act, 1994 amendments to articles have been effected as follows:

John M. Harper,
Director, Examinations
by Delegated Authority from Dina Palozzi,
Superintendent of Financial Services.
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Credit Unions and Caisses Populaires Act, 1994

Dico Risk Classification System

November 10, 2000

1. Overview

This publication, which has been authorized by the Deposit Insurance Corporation of Ontario (“Dico”), details the rules for establishing a member institution’s^{footnote 1[1]} premium class under section 276 (4) of the Credit Unions and Caisses Populaires Act, 1994 (the “Act”) and Regulations.

2. Premium Classes

For purposes of calculating the annual premium, each member institution is placed in one of the following premium classes, based on its risk rating.

3. Differential Premium System (“DPS”) Risk Rating

The DPS risk rating is based on five performance and condition measures outlined in section 4, and calculated for each member institution in accordance with the following table. The risk rating is calculated as at the member institution’s fiscal year-end based on information from the sources of data outlined in section 5.

(Note: Points are determined by matching a member institution’s results in each performance and condition measure against the range in column 2, and the corresponding points in column 3.)

4. Performance and Condition Measures

Calculations for the five performance and condition measures are detailed below.

All quantitative measures, except for the Asset/Liability measure, are expressed as percentages, and rounded to two decimal places. The Asset/Liability measure is rounded to the nearest basis point.

Capital

Capital is measured using the following formula:

A¸B

Where A = regulatory capital as set out in section 14 of Ontario Regulation 76/95.

Where B = total assets as set out in section 13 of Ontario Regulation 76/95.

Asset Quality

Asset quality is measured using the member institution’s average loan loss ratio (loan costs divided by average assets) for the past three years, weighted for recency, and is expressed by the following formula:

[3 x (loan costs y1 ¸ average assets y1) + 2 x (loan costs y2 ¸ average assets y2) + (loan costs y3 ¸ average assets y3)] ¸ 6

where:

y1 = “Year 1”, the 12 month period preceding the most recent fiscal year-end

y2 = “Year 2”, the 12 month period preceding Year 1 y3 = “Year 3”, the 12 month period preceding Year 2

and “average assets” for each year are calculated as follows: (assets at beginning of year + assets at end of year) ¸2

Management (Corporate Governance)

Management (Corporate Governance) points are assigned through Dico’s On-Site Verification (“OSV”) process. Management points are based on the OSV’s assessment of the effectiveness of the following risk management practices:

• Corporate Governance
• Capital Management
• Credit Management
• Investment Management
• Asset/Liability Management
• Liquidity Management
• Internal Controls

Effectiveness is measured by assessing compliance with Dico’s Standards of Sound Business and Financial Practices (which are specified in the Corporation’s By-law No. 5), relevant sections of the Act, the Regulations promulgated under the Act, and the member institution’s own by-laws.

A “critical weakness” is defined as either ineffective credit or investment management practices. A “weakness” is defined as any other ineffective risk management practice.

Late or non-filing of the Member Institution Self-Assessment Return (“Misar”) results in 0 points for Management. The Misar must be filed within 6 months of the member institution’s fiscal year end.

Earnings

Earnings are measured using an average of the past three years return on assets (“ROA”) (net income divided by average assets), weighted for recency. ROA is calculated after all charges, including dividends, taxes, and extraordinary items, and is expressed by the following formula:

[3 x (net incomey1¸average assetsy1) + 2 x (net incomey2 ¸ average assetsy2) + (net incomey3 ¸average assetsy3)] ¸6

where:

y1 = “Year 1”, the 12 month period preceding the most recent fiscal year-end

y2 = “Year 2”, the 12 month period preceding Year 1 y3 = “Year 3”, the 12 month period preceding Year 2

and “average assets” for each year are calculated as follows: (assets at beginning of year + assets at end of year) 2

Asset/Liability

The Asset/Liability component is based on the member institution’s interest rate risk measurement, as reported in the Annual Member Institution Return (“Amir”) and verified by the member institution’s external auditor.

Member institutions are expected to employ interest rate risk measurement techniques that are appropriate for their size and complexity, and that meet the requirements of section 78 of Ontario Regulation 76/95.

If it is concluded during the course of an OSV that the member institution does not have effective Asset/Liability Management practices, it will result in 0 points for the Asset/Liability measure.

5. Sources of Data

The DPS risk rating is calculated based on information documented in the following:

• Amir;
• OSV Report; and
• Misar.

Where a member institution does not file its Amir within the prescribed time, the member institution will be assigned to Premium Class 5. The Corporation may adjust the Premium Class upon receipt of the Amir.

6. Transition Period

A one-time transition premium will be calculated for each member institution for the period beginning January 1, 2001 to each institution’s fiscal year-end in 2001.

The DPS risk rating for the transition period will be calculated based on information documented in the following:

• Member Institution Return (“MIR”) or Amir;
• OSV Report, and
• Misar.

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