Learn about procedures for processing Retail Debt instruments through The Canadian Depository for Securities Limited (CDS) and about the Client Account Agreement, and about rates and redemption values for unmatured and matured bonds.

Procedures (CDS)

The following processes are described:

Refer to the checklist for dealers to help you execute the Canada Savings Bonds Program processing and reporting activities.

Client Account Agreement

The dealer will ensure that clients who hold NC-CDSX-Bonds are bound by a client account agreement with the authorized sales agent that provides the authorized sales agent with the authority to transact, on behalf of the NC-CDSX-Bond owner, all possible types of transactions involving NC-CDSX-Bonds including giving CDS or the Bank of Canada instructions for such transactions, and receiving payments on behalf of the Bond owner.

The authorized sales agent will take all steps necessary to enable the Bank of Canada to prove that any instructions regarding NC-CDSX-Bonds provided on behalf of the NC-CDSX-Bond owner, and which are acted on by the Bank, form an enforceable agreement between the Bank (acting as the agent of the Government of Canada) and the authorized sales agent (acting as the agent for the NC-CDSX-Bond owner).

Sales Agent Procedures

The authorized sales agent shall distribute a summary of the terms and conditions of NC-CDSX-Bonds to each owner of NC-CDSX-Bonds at the time of purchase or at the time of the CDS Bring-On of certificated Retail Debt products, as the case may be.

The authorized Sales agent shall comply with the terms and conditions of the NC-CDSX-Bonds, including without limiting the generality of the foregoing, the terms and conditions relating to the sales periods, registration types, interest payments, restrictions on transfer, redemption etc. The authorized sales agent shall enter into such agreements with owners of NC-CDSX-Bonds, or take such other steps as may be necessary, to ensure that such owners comply with the terms and conditions of NC-CDSX-Bonds.

The authorized sales agent shall maintain a register of individual owners of NC-CDSX-Bonds, which register shall contain such information as may be specified from time to time by the Bank of Canada. When requested by the Bank, the authorized sales agent will provide the Bank, as the case may be, with the information contained in such register.

The authorized sales agent shall hold all funds received from the sale of Retail Debt Products in a designated account established solely for the purpose. These proceeds are deemed to be held in trust for the Receiver General for Canada pending settlement with the Bank or its designate.

Closed Loan Period

NC-CDSX-Bonds will not be subject to a closed loan period. Retail Debt products held in certificated form are subject to a two month closed loan period.

Compliance

As stated in the current Sales Agent Agreement, the Bank or its designate shall have the right to carry out periodic audits of the records of the authorized sales agent in order to verify that the agent has not contravened the provisions of specific clauses outlined in the Sales Agent Agreement or of any Appendix.