FINAL CANADIAN BAIL-IN RULES: IMPACT ON STRUCTURED NOTES OFFERED IN THE UNITED STATES -

In March 2018, the Canadian government released its final regulations relating to “bail-in instruments” issued by Canadian domestically systemically important banks (“D-SIBs”). The regulations are a key part of Canada’s new bank recapitalization plan. Under the plan, certain bank instruments, including many debt securities, may convert into the issuer’s equity securities if an issuer becomes non-viable.

The final rules do not differ significantly from the rules as they were proposed in June 2017, which we discussed in our July 12, 2017 issue of this publication.