Provinces with unclaimed property legislation require the issuer of a security or their agent (e.g., Computershare as transfer agent and registrar for the securities) to record, report and/or remit unclaimed property to the government, in accordance with the specific rules of each legislation.
There have been updates to unclaimed property regulations in Canada. Here is what you need to know about the new legislation in New Brunswick and changes to the existing legislation in Québec.
New Brunswick has joined Alberta, British Columbia, and Québec as the fourth Canadian province to enact unclaimed property legislation. The legislation was proclaimed into law on November 4, 2021, and its two associated rules became effective January 1, 2022, with first remittance in 2023.
Under the new legislation, if your shareholders have unclaimed property valued at more than $100 CA, Computershare will first mail the shareholder a notice that they are considered a lost shareholder. If the shareholder does not respond by December 31 in any given year, the unclaimed property will be reported and remitted to the regulator, the Financial and Consumer Services Commission (FCSC) of New Brunswick.
The main differences with the New Brunswick unclaimed property legislation compared to other jurisdictions is that in addition to the uncashed dividend payments, the government also requires remittance of the underlying assets, which are the shares.
Also, certain corporate actions are eligible for remittance and delivery to the FCSC. For example, if a corporate event takes place where shareholders are required to exchange their old shares for shares in the new company and they did not submit the letter of transmittal for election, the unexchanged shares and accrued dividends, if applicable, will be reported and remitted to the FCSC.
The first reporting period for this program was January to March 2023 for eligible unclaimed property for the preceding five years plus the three-year dormancy period (i.e., from 2014 to 2021). This means that a shareholder who has uncashed payments or unexchanged entitlements and has not been in contact with Computershare for three years, may have funds and securities remitted to the FCSC.
While Québec has had its existing unclaimed property legislation in place since 2011, there have been changes to this legislation. Currently, the Québec legislation requires Computershare to remit the uncashed dividend payments of lost shareholders to Revenu Québec.
Revenu Québec proposed and passed changes to their legislation to extend the scope of Québec’s unclaimed property law to the securities underlying the uncashed dividend payments. The categories of eligible property in the Act include deposits with a deposit institution authorized in Québec, certified cheques, amounts due on the reimbursement or redemption of debt securities, shares or any other ownership interests and distributions made on such instruments, funds, securities and other property received by a securities adviser or broker.
The changes to the Act allow Revenu Québec to take possession of the underlying securities (shares) when Québec residents fail to cash their dividend cheques and the three-year dormancy period has expired. While this law came into force on February 24, 2022, these amendments took effect in 2023, with remittance in 2024.
As before, this legislation is not limited to Québec issuers; it applies to all issuers with shareholders based in Québec.
Computershare’s role in unclaimed property
As transfer agent, Computershare manages the unclaimed property responsibilities for our clients. If you have questions about unclaimed property legislation and your registered shareholders, please contact your Relationship Manager.
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