Office of the Superintendent of Bankruptcy Update at 2016 CAIRP Insolvency and Restructuring Forum Building a prosperous and innovative Canada

Update Insolvency Trends Current OSB Priorities Total BIA volumes Commercial filings Consumer proposals Trustee licensing Current OSB Priorities Regulatory initiatives Operations and compliance

BIA Volumes* * Includes consumer, sole proprietor and corporate files. Source: Office of the Superintendent of Bankruptcy Canada Closed files are defined in this graph by the LIT discharge date.

BIA Corporate Volumes Source: Office of the Superintendent of Bankruptcy Canada Closed files are defined in this graph by the LIT discharge date.

Large Corporate Restructurings Source: Office of the Superintendent of Bankruptcy Canada Large corporate restructurings: liabilities over $5 million

Consumer Proposal Volume Consumer Proposals as a Percentage of Total Consumer Filings (2010-2015)   Consumer Proposal Volume 2011 2012 2013 2014 2015 Canada 45,006 46,903 49,454 53,211 58,203 East 11,986 13,809 17,531 20,311 22,878 Ontario 24,931 24,145 22,361 21,874 21,977 West 8,089 8,949 9,562 11,026 13,348 Source: Office of the Superintendent of Bankruptcy Canada

Licensing Trends 2013/2014 2014/2015 2015/2016 * Preliminary board assessment only

Regulatory Initiatives – Trustee Designation and Advertising Requirement to adopt Licensed Insolvency Trustee (LIT) effective April 1: All representations All consumer advertising Use of TIB to be discontinued by April 1, 2017 OSB public information and awareness on LIT – Fall 2016 OSB is pursuing misrepresentations / unauthorized use Non-trustee (consent required) Trustees Compliance validation Year 1 Monitoring program or during LIT office visit

Regulatory Initiatives – Licensing Policy & Operations OSB’s Trustee Licensing requirements Consultation on university degree requirement Review of good character requirement Streamlined licence extensions Review of Memorandum of Understanding (MOU) with CAIRP on CQP: Result of CAIRP’s current CQP review Validation of candidate experience / practical competency Review of experience / professional qualification policy trends Consultation on Trustee Licence Web Portal (spring and fall 2016): Candidate Application Licence Renewal Administrative actions Online fee payment

Regulatory Initiatives – Banking Directive Revised Directive on Estate Funds and Banking in April/May 2016: Further to 2015 consultations, four areas of change: Trust Transfer Account Enable / codify debit machines and electronic payments On request, single destination accounts to accept e-payments from OSB Monthly Trust Account Reconciliations New provision for allowing for consolidated attestations Estate Filing Fees Codify existing practice allowing payment from estate account or LIT corporate account Administrative clean-ups

Regulatory Initiatives – Assessment Directive Directive has been reviewed with a view to ensuring initial assessment remains integral to decision-making on BIA consumer insolvency filings Under consideration: Clarification on LIT role and accountability in assessment process Employment and conflict of interest parameters for those who may assist with LIT assessment duties Education, experience and training requirements for non-LITs involved in assessment Record-keeping Input received from CAIRP in summer 2015 OSB public consultation planned for spring / early summer 2016

Operations and Compliance In 2015, OSB adopted national approach to LIT compliance validation: Ongoing monitoring program: Trust account balances and operations Final SRD sampling and review Aged estates Disclosure and reporting LIT Office Visits – approx. 25% per year Goal is to achieve uniform program informed by annual monitoring results Complaint Review / Investigation 2014-15: 938 formal complaints regarding stakeholders Of 434 complaints about LITs,131 were founded

Operations and Compliance (cont’d) Planned changes to LIT compliance program for 2016 cycle: Distribute and publish compliance program information via staff and website (early summer) OSB Management contact list for LIT enquiries Reduced information and review requirements where 2015 compliance results were consistently high (e.g., aged estates, SRD asset realizations) Best practice guidelines to allow LITs to minimize common OSB follow-ups on particular issues Streamlined communications of monitoring results 2016 annual priority: Designation and advertising compliance Compliance program development Study of modified compliance monitoring program for firms with integrated structures / business process Insolvency Name Search Modernized technology, review of charging policy