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40 vested with certain restricted powers to take control of the assets of a bank or direct a bank to take or refrain flan taking a course of action for the protections of its depositors and creditors. Primary and Secondary Reserve Requirements The Bank Act requires that a bank maintain a prinary reserve in the form of specified coinage and rotes of, and deposits in Canadian currency with, the Bank of Canada. This reserve shall not be less on the average during any nmth than an amount equal to specified percentages of certain deposit liabilities. The assets comprising the primary reserve ase non -insane producing. Under recent policy proposals, non-interest beating reserves will be phased art beginning in 1990. The Sink Act also acpowers the Bank of Canada to require a bank to maintain, in addition to the primary reserve, a secondary reserve in the foam of treasury bills arra day Loans to investment dealers at such percentage of its deposit liabilities subject to primary reserve requirements as may be fixed by the Bank of Canada pursuant to the Bank of Canada Act. The Bank continues to be in carpl.iance with its primarl and secordary reserve requirements. Recent legislation The Government of Canada made policy proposals in December, 1986 concerning revised powers of Canadian financial institutions. While separation of institutions would be retained for supervisory purposes, the policy would permit comron ownership of banks, trust and loan ccapanies, insurance canpanies and investment dealers. Trust, loan and insurance canpanies would have full powers to undertake oonsumer and oomriercial lending. All federally regulated financial institutions would be permitted to offer investment advice, portfolio management services and to engage in corporate urderwriting. Barks and insurance canpanies would be given fiduciary powers. Under recent legislation, sore of these new policies have been phased in comrencing July 1, 1987. In June, 1987, the Goverrment of Ontario enacted detailed anendments to securities legislation with respect to the role of banks in Ontario in the securities industrv, which is provincially regulated. 'The am=endments permit chartered banks to own up to 100 per cant of a Canadian securities dealer effective July 1, 1987. Securities -related activities of a bank, other than those permitted to be carried on through a subsidiary or an affiliate, wi11 remain under federal regulation. The overall result of these changes will be an increase in carpetition ancg finarcial institutions, while at the sane time providing new opportunities for banks such as the Toronto -Dominion Bank. FINADC 1AL REPORTING The Bank Act and related instructions prescribed by the Minister of Finance stipulate the format of the finarrial statements and the significant accounting policies to be used in Canadian bank financial statements. Generally Accepted Accounting Prirciples for banks in the United States are determired by various accounting policy boards and cenmittees, the Securities arra Exchange Commission and banking regulatory agencies. The following describes the major differences between accounting principles applicable to the Bank and generally accepted accounting principles applicable to U.S. banks. A-3