TD Bank 2014 Annual Report Download - page 205

TD BANK GROUP ANNUAL REPORT 2014 FINANCIAL RESULTS 203
RELATED PARTY TRANSACTIONS
NOTE 30
Parties are considered to be related if one party has the ability to
directly or indirectly control the other party or exercise significant
influence over the other party in making financial or operational
decisions. The Bank’s related parties include key management person-
nel, their close family members and their related entities, subsidiaries,
associates, joint ventures, and post-employment benefit plans for the
Bank’s employees.
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL, THEIR
CLOSE FAMILY MEMBERS AND THEIR RELATED ENTITIES
Key management personnel are those persons having authority and
responsibility for planning, directing, and controlling the activities of
the Bank, directly or indirectly. The Bank considers certain of its offi-
cers and directors and their affiliates to be key management personnel.
The Bank makes loans to its key management personnel, their close
family members, and their related entities on market terms and
conditions with the exception of banking products and services for
key management personnel, which are subject to approved policy
guidelines that govern all employees.
Loans to Key Management Personnel, their Close Family
Members
and their Related Entities
(millions of Canadian dollars) As at
October 31 October 31
2014 2013
Personal loans, including mortgages $ 4 $ 3
Business loans 262 181
Total $ 266 $ 184
COMPENSATION
The remuneration of key management personnel was as follows:
Compensation
(millions of Canadian dollars) For the years ended October 31
2014 2013 2012
Short-term employee benefits $ 27 $ 25 $ 23
Post-employment benefits 1 2 1
Share-based payments 37 32 32
Total $ 65 $ 59 $ 56
In addition, the Bank offers deferred share and other plans to non-
employee directors, executives, and certain other key employees.
See Note 25 for more details.
In the ordinary course of business, the Bank also provides various
banking services to associated and other related corporations on terms
similar to those offered to non-related parties.
TRANSACTIONS WITH SUBSIDIARIES, TD AMERITRADE
AND SYMCOR INC.
Transactions between the Bank and its subsidiaries meet the definition
of related party transactions. If these transactions are eliminated on
consolidation, they are not disclosed as related party transactions.
Transactions between the Bank, TD Ameritrade and Symcor also
qualify as related party transactions. There were no significant transac-
tions between the Bank, TD Ameritrade and Symcor during fiscal 2014,
other than as described in the following sections.
Other Transactions with TD Ameritrade and Symcor Inc.
(1) TD AMERITRADE HOLDING CORPORATION
The following is a description of significant transactions of the Bank
and its affiliates with TD Ameritrade.
Insured Deposit Account (formerly known as Money Market
Deposit Account) Agreement
The Bank is party to an insured deposit account (IDA) agreement with
TD Ameritrade, pursuant to which the Bank makes available to clients
of TD Ameritrade, IDAs as designated sweep vehicles. TD Ameritrade
provides marketing and support services with respect to the IDA. The
Bank paid fees of $895 million in 2014 (2013 – $821 million; 2012 –
$834 million) to TD Ameritrade for the deposit accounts. The fee
paid by the Bank is based on the average insured deposit balance of
$80 billion in 2014 (2013 – $70 billion; 2012 – $60 billion) with a
portion of the fee tied to the actual yield earned by the Bank on the
investments, less the actual interest paid to clients of TD Ameritrade,
with the balance based on an agreed rate of return. The Bank earns
a servicing fee of 25 basis points on the aggregate average daily
balance in the sweep accounts (subject to adjustment based on a
specified formula).
As at October 31, 2014, amounts receivable from TD Ameritrade were
$103 million (October 31, 2013 – $54 million). As at October 31, 2014,
amounts payable to TD Ameritrade were $104 million (October 31,
2013 – $103 million).
(2) TRANSACTIONS WITH SYMCOR INC.
The Bank has one-third ownership in Symcor Inc. (Symcor), a Canadian
provider of business process outsourcing services offering a diverse
portfolio of integrated solutions in item processing, statement process-
ing and production, and cash management services. The Bank
accounts for Symcor’s results using the equity method of accounting.
During fiscal 2014, the Bank paid $122 million (2013 – $128 million;
2012 – $128 million) for these services. As at October 31, 2014,
the amount payable to Symcor was $10 million (October 31, 2013 –
$10 million).
The Bank and two other shareholder banks have also provided a
$100 million unsecured loan facility to Symcor which was undrawn
as at October 31, 2014, and October 31, 2013.