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Vol. 135, No. 31 — August 4, 2001
Specialized Financing (Trust and Loan Companies) Regulations
Statutory Authority
Trust and Loan Companies Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
| definitions | SPECIALIZED FINANCING (TRUST AND LOAN COMPANIES) REGULATIONS |
|---|---|
| INTERPRETATION | |
| Definitions |
1. (1) The following definitions apply in these
Regulations. |
| "Act" « Loi » |
"Act" means the Trust and Loan Companies Act. |
| "book value" « valeur comptable » |
"book value", in respect of the shares and ownership
interests held by an entity, means the book value reported on the
entity's balance sheet on an unconsolidated basis. |
| "specialized financing entity of the company" « entité de la société s'occupant de financement spécial » |
"specialized financing entity of the company" means a specialized
financing entity that is controlled by the company or in which the
company holds a substantial investment. |
| "subsidiary" « filiale » |
"subsidiary", in respect of a company, does not include a subsidiary that is a specialized financing entity of the company. |
| Definition of "specialized financing entity" | (2) In these Regulations and for the purpose of the definition "specialized financing entity" in subsection 449(1) of the Act, "specialized financing entity" means an entity that acquires or holds shares of, or ownership interests in, entities that a company may acquire control of, or hold, acquire or increase a substantial investment in, under subsection 451(4) of the Act. |
| GENERAL | |
| Application | 2. These Regulations apply to specialized financing activities under subsection 451(4) of the Act and to the ownership by a company of shares of, or ownership interests in, a specialized financing entity under paragraph 453(2)(b) of the Act. |
| CONDITIONS | |
| Limits on investments | 3. A company shall not, by way of specialized
financing activities, acquire control of, or hold, acquire or increase
a substantial investment in, (a) an entity referred to in any of paragraphs 453(1)(a) to (j) of the Act; (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer's acquisition of a motor vehicle; (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer's acquisition of the property; or (d) an entity that acts as an insurance broker or agent in Canada. |
| Length of investment | 4. A company shall not, by way of specialized financing activities, hold control of, or hold a substantial investment in, an entity for more than 13 consecutive years. |
| Maximum authorized investment | 5. A company shall not, by way of specialized financing activities, acquire control of, or hold, acquire or increase a substantial investment in, an entity if the aggregate book value of the shares and ownership interests that the company, any subsidiary of the company and any specialized financing entity of the company hold or would hold in the entity is more than $250 million. |
| Limit of 10% of regulatory capital |
6. A company shall not, by way of specialized
financing activities, acquire control of, or hold, acquire or increase
a substantial investment in, an entity if the sum of the following
exceeds 10% of the company's regulatory capital: (a) the aggregate book value of the shares and ownership interests that the company and its subsidiaries, whether individually or jointly, would hold in the entity, (b) the aggregate value of outstanding loans made by the company and its subsidiaries, whether individually or jointly, to the specialized financing entities of the company, and (c) the aggregate book value of the shares and ownership interests held by the company and its subsidiaries, whether individually or jointly, in the specialized financing entities of the company, in the entities controlled by the company by way of specialized financing activities, and in the entities in which the company holds a substantial investment by way of specialized financing activities. |
| Limit of 25% of regulatory capital — investment in a specialized financing entity |
7. (1) A company shall not, by way of specialized
financing activities, acquire control of, or hold, acquire or increase
a substantial investment in, an entity controlled by a specialized
financing entity of the company or an entity in which the specialized
financing entity of the company holds a substantial investment, if
the sum of the following exceeds or would exceed 25% of the company's
regulatory capital: (a) the aggregate book value of the shares and ownership interests held by the company and its subsidiaries, whether individually or jointly, in the specialized financing entity of the company, in the entities controlled by the specialized financing entity of the company and in the entities in which that specialized financing entity holds a substantial investment, and (b) the aggregate value of outstanding loans that the company and its subsidiaries, whether individually or jointly, have made to the specialized financing entity of the company, to the entities controlled by the specialized financing entity of the company and to the entities in which that specialized financing entity holds a substantial investment. |
| Limit of 25% of regulatory capital — investment in an entity |
(2) A company shall not, by way of specialized financing activities,
acquire control of, or hold, acquire or increase a substantial investment
in, an entity, other than by way of an investment of a specialized
financing entity controlled by the company, if the sum of the following
exceeds 25% of the company's regulatory capital: (a) the aggregate book value of the shares and ownership interests that the company and its subsidiaries, whether individually or jointly, would hold in the entity, (b) the aggregate book value of the shares and ownership interests held by the company and its subsidiaries, whether individually or jointly, in the entities controlled by the company by way of specialized financing activities and in the entities in which the company holds a substantial investment by way of specialized financing activities, other than entities that the company has acquired control of, or a substantial investment in, by way of an investment of a specialized financing entity of the company, and (c) the aggregate value of outstanding loans that the company and its subsidiaries, whether individually or jointly, have made to the entities controlled by the company by way of specialized financing activities and to the entities in which the company holds a substantial investment by way of specialized financing activities, other than entities that the company has acquired control of, or a substantial investment in, by way of an investment of a specialized financing entity of the company. |
| ACQUISITION OF SPECIALIZED FINANCING ENTITIES | |
| Definition of "non-controlling interest" |
8. (1) In this section, "non-controlling interest" means an equity interest, in a specialized financing entity of the company controlled by a specialized financing entity, that is held by a person other than the company or an entity controlled by the company. |
| Ownership restrictions | (2) A company shall not acquire or hold control of, or hold,
acquire or increase a substantial investment in, a specialized financing
entity if (a) the value of the outstanding debt obligations, other than those payable to the company or to entities controlled by the company, of the specialized financing entity and any specialized financing entity of the company controlled by the specialized financing entity, as reported on their respective balance sheets on an unconsolidated basis, exceeds twice the value of the sum of the following, namely
(c) the aggregate book value of the shares and ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the company that it controls, that the company, the specialized financing entity, the subsidiaries of the company and the other specialized financing entities of the company hold, or would hold, in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million; (d) the sum of the values under paragraphs 6(a) to (c) exceeds or would exceed 10% of the company's regulatory capital; or (e) the sum of the values under paragraphs 7(1)(a) and (b) exceeds or would exceed 25% of the company's regulatory capital. |
| 13 year limit | (3) A company shall not hold control of, or a substantial investment
in, a specialized financing entity of the company if either the specialized
financing entity of the company or the specialized financing entity
of the company and one or more of the following entities, one after
another, have held control of, or a substantial investment in, an
entity, other than an entity described in subsection (4), for more
than 13 consecutive years: (a) the company; or (b) any other specialized financing entity of the company. |
| Exception | (4) A specialized financing entity of the company controlled by the specialized financing entity of the company shall not be considered for the purpose of subsection (3). |
| Prior periods not included | (5) If a specialized financing entity of the company held control of, or a substantial investment in, an entity for a period before becoming the specialized financing entity of the company, that period shall not be considered for the purpose of subsection (3). |
| Control not required | 9. Subsection 453(4) of the Act does not apply to a company's acquisition or increase of a substantial investment in an entity by way of specialized financing activities in accordance with these Regulations. |
| Approvals not required | 10. Subsections 453(5) and (6) of the Act do not apply to a company's acquisition of control of, or its acquisition or increase of a substantial investment in, an entity by way of specialized financing activities in accordance with these Regulations. |
| REPEAL | |
| Repeal | 11. The Specialized Financing Corporation (Trust and Loan Companies) Regulations(see footnote 1) are repealed. |
| COMING INTO FORCE | |
| Coming into force | 12. These Regulations come into force on the day on which sections 452, 459 and 531 of the Trust and Loan Companies Act, as enacted by sections 550 and 569 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, come into force. |
| [31-1-o] |
Specialized Financing (Foreign Banks) Regulations
Statutory Authority
Bank Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
| definitions | SPECIALIZED FINANCING (FOREIGN BANKS) REGULATIONS |
|---|---|
| INTERPRETATION | |
| Definitions |
1. (1) The following definitions apply in these Regulations. |
| "Act" « Loi » |
"Act" means the Bank Act. |
| "book value" « valeur comptable » |
"book value", in respect of the shares and ownership interests held by an entity, means the book value reported on the entity's balance sheet on an unconsolidated basis. |
| "specialized financing entity of an entity associated with a foreign bank" « entité s'occupant de financement spécial d'une entité liée à une banque étrangère » |
"specialized financing entity of an entity associated with a foreign bank"
means a specialized financing entity that is controlled by an entity
associated with a foreign bank or in which an entity associated with
a foreign bank has a substantial investment. |
| "specialized financing entity of a foreign bank" « entité d'une banque étrangère s'occupant de financement spécial » |
"specialized financing entity of a foreign bank" means a specialized financing entity that is controlled by a foreign bank or in which a foreign bank has a substantial investment. |
| Meaning of "specialized financing entity" | (2) In these Regulations and for the purpose of the definition "specialized financing entity" in subsection 507(1) of the Act, "specialized financing entity" means a Canadian entity that acquires or holds shares of, or ownership interests in, entities that a bank may acquire control of, or hold, acquire or increase a substantial investment in, under subsection 466(4) of the Act. |
| GENERAL | |
| Prescribed Canadian entity | 2. For the purpose of subsection 522.11(1) of the Act, a specialized financing entity is a prescribed Canadian entity. |
| ACQUISITION OF SPECIALIZED FINANCING ENTITY |
|
| Ownership restrictions — foreign banks | 3. (1) A foreign bank shall not acquire or hold control of, or a substantial investment in, a specialized financing entity if (a) the aggregate book value of the shares and the ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the foreign bank that it controls, that the following entities hold or would hold in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million, namely,
|
| 13 year limit | (2) A foreign bank shall not hold control of, or a substantial investment in, a specialized financing entity of the foreign bank if either the specialized financing entity of the foreign bank or the specialized financing entity of the foreign bank and one or more of the following entities, one after another, have held control of, or a substantial investment in, an entity, other than an entity described in subsection (3), for more than 13 consecutive years: (a) the foreign bank; (b) an entity associated with the foreign bank; (c) any other specialized financing entity of the foreign bank; or (d) a specialized financing entity of an entity associated with the foreign bank. |
| Exception | (3) A specialized financing entity of the foreign bank controlled by the specialized financing entity of the foreign bank shall not be considered for the purpose of subsection (2). |
| Prior periods not included | (4) If a specialized financing entity of the foreign bank or an entity referred to in any of paragraphs (2)(a) to (d) held control of, or a substantial investment in, an entity for a period before becoming that entity, that period shall not be considered for the purpose of subsection (2). |
| Ownership restrictions — entities associated with foreign banks | 4. (1) An entity associated with a foreign bank shall not acquire or hold control of, or a substantial investment in, a specialized financing entity if (a) the aggregate book value of the shares and the ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the entity associated with the foreign bank that it controls, that the following entities hold or would hold in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million, namely,
|
| 13 year limit | (2) An entity associated with a foreign bank shall not hold control of, or a substantial investment in, a specialized financing entity of the entity associated with the foreign bank if either the specialized financing entity of the entity associated with the foreign bank or the specialized financing entity of the entity associated with the foreign bank and one or more of the following entities, one after another, have held control of, or a substantial investment in, an entity, other than an entity described in subsection (3), for more than 13 consecutive years: (a) the foreign bank; (b) the entity associated with the foreign bank; (c) any other entity associated with the foreign bank; (d) any specialized financing entity of the foreign bank; (e) any other specialized financing entity of the entity associated with the foreign bank; or (f) a specialized financing entity of any other entity associated with the foreign bank. |
| Exception | (3) A specialized financing entity of the entity associated with the foreign bank controlled by the specialized financing entity of the entity associated with the foreign bank shall not be considered for the purpose of subsection (2). |
| Prior periods not included | (4) If a specialized financing entity of the entity associated with the foreign bank or an entity referred to in any of paragraphs (2)(a) to (f) held control of, or a substantial investment in, an entity for a period before becoming that entity, that period shall not be considered for the purpose of subsection (2). |
| COMING INTO FORCE | |
| Coming into force | 5. These Regulations come into force on the day on which sections 522.11, 522.23 and 978 of the Bank Act, as enacted by sections 132 and 183 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, come into force. |
| [31-1-o] |
Subsidiaries that Hold Bank Holding Company Shares Regulations
Statutory Authority
Bank Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
| definitions | SUBSIDIARIES THAT HOLD BANK HOLDING COMPANY SHARES REGULATIONS |
|---|---|
| INTERPRETATION | |
| Definitions |
1. The following definitions apply in these Regulations. |
| "Act" « Loi » |
"Act" means the Bank Act. |
| "distribution" « mise en circulation » |
"distribution" means (a) a trade by or on behalf of a bank holding company in securities of the bank holding company that have not previously been issued; or (b) a trade in previously issued securities of a bank holding company from the holdings of any person or group of persons who act in concert and who hold in excess of 10 % of the shares of any class of voting shares of the bank holding company. |
| "regulated securities entity" « entité de valeurs mobilières réglementée » |
"regulated securities entity" means a financial institution whose primary business is dealing in securities and that is regulated in its securities dealings by an Act of Parliament or of the legislature of a province or by the laws of a foreign country. |
| HOLDING OF BANK HOLDING COMPANY'S SHARES BY SUBSIDIARY | |
| Where subsidiary may hold shares | 2. For the purpose of paragraph 714(c) of the Act, a bank holding company may, subject to section 3, permit a subsidiary of the bank holding company that is a regulated securities entity to hold shares of the bank holding company if the aggregate value of shares of the bank holding company held by all subsidiaries of the bank holding company that are regulated securities entities, other than shares referred to in section 716 of the Act, does not exceed 1% of the regulatory capital of the bank holding company. |
| Exception for securities underwriter |
3. If a subsidiary of a bank holding company is a regulated securities entity and is acting as a securities underwriter in connection with a distribution of shares of the bank holding company, the bank holding company may permit the subsidiary to hold shares of the bank holding company in excess of the limit set out in section 2 until the distribution is ended. |
| COMING INTO FORCE | |
| Coming into force | 4. These Regulations come into force on the day on which section 714 of the Bank Act as enacted by section 183 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force. |
| [31-1-o] |
Subsidiaries that Hold Insurance Holding Company Shares Regulations
Statutory Authority
Insurance Companies Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
| definitions | SUBSIDIARIES THAT HOLD INSURANCE HOLDING COMPANY SHARES REGULATIONS |
|---|---|
| INTERPRETATION | |
| Definitions |
1. The following definitions apply in these Regulations. |
| "Act" « Loi » |
"Act" means the Insurance Companies Act. |
| "distribution" « mise en circulation » |
"distribution" means (a) a trade by or on behalf of an insurance holding company in securities of the insurance holding company that have not previously been issued; or (b) a trade in previously issued securities of an insurance holding company from the holdings of any person or group of persons who act in concert and who hold in excess of 10 % of the shares of any class of voting shares of the insurance holding company. |
| "regulated securities entity" « entité de valeurs mobilières réglementée » |
"regulated securities entity" means a financial institution whose primary business is dealing in securities and that is regulated in its securities dealings by an Act of Parliament or of the legislature of a province or by the laws of a foreign country. |
| HOLDING OF INSURANCE HOLDING COMPANY'S SHARES BY SUBSIDIARY | |
| Where subsidiary may hold shares | 2. For the purpose of paragraph 753(c) of the Act, an insurance holding company may, subject to subsection 3, permit a subsidiary of the insurance holding company that is a regulated securities entity to hold shares of the insurance holding company if the aggregate value of shares of the insurance holding company held by all subsidiaries of the insurance holding company that are regulated securities entities, other than shares referred to in section 755 of the Act, does not exceed 1% of the regulatory capital of the insurance holding company. |
| Exception for securities underwriter | 3. If a subsidiary of an insurance holding company is a regulated securities entity and is acting as a securities underwriter in connection with a distribution of shares of the insurance holding company, the insurance holding company may permit the subsidiary to hold shares of the insurance holding company in excess of the limit set out in section 2 until the distribution is ended. |
| COMING INTO FORCE | |
| Coming into force | 4. These Regulations come into force on the day on which section 753 of the Insurance Companies Act as enacted by section 465 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force. |
| [31-1-o] |
Total Assets for Public Holding Requirements (Trust and Loan Companies) Regulations
Statutory Authority
Trust and Loan Companies Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
| definitions | TOTAL ASSETS FOR PUBLIC HOLDING REQUIREMENTS (TRUST AND LOAN COMPANIES) REGULATIONS |
|---|---|
| TOTAL ASSETS | |
| Definition of "total assets" | 1. For the purpose of subsection 380(3) of the Trust and Loan Companies Act, "total assets", in respect of a company, at a particular time, means the total value of the assets that would be reported on its balance sheet, prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 313(4) of that Act. |
| COMING INTO FORCE | |
| Coming into force | 2. These Regulations come into force on the day on which section 3 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force. |
| [31-1-o] |
Total Assets for Supervisability and Public Holding Requirements (Banks and Bank Holding Companies) Regulations
Statutory Authority
Bank Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
definition |
TOTAL ASSETS FOR SUPERVISABILITY AND PUBLIC HOLDING REQUIREMENTS (BANKS AND BANK HOLDING COMPANIES) REGULATIONS |
|---|---|
| TOTAL ASSETS | |
| Definition of "total assets" | 1. For the purposes of subsections 54.1(4), 386(3) and 895(3) of the Bank Act, "total assets", in respect of a bank or a bank holding company, at a particular time, means the total value of the assets that would be reported on its balance sheet, prepared as at that time in accordance with the accounting principles and specifications of the Superintendant referred to in subsection 308(4) or 840(4), as the case may be, of that Act. |
| REPEAL | |
| Repeal | 2. The Total Assets (Banks) Regulations(see footnote 2) are repealed. |
| COMING INTO FORCE | |
| Coming into force | 3. These Regulations come into force on the day on which subsection 54.1(4) of the Bank Act, as enacted by section 57 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force. |
| [31-1-o] |
Total Assets for Supervisability and Public Holding Requirements (Insurance Companies and Insurance Holding Companies) Regulations
Statutory Authority
Insurance Companies Act
Sponsoring Department
Department of Finance
REGULATORY IMPACT ANALYSIS STATEMENT
For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.
PROPOSED REGULATORY TEXT
For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.
| definitions | TOTAL ASSETS FOR SUPERVISABILITY AND PUBLIC HOLDING REQUIREMENTS (INSURANCE COMPANIES AND INSURANCE HOLDING COMPANIES) REGULATIONS |
|---|---|
| TOTAL ASSETS | |
| Definition of "total assets" | 1. For the purpose of the definition "total assets" in subsection 2(1) of the Insurance Companies Act, as it applies in sections 59.1, 412 and 939 of that Act, "total assets", in respect of a company or an insurance holding company, at a particular time, means the total value of the assets that would be reported on its balance sheet, prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) or 887(4), as the case may be, of that Act. |
| REPEAL | |
| Repeal | 2. The Total Assets (Canadian Companies and Societies) Regulations(see footnote 3) are repealed. |
| COMING INTO FORCE | |
| Coming into force | 3. These Regulations come into force on the day on which subsection 2(1) of the Insurance Companies Act, as enacted by section 345 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force. |
| [31-1-o] |
SOR/92-351
SOR/92-303
SOR/92-304
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