(a) apply to the Minister for approval to retain control of the Canadian entity or to continue to hold the substantial investment in the Canadian entity for a period specified by the Minister or for an indeterminate period; or

    (b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or holds a substantial investment in the entity.

Deemed temporary investment

(12) Where a foreign bank or an entity associated with a foreign bank holds control of, or a substantial investment in, a Canadian entity referred to in subsection (13) and the foreign bank or the entity associated with a foreign bank becomes aware of a change in the business, affairs or activities of the Canadian entity that, if the change had taken place before the acquisition of control or the substantial investment, would have caused the entity not to be a Canadian entity referred to in subsection (13) or would have been such that approval for the acquisition would have been required under any of paragraphs 518.2(1)(a) to (e) or (g), the foreign bank or the entity associated with a foreign bank is deemed to have acquired, on the day it becomes aware of the change, a temporary investment in respect of which subsections (9), (10) and (11) apply.

Canadian entity for purposes of subsection (12)

(13) Subsection (12) applies only in relation to Canadian entities in which a foreign bank is permitted to acquire a substantial investment under this section or subsection 516(1).

Acquisition by loan worked or realization of security

(14) Notwithstanding any other provision of this Part, but subject to subsections (15) and (16) and section 514, where a foreign bank, or an entity associated with a foreign bank, acquires or holds control of, or a substantial investment in, a Canadian entity

    (a) as a result of a default that has occurred pursuant to the terms of an agreement with respect to a loan made between the foreign bank, or the entity associated with a foreign bank, and the Canadian entity or any of its affiliates, or pursuant to any other documents governing the terms of the loan, or

    (b) through the realization of a security interest for any loan or advance made by the foreign bank, or the entity associated with a foreign bank, or for any other debt or liability owing to it,

it may retain the control or the substantial investment for five years, but it shall do all things necessary to ensure that, within five years after the acquisition, it no longer controls the Canadian entity or holds a substantial investment in the Canadian entity.

Extension

(15) On application by a foreign bank or an entity associated with a foreign bank, the Minister may extend the period referred to in subsection (14) by any further period or periods and subject to any terms and conditions specified by the Minister.

Exception

(16) Where a foreign bank or an entity associated with a foreign bank, under subsection (14), acquires or holds control of, or a substantial investment in, a Canadian entity for which the approval of the Minister is required under this Part, it may retain the control or the substantial investment for any period, or an indeterminate period, that is approved in writing by the Minister before the end of the period referred to in subsection (14) or any extension granted under subsection (15).

Canadian commercial entities

(17) Notwithstanding paragraph 508(1)(d), a foreign bank, or an entity associated with a foreign bank, that is referred to in subsection (2) may acquire or hold control of, or a substantial investment in, a Canadian entity referred to in subsection (18).

Permitted commercial activities

(18) Subject to subparagraph 518.2(1)(g)(i), subsection (17) applies in respect of a Canadian entity, other than a Canadian entity referred to in subsection (5) or in any of paragraphs 468(1)(a) to (i), if

    (a) the Canadian entity, in the opinion of the Minister, engages in businesses and activities that are related or incidental to commercial activities outside Canada of the foreign bank or the entity associated with a foreign bank;

    (b) all of the Canadian entity's businesses and activities, or substantially all of them as determined under the regulations, do not include any business or activity referred to in subsection (5) or (6), other than an activity referred to in paragraph 410(1)(e) or subsection 410(2); and

    (c) the Canadian entity does not engage in personal property leasing activities.

Commercial holding company

(19) Subject to subparagraph 518.2(1)(g)(ii), a Canadian entity referred to in subsection (18) may acquire or hold control of, or a substantial investment in, a Canadian entity referred to in that subsection.

Paragraphs not applicable

(20) Paragraphs 508(1)(a) and (b) do not apply to a Canadian entity acquired or held in accordance with this section.

Paragraph not applicable

(21) Subject to paragraph 518.2(1)(i), paragraph 508(1)(c) does not apply to a Canadian entity, other than one referred to in subsection (18), that is acquired or held in accordance with this section.

Canadian commercial branches

518.1 (1) Notwithstanding paragraphs 508(1)(a) and (b), a foreign bank that is referred to in subsection 518(2) - or an entity associated with a foreign bank and referred to in subsection 518(2), that is incorporated or formed by or under the laws of a country other than Canada - may, subject to paragraph 518.2(1)(h), carry on in Canada businesses and activities so long as all of its businesses and activities outside Canada, or substantially all of them as determined under the regulations, do not include personal property leasing activities or activities that are referred to in paragraphs (a) to (e), other than prescribed activities, of the definition ``Canadian financial entity'' in subsection 507(1) or - except under prescribed circumstances - those referred to in paragraph (f) of that definition.

Businesses and activities

(2) Subsection (1) applies to a foreign bank or an entity associated with a foreign bank so long as its businesses and activities in Canada do not include personal property leasing activities and

    (a) in the opinion of the Minister, its businesses and activities in Canada are related or incidental to its commercial activities outside Canada; and

    (b) all of its businesses and activities in Canada, or substantially all of them as determined under the regulations, do not include any business or activity referred to in subsection 518(5) or (6), other than an activity referred to in paragraph 410(1)(e) or subsection 410(2).

Minister's approval

518.2 (1) Subject to subsection (2) and the regulations, a foreign bank or an entity associated with a foreign bank may not, without the prior written approval of the Minister, given by order,

    (a) acquire control of a Canadian entity referred to in any of paragraphs 468(1)(g) to (i) from a person who is not a member of the foreign bank's group;

    (b) acquire control of a Canadian entity whose business includes one or more of the activities referred to in paragraph 518(5)(a) and that engages, as part of its business, in any financial intermediary activity that exposes the Canadian entity to material market or credit risk - including a finance entity - if the control is acquired from an entity referred to in any of paragraphs 468(1)(a) to (f) that is not a member of the foreign bank's group, but does not include a Canadian entity whose activities are limited to the activities of one or more of the following entities:

      (i) a factoring entity,

      (ii) a financial leasing entity, or

      (iii) a specialized financing entity;

    (c) acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes one or more of the activities referred to in paragraph 518(5)(d);

    (d) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in an activity described in paragraph 410(1)(c) or (c.1);

    (e) acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity prescribed for the purposes of paragraph 518(5)(f);

    (f) engage in a business or activity referred to in paragraph 517.1(1)(a) or (b);

    (g) acquire or hold control of, or a substantial investment in,

      (i) a Canadian entity referred to in subsection 518(18), or

      (ii) a Canadian entity referred to in subsection 518(19);

    (h) engage in a business or activity referred to in section 518.1; or

    (i) undertake an activity referred to in paragraph 517.1(2)(a) or subsection 518(21).

Approval for indirect investments

(2) If a foreign bank or an entity associated with a foreign bank

    (a) obtains the approval of the Minister under any of paragraphs (1)(a) to (e) and (g) to acquire or hold control of, or a substantial investment in, a Canadian entity, and

    (b) through that acquisition or holding, indirectly acquires control of, or a substantial investment in, another Canadian entity that would require the approval of the Minister under those paragraphs,

and that indirect acquisition is disclosed to the Minister in writing before the approval is obtained, the foreign bank or the entity associated with a foreign bank is deemed to have obtained the approval of the Minister for that indirect acquisition.

Ministerial approval of more than one entity

(3) If the Minister approves, under paragraph 518.2(1)(g), the acquisition or holding of control of, or a substantial investment in, a Canadian entity referred to in subsection 518(18) or (19) by a foreign bank, or an entity associated with a foreign bank, the Minister may also authorize the foreign bank, or entity associated with a foreign bank, at any time to acquire and hold control of, or a substantial investment in, any other Canadian entity referred to in either of those subsections that engages in activities that are substantially the same as those engaged in by the Canadian entity in respect of which the approval was given.

Substantial investment by underwriter

(4) Nothing in this Part precludes a foreign bank or an entity associated with a foreign bank from acquiring a substantial investment in a Canadian entity if the substantial investment is acquired, in the course of a distribution to the public of shares or ownership interests in the Canadian entity, by a securities underwriter that is a subsidiary of the foreign bank or the entity associated with a foreign bank, provided the securities underwriter holds the substantial investment for no longer than six months.

General

Regulations

519. The Governor in Council may make regulations for the purposes of this Part and, in particular, may make regulations

    (a) concerning specialized financing, for the purposes of paragraphs 518(5)(a) and (b) and subparagraph 518(6)(c)(ii);

    (b) prescribing the circumstances under which subsection 518.2(1) does not apply, or the entities in respect of which that subsection does not apply, including prescribing entities on the basis of the activities they engage in;

    (c) restricting the ownership by foreign banks, or entities associated with foreign banks, of shares in a body corporate or of ownership interests in an unincorporated entity under subsection 513(1), (6) or (7) or section 516 or 518 and imposing terms and conditions applicable to foreign banks, or entities associated with foreign banks, that own such shares or interests;

    (d) in respect of sections 409 to 411, for the purposes of paragraph 518(5)(a) and subsections 518(7) and 518.2(1);

    (e) permitting the acquisition or holding of control or of a substantial investment, for the purposes of subparagraph 518(6)(c)(iii);

    (f) respecting the determination of the amount or value of loans, investments and interests;

    (g) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by a foreign bank, or an entity associated with a foreign bank, to or in a person and any persons connected with that person; and

    (h) specifying the classes of persons who are connected with any person for the purposes of paragraph (g).

Divestiture

520. (1) Where a foreign bank or an entity associated with a foreign bank contravenes section 517.1, 518 or 518.1 or fails to comply with any terms and conditions imposed by any order made for the purposes of those sections, the Minister may, if the Minister considers it in the public interest to do so, by order, direct the foreign bank or entity associated with a foreign bank to divest itself of the control of, or a substantial investment in, a bank or bank holding company.

Ceasing to carry on business

(2) Where an authorized foreign bank or an entity associated with an authorized foreign bank contravenes section 517.1, 518 or 518.1 or fails to comply with any terms and conditions imposed by any order made for the purposes of those sections, the Minister may, if the Minister considers it in the public interest to do so, revoke the order made under subsection 524(1).

Divestment order

(3) The Minister may, by order, direct a foreign bank or an entity associated with a foreign bank, within any period that the Minister considers reasonable, to dispose of assets used in a business or activity carried on, or to dispose of the control of an entity or a substantial investment therein acquired or held, in contravention of this Part or in contravention of any terms and conditions imposed

    (a) under subsection 521(1); or

    (b) under subsection 518(4) or 521(1.02), as it read immediately before the coming into force of this section.

Definition

521. (1) In this section, ``decision'' means an order, approval, extension or other permission or direction of or by the Minister under this Part.

Ministerial terms and condition

(2) A decision may include any terms and conditions that the Minister considers appropriate.

Effective date of decision

(3) A decision varying or revoking a previous decision takes effect three months after the day it is made, or at any other time that is agreed to by the Minister and the foreign bank, or the entity associated with a foreign bank, to which the decision relates.

Publication

(4) The Minister shall publish in the Canada Gazette a notice of the making or revocation of an order under this Part.

Statements and returns

521.1 Not later than six months after the end of its financial year, except to the extent that the Superintendent has exempted it from any of the following requirements, any foreign bank or entity associated with a foreign bank in respect of which the Minister has issued an order, approval, extension or other permission under this Part shall provide the Superintendent with

    (a) a copy of its financial statements and those of each non-bank affiliate of the foreign bank for the financial year;

    (b) a list, in a form satisfactory to the Superintendent, of businesses and activities carried on by it under sections 515.2, 517.1 and 518.1;

    (c) a list, in a form satisfactory to the Superintendent, of each non-bank affiliate of the foreign bank, with a description of the nature of the business engaged in by it; and

    (d) any other information that may be prescribed for the purposes of this section.

Notification

521.2 Within 90 days after acquiring control or a substantial investment under subsection 518(9) or (12), a foreign bank or an entity associated with a foreign bank shall notify the Superintendent of the acquisition.

Investment Canada Act

522. (1) Subject to subsection (2), the provisions of this Act apply in lieu of the provisions of the Investment Canada Act in respect of any transaction under this Part, including

    (a) the acquisition of control, within the meaning of that Act, of a bank or a bank holding company;

    (b) the establishment of a new Canadian business, within the meaning of that Act, that is a bank or a bank holding company;

    (c) the establishment of a new Canadian business, within the meaning of that Act, by a foreign bank or entity associated with a foreign bank, including the establishment of the business in Canada of an authorized foreign bank or a foreign insurance company, or a foreign securities dealer or foreign cooperative credit society that has received the approval of the Minister under paragraph 518.2(1)(f);

    (d) the acquisition of control, within the meaning of that Act, of a Canadian entity by a foreign bank or an entity associated with a foreign bank, or the establishment, directly or indirectly, of a new Canadian business, within the meaning of that Act, by a foreign bank or an entity associated with a foreign bank, whose businesses or activities in Canada consist of those referred to in paragraph 508(1)(a); and

    (e) the establishment of a new Canadian business, within the meaning of that Act, that is a representative office referred to in paragraph 509(a).

Exceptions

(2) Subsection (1) does not apply in respect of

    (a) the acquisition or holding of control of, or a substantial investment in, a Canadian entity in accordance with subsection 513(1);

    (b) the establishment of a new Canadian business, within the meaning of the Investment Canada Act, in accordance with subsection 513(2);

    (c) the acquisition of control of, or a substantial investment in, a Canadian entity other than an entity referred to in any of paragraphs 468(1)(a) to (f), by

      (i) a foreign bank that is the subject of an order under section 507.1, or

      (ii) an entity associated with a foreign bank referred to in subparagraph (i);

    (d) the establishment of a new Canadian business, within the meaning of the Investment Canada Act, in accordance with section 515.2; and

    (e) the establishment, by a foreign bank that is the subject of an order of the Minister under section 507.1 or an entity associated with such a foreign bank, of a new Canadian business within the meaning of that Act

      (i) to which any of paragraphs 508(1)(a) to (c) applies, and

      (ii) that does not relate to the establishment of a business in Canada of an authorized foreign bank or a foreign insurance company.