Giving up control

(10) A company that, under subsection (4), controls an entity may give up control of the entity while keeping a substantial investment in the entity if

    (a) the company is permitted to do so by regulations made under paragraph 459(c); and

    (b) the company has the prior written approval of the Superintendent.

Subsections do not apply

(11) If a company controls, within the meaning of paragraph 3(1)(a), an entity, subsections (5) and (6) do not apply in respect of any subsequent increases by the company of its substantial investment in the entity so long as the company continues to control the entity.

Approval for indirect investments

454. (1) If a company obtains the approval of the Minister under subsection 453(5) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase, the company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Minister under subsection 453(5) or the Superintendent under subsection 453(6) and that indirect acquisition or increase is disclosed to the Minister in writing before the approval is obtained, the company is deemed to have obtained the approval of the Minister or the Superintendent for that indirect acquisition or increase.

Approval for indirect investments

(2) If a company obtains the approval of the Superintendent under subsection 453(6) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase the company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Superintendent under that subsection and that indirect acquisition or increase is disclosed to the Superintendent in writing before the approval is obtained, the company is deemed to have obtained the approval of the Superintendent for that indirect acquisition or increase.

Undertakings

455. (1) If a company controls a permitted entity, other than an entity referred to in any of paragraphs 453(1)(a) to (f) , the company shall provide the Superintendent with any undertakings that the Superintendent may require regarding

    (a) the activities of the entity ; and

    (b) access to information about the entity .

Undertakings

(2) If a company acquires control of an entity referred to in any of paragraphs 453(1)(g) to (j) , the company shall provide the Superintendent with any undertakings concerning the entity that the Superintendent may require.

Agreements with other jurisdictions

(3) The Superintendent may enter into an agreement with the appropriate official or public body responsible for the supervision of an entity referred to in any of paragraphs 453(1)(g) to (j ) in each province or in any other jurisdiction concerning any matters referred to in paragraphs (1)(a) and (b) or any other matter the Superintendent considers appropriate.

Access to records

(4) Despite any other provision of this Part, a company shall not control a permitted entity, other than an entity referred to in any of paragraphs 453(1)(a) to (f) , unless the company obtains from the permitted entity an undertaking to provide the Superintendent with reasonable access to the records of the permitted entity in the course of the acquisition of control or within a reasonable time after control is acquired .

Exceptions and Exclusions

Temporary investments in entity

456. (1) Subject to subsection (4) , a company may, by way of a temporary investment, acquire control of, or acquire or increase a substantial investment in, an entity but , within two years, or any other period that may be specified or approved by the Superintendent, after acquiring control or after acquiring or increasing the substantial investment, as the case may be, it shall do all things necessary to ensure that it no longer controls the entity or has a substantial investment in the entity .

Transitional

(2) Despite subsection (1), if a company that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the company subsequently increases that substantial investment by way of a temporary investment, the company shall, within two years, or any other period that is specified or approved by the Superintendent, after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990.

Extension

(3) The Superintendent may, in the case of any particular company that makes an application under this subsection , extend the period of two years, or the other period specified or approved by the Superintendent, that is referred to in subsections (1) or (2) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

Temporary investment

(4) If a company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister under subsection 453(5) is required, the company must, within 90 days after acquiring control or after acquiring or increasing the substantial investment,

    (a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or

    (b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity.

Indetermi-
nate extension

(5) If a company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Superintendent under subsection 453(6) is required, the Superintendent may, in the case of any particular company that makes an application under this subsection, permit the company to retain control of the entity or to continue to hold the substantial investment in the entity for an indeterminate period, on any terms and conditions that the Superintendent considers necessary.

Loan workouts

457. (1) Despite anything in this Part, if a company or any of its subsidiaries has made a loan to an entity and, under the terms of the agreement between the company, or any of its subsidiaries , and the entity with respect to the loan and any other documents governing the terms of the loan, a default has occurred, the company may acquire

    (a) if the entity is a body corporate, all or any of the shares of the body corporate;

    (b) if the entity is an unincorporated entity, all or any of the ownership interests in the entity;

    (c) all or any of the shares or all or any of the ownership interests in any entity that is an affiliate of the entity; or

    (d) all or any of the shares of a body corporate that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates.

Obligation of company

(2) If a company acquires shares or ownership interests in an entity under subsection (1) , the company shall, within five years after acquiring them do all things necessary to ensure that the company does not control the entity or have a substantial investment in the entity.

Transitional

(3) Despite subsection (1), if a company that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the company later increases that substantial investment by way of an investment made under subsection (1), the company shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990.

Extension

(4) The Superintendent may, in the case of any particular company that makes an application under this subsection , extend the period of five years referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

Exception - entities controlled by foreign governments

(5) Despite anything in this Part, if a company has made a loan to, or holds a debt obligation of, the government of a foreign country or an entity controlled by the government of a foreign country and, under the terms of the agreement between the company and that government or the entity, as the case may be, and any other documents governing the terms of the loan or debt obligation, a default has occurred, the company may acquire all or any of the shares of, or ownership interests in, that entity or in any other entity designated by that government, if the acquisition is part of a debt restructuring program of that government.

Time for holding shares

(6) If a company acquires any shares or ownership interests under subsection (5) , the company may, on any terms and conditions that the Superintendent considers appropriate, hold those shares or ownership interests for an indeterminate period or for any other period that the Superintendent may specify.

Exception

(7) If , under subsection (1), a company acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 453, the company may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3) , including any extension of it granted under subsection (4) .

Realizations

458. (1) Despite anything in this Act, a company may acquire

    (a) an investment in a body corporate,

    (b) an interest in an unincorporated entity, or

    (c) an interest in real property,

if the investment or interest is acquired through the realization of a security interest held by the company or any of its subsidiaries .

Disposition

(2) Subject to subsection 76(2), if a company acquires control of, or acquires a substantial investment in, an entity by way of the realization of a security interest held by the company or any of its subsidiaries , the company shall, within five years after the day on which control or the substantial investment is acquired, do all things necessary, or cause its subsidiary to do all things necessary, as the case may be , to ensure that the company no longer controls the entity or has a substantial investment in the entity.

Transitional

(3) Despite subsection (2), if a company that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the company later increases that substantial investment by way of a realization of a security interest under subsection (1), the company shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990.

Extension

(4) The Superintendent may, in the case of any particular company that makes an application under this subsection , extend the period of five years referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

Exception

(5) If, under subsection (1) , a company acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 453, the company may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3), including any extension of it granted under subsection (4).

Regulations restricting ownership

459. The Governor in Council may make regulations

    (a) for the purposes of subsection 453(4) , permitting the acquisition of control or the acquisition or increase of substantial investments;

    (b) prescribing the circumstances under which subsections 453(5) or (6) do not apply, or the entities in respect of which those subsections, or either of them, do not apply, including prescribing entities on the basis of the activities they engage in;

    (c) for the purposes of subsection 453(10) , permitting a company to give up control of an entity ; and

    (d) restricting the ownership by a company of shares of a body corporate or of ownership interests in an unincorporated entity under sections 453 to 458 and imposing terms and conditions applicable to companies that own such shares or interests.

Portfolio Limits

Exclusion from portfolio limits

460. (1) Subject to subsection (3), the value of all loans, investments and interests acquired by a company and any of its prescribed subsidiaries under section 457 or as a result of a realization of a security interest is not to be included in calculating the value of loans, investments and interests of the company and its prescribed subsidiaries under sections 461 to 466

    (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and

    (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property.

Extension

(2) The Superintendent may, in the case of any particular company, extend any period referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

Exception

(3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 467 to be an interest in real property and

    (a) the company or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 467 to be an interest in real property; or

    (b) the company or the subsidiary acquired the investment or interest under section 457 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 467 to be an interest in real property.

Commercial Loans

Lending limit: companies with regulatory capital of $25 million or less

461. Subject to section 462, a company that has twenty-five million dollars or less of regulatory capital shall not, and shall not permit its prescribed subsidiaries to, make or acquire a commercial loan or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the company and its prescribed subsidiaries exceeds, or the making or acquisition of the commercial loan or acquisition of control of the entity would cause the aggregate value of all commercial loans held by the company and its prescribed subsidiaries to exceed, 5 per cent of the total assets of the company.

Lending limit: regulatory capital over $25 million

462. A company that has twenty-five million dollars or less of regulatory capital that is controlled by a financial institution that has the equivalent of more than twenty-five million dollars of regulatory capital or a company that has more than twenty-five million dollars of regulatory capital may make or acquire commercial loans or acquire control of a permitted entity that holds commercial loans if the aggregate value of all commercial loans held by the company and its prescribed subsidiaries would thereby exceed the limit set out in section 461 only with the prior approval in writing of the Superintendent and in accordance with any terms and conditions that the Superintendent may specify.

Meaning of ``total assets''

463. For the purposes of sections 461 and 462, ``total assets'', in respect of a company, has the meaning given to that expression by the regulations.

Real Property

Limit on total property interest

464. A company shall not, and shall not permit its prescribed subsidiaries to, purchase or otherwise acquire an interest in real property or make an improvement to any real property in which the company or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the company in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed the prescribed percentage of the regulatory capital of the company.

Equities

Limits on equity acquisitions

465. A company shall not, and shall not permit its prescribed subsidiaries to,

    (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the company has, or by virtue of the acquisition would have, a substantial investment, or

    (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a),

if the aggregate value of

    (c) all participating shares, excluding participating shares of permitted entities in which the company has a substantial investment, and

    (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the company has a substantial investment,

beneficially owned by the company and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the company.