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(d) all interests of the bank holding
company in real property referred to in
subparagraph (a)(iii)
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exceeds, or the acquisition or the making of
the improvement would cause that aggregate
value to exceed, the prescribed percentage of
the regulatory capital of the bank holding
company.
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Miscellaneous
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| Regulations
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941. For the purposes of this Division, the
Governor in Council may make regulations
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(a) defining the interests of a bank holding
company in real property;
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(b) determining the method of valuing those
interests; or
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(c) exempting classes of bank holding
companies from the application of sections
937 to 940.
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| Divestment
order
|
942. (1) The Superintendent may, by order,
direct a bank holding company to dispose of,
within any period that the Superintendent
considers reasonable, any loan, investment or
interest made or acquired in contravention of
this Division.
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| Divestment
order
|
(2) If, in the opinion of the Superintendent,
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(a) an investment by a bank holding
company or any entity it controls in shares
of a body corporate or in ownership
interests in an unincorporated entity
enables the bank holding company to
control the body corporate or the
unincorporated entity, or
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(b) the bank holding company or any entity
it controls has entered into an arrangement
whereby it or its nominee may veto any
proposal put before
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(i) the board of directors of a body
corporate, or
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(ii) a similar group or committee of an
unincorporated entity,
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or whereby no proposal may be approved
except with the consent of the bank holding
company, the entity it controls or the
nominee,
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the Superintendent may, by order, require the
bank holding company, within any period that
the Superintendent considers reasonable, to
do all things necessary to ensure that the bank
holding company no longer controls the body
corporate or unincorporated entity or has the
ability to veto or otherwise defeat any
proposal referred to in paragraph (b).
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| Divestment
order
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(3) If
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(a) a bank holding company
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(i) fails to provide or obtain within a
reasonable time the undertakings
referred to in subsection 932(1), (2) or
(4), or
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(ii) is in default of an undertaking
referred to in subsection 932(1) or (2) and
the default is not remedied within ninety
days after the day of receipt by the bank
holding company of a notice from the
Superintendent of the default, or
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(b) a permitted entity referred to in
subsection 932(4) is in default of an
undertaking referred to in subsection 932(4)
and the default is not remedied within
ninety days after the day of receipt by the
bank holding company of a notice from the
Superintendent of the default,
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the Superintendent may, by order, require the
bank holding company, within any period that
the Superintendent considers reasonable, to
do all things necessary to ensure that the bank
holding company no longer has a substantial
investment in the entity to which the
undertaking relates.
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| Exception
|
(4) Subsection (2) does not apply in respect
of an entity in which a bank holding company
has a substantial investment permitted by this
Division.
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| Deemed
temporary
investment
|
943. If a bank holding company controls or
has a substantial investment in an entity as
permitted by this Division and the bank
holding company becomes aware of a change
in the business or affairs of the entity that, if
the change had taken place before the
acquisition of control or of the substantial
investment, would have caused the entity not
to be a permitted entity or would have been
such that approval for the acquisition would
have been required under subsection 930(5) or
(6), the bank holding company is deemed to
have acquired, on the day the bank holding
company becomes aware of the change, a
temporary investment in respect of which
section 933 applies.
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| Asset
transactions
|
944. (1) A bank holding company shall not,
and shall not permit its subsidiaries to, without
the approval of the Superintendent, acquire
assets from a person or transfer assets to a
person if
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A + B > C
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where
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A is the value of the assets;
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B is the total value of all assets that the bank
holding company and its subsidiaries
acquired from or transferred to that person
in the twelve months ending immediately
before the acquisition or transfer; and
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C is ten per cent of the total value of the
assets of the bank holding company, as
shown in the last annual statement of the
bank holding company prepared before
the acquisition or transfer.
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| Exception
|
(2) The prohibition in subsection (1) does
not apply in respect of
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(a) assets that are debt obligations that are
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(i) guaranteed by any financial
institution,
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(ii) fully secured by deposits with any
financial institution, or
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(iii) fully secured by debt obligations that
are guaranteed by any financial
institution;
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(b) assets that are debt obligations issued
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(i) by, or by any agency of,
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(A) the Government of Canada,
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(B) the government of a province,
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(D) the government of a foreign
country or any political subdivision of
a foreign country, or
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(ii) by a prescribed international agency;
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(c) assets that are debt obligations that are
guaranteed by, or fully secured by securities
issued by, a government, a municipality or
an agency referred to in paragraph (b);
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(d) assets that are debt obligations that are
widely distributed, as that expression is
defined by the regulations;
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(e) assets that are debt obligations of an
entity controlled by the bank holding
company; or
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(f) a transaction or series of transactions by
a subsidiary of the bank holding company
with a financial institution as a result of the
subsidiary's participation in one or more
syndicated loans with that financial
institution.
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| Exception
|
(3) The approval of the Superintendent is
not required if
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(a) the bank holding company or its
subsidiary acquires shares of, or ownership
interests in, an entity for which the approval
of the Minister under Division 7 or
subsection 930(5) is required or the
approval of the Superintendent under
subsection 930(6) is required; or
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(b) the transaction has been approved by the
Minister under subsection 678(1) of this
Act or subsection 715(1) of the Insurance
Companies Act.
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| Value of
assets
|
(4) For the purposes of ``A'' in subsection
(1), the value of the assets is
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(a) in the case of assets that are acquired, the
purchase price of the assets or, if the assets
are shares of, or ownership interests in, an
entity the assets of which will be included
in the annual statement of the bank holding
company after the acquisition, the fair
market value of the assets; and
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(b) in the case of assets that are transferred,
the book value of the assets as stated in the
last annual statement of the bank holding
company prepared before the transfer, or if
the assets are shares of, or ownership
interests in, an entity the assets of which
were included in the last annual statement
of the bank holding company before the
transfer, the value of the assets as stated in
the annual statement.
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| Total value of
all assets
|
(5) For the purposes of subsection (1), the
total value of all assets that the bank holding
company or any of its subsidiaries has
acquired during the period of twelve months
referred to in subsection (1) is the purchase
price of the assets or, if the assets are shares of,
or ownership interests in, an entity the assets
of which immediately after the acquisition
were included in the annual statement of the
bank holding company, the fair market value
of the assets of the entity at the date of the
acquisition.
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| Total value of
all assets
|
(6) For the purposes of subsection (1), the
total value of all assets that the bank holding
company or any of its subsidiaries has
transferred during the period of twelve months
referred to in subsection (1) is the book value
of the assets as stated in the last annual
statement of the bank holding company
prepared before the transfer, or if the assets are
shares of, or ownership interests in, an entity
the assets of which were included in the last
annual statement of the bank holding
company before the transfer, the value of the
assets of the entity as stated in the annual
statement.
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| Transitional
|
945. Nothing in this Division requires
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(a) the termination of a loan made before
February 7, 2001;
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(b) the termination of a loan made after that
date as a result of a commitment made
before that date;
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(c) the disposal of an investment made
before that date; or
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(d) the disposal of an investment made after
that date as a result of a commitment made
before that date.
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But if the loan or investment would be
precluded or limited by this Division, the
amount of the loan or investment may not be
increased after that date.
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| Saving
|
946. A loan or investment referred to in
section 945 is deemed not to be prohibited by
the provisions of this Division.
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| Meaning of
``non-bank
entity''
|
947. (1) Subject to subsection (2), for the
purpose of section 948 ``non-bank entity''
means a Canadian entity, other than a bank,
that is controlled by a bank holding company
or in which a bank holding company has a
substantial investment.
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| Exception
|
(2) A Canadian entity is not a non-bank
entity by reason only that a subsidiary of a
bank holding company that is a bank controls,
or has a substantial investment in, the
Canadian entity.
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|
| Prohibited
activities
|
948. (1) A non-bank entity shall not, in
Canada,
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(a) engage in the business of accepting
deposit liabilities; or
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|
(b) represent to the public that any
instrument issued by the non-bank entity is
a deposit or that any liability incurred by the
non-bank entity is a deposit.
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| Disclosure of
status
|
(2) A non-bank entity that carries on as part
of its business the provision of financial
services shall not borrow money in Canada
from the public without disclosing that
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(a) the non-bank entity is not a member
institution of the Canada Deposit Insurance
Corporation;
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(b) the liability incurred by the non-bank
entity through the borrowing is not a
deposit; and
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|
(c) the non-bank entity is not regulated as a
financial institution in Canada.
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| Manner of
disclosure
|
(3) The disclosure shall be
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(a) in a prospectus, information circular or
other offering document related to the
borrowing or in a similar document related
to the borrowing or, if there is no such
document, in a statement delivered to the
lender; or
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|
(b) in any other manner that may be
prescribed.
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|
| Exception for
certain
borrowings
|
(4) Subsection (2) does not apply
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|
(a) to a borrowing of a prescribed class or
type or to a borrowing in prescribed
circumstances or in a prescribed manner; or
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|
(b) except as may be provided in any
regulations, to a borrowing
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(i) from a person in an amount of
$150,000 or more, or
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(ii) through the issue of instruments in
denominations of $150,000 or more.
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| Exception
|
(5) Subsections (1) and (2) do not apply if
the non-bank entity is
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|
(a) a trust or loan corporation incorporated
under an Act of Parliament or of the
legislature of a province;
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|
(b) an entity referred to in paragraph
930(1)(d) or (h); or
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| Exception
|
(6) Subsection (2) does not apply if the
non-bank entity is
|
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|
(a) an insurance company incorporated
under an Act of Parliament or of the
legislature of a province;
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|
(b) a bank holding company or an insurance
holding company;
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|
(c) an entity that is controlled by an
insurance holding company or in which an
insurance holding company has a
substantial investment;
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|
(d) a financial institution that is described in
paragraph (g) of the definition ``financial
institution'' in section 2; or
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