Manner of disclosure

(3) The disclosure shall be

    (a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

    (b) in any other manner that may be prescribed.

Exception for certain borrowing

(4) Subsection (2) does not apply

    (a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or

    (b) except as may be provided in any regulations, to a borrowing

      (i) from a person in an amount of $150,000 or more, or

      (ii) through the issue of instruments in denominations of $150,000 or more.

Non-applicati on - authorized foreign banks and foreign cooperative credit societies

(5) Subsections (1) and (2) do not apply to

    (a) a foreign bank that is an authorized foreign bank; or

    (b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society.

Non-applicati on foreign insurance company or securities dealer

(6) Subsection (2) does not apply to a foreign bank, or an entity associated with a foreign bank, that is

    (a) a foreign insurance company; or

    (b) a foreign securities dealer that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of dealing in securities.

Regulations

521. The Governor in Council may make regulations exempting any class or classes of businesses, investments, activities and branches from any of the prohibitions set out in section 510 or 518.

Permitted Canadian offices

522. A foreign bank may

    (a) with the approval of the Superintendent and

      (i) subject to any terms and conditions that are attached to the approval, and

      (ii) subject to and in accordance with rules that are prescribed in relation to the operation of representative offices and the conduct of their personnel,

    maintain representative offices in Canada that are registered with the Superintendent in the prescribed manner; and

    (b) with the approval of the Governor in Council and subject to any terms and conditions that are attached to the approval, locate its head office in Canada and, from that office, issue directions and do all other things reasonably necessary for the conduct of its banking business outside Canada.

Examination of representative offices

522.01 (1) The Superintendent shall, from time to time, make or cause to be made any examination and inquiry into the operation of any representative office of a foreign bank and the conduct of the personnel in that office that the Superintendent considers necessary for the purpose of ascertaining whether the office is being operated, and whether the personnel of the office are conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522(a).

Powers of Superintenden t

(2) For the purposes of subsection (1), the Superintendent and any person acting under the direction of the Superintendent have the same powers and obligations that the Superintendent has in relation to the examination of banks under this Act.

Cancellation of registration

522.02 The Superintendent may, by order, cancel the registration of a representative office of a foreign bank if

    (a) the foreign bank requests the Superintendent to cancel the registration; or

    (b) the Superintendent is of the opinion that the representative office is not being operated, or the personnel of that office are not conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522(a).

Business conducted from head office in Canada

522.03 (1) Subject to subsections (2) and (3), if the head office of a foreign bank is located in Canada under paragraph 522(b), the foreign bank shall not conduct any business from that office with persons resident in Canada or with Her Majesty in right of Canada or a province except for the purpose of acquiring premises, supplies, services and staff for that office.

Exception

(2) If a foreign bank, immediately before the establishment of its head office in Canada under paragraph 522(b), held deposits of, or had loans outstanding to, persons resident in Canada or Her Majesty in right of Canada or a province, the foreign bank may repay those deposits and collect those loans through the head office in Canada.

Exception

(3) If a foreign bank controlled a bank or was a major shareholder of a bank immediately before the establishment of the foreign bank's head office in Canada under paragraph 522(b), the foreign bank may continue to carry out from the head office in Canada any activities that were carried out from the head office of the foreign bank in relation to the bank before the establishment of the head office in Canada.

DIVISION 3

NO FINANCIAL ESTABLISHMENT IN CANADA

Permitted investment - foreign bank

522.04 (1) A foreign bank that does not have a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity, so long as, by virtue of the acquisition, neither the foreign bank nor any entity associated with the foreign bank controls or becomes a major owner of

    (a) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i); or

    (b) a Canadian entity that is a financial services entity.

Permitted investment - associated entity

(2) An entity that is associated with a foreign bank and that does not have a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity, so long as, by virtue of the acquisition, neither the entity nor the foreign bank, nor any other entity associated with the foreign bank, controls or becomes a major owner of

    (a) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i); or

    (b) a Canadian entity that is a financial services entity.

Permitted Canadian commercial branch

522.05 A foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that does not have a financial establishment in Canada may maintain a branch in Canada or engage in or carry on business in Canada so long as less than

    (a) the prescribed portion - or if no portion is prescribed, 10 per cent - of its business in Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of paragraphs (a) to (g) of the definition ``financial services entity'' in subsection 507(1); and

    (b) the prescribed portion - or if no portion is prescribed, 10 per cent - of its business outside Canada, determined in the prescribed manner, consists of one or more activities referred to in any of

      (i) paragraphs (a) to (g) of the definition ``financial services entity'' in subsection 507(1), and

      (ii) paragraph (h) of that definition, except under prescribed circumstances.

Permitted branches re leasing

522.06 Despite section 522.05, a foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that does not have a financial establishment in Canada and that outside Canada

    (a) engages only in the activities referred to in the definition ``leasing entity'' in subsection 507(1), or

    (b) engages only in activities other than those referred to in any of

      (i) paragraphs (a) to (g) of the definition ``financial services entity'' in subsection 507(1), and

      (ii) paragraph (h) of that definition, except under prescribed circumstances,

may in Canada engage in the activities of a leasing entity so long as it does not engage in any other activity in Canada.

DIVISION 4

FINANCIAL ESTABLISHMENT IN CANADA

Investments

Investment in a financial institution

522.07 Subject to the requirements relating to designation and approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity referred to in any of paragraphs 468(1)(a) to (i).

Permitted investments

522.08 (1) Subject to subsection (2) and the requirements relating to designation and approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity, other than an entity referred to in paragraphs 468(1)(a) to (i), whose business is limited to one or more of the following:

    (a) engaging in

      (i) any financial service activity that a bank is permitted to engage in under any of paragraphs 409(2)(a) to (d), or

      (ii) any other activity that a bank is permitted to engage in under section 410 or 411;

    (b) acquiring or holding shares of, or ownership interests in, entities that a foreign bank or an entity associated with a foreign bank is permitted to acquire or hold under this Division or Division 8, other than limited commercial entities, except in prescribed circumstances, including shares or ownership interests acquired or held in accordance with regulations made under paragraph 522.23(a) concerning specialized financing;

    (c) engaging in the provision of any services exclusively to any or all of the following, so long as the Canadian entity is providing those services to the foreign bank or to any member of the foreign bank's group, namely,

      (i) the foreign bank,

      (ii) any member of the foreign bank's group,

      (iii) any entity that is primarily engaged in the business of providing financial services,

      (iv) any entity in which an entity referred to in subparagraph (iii) has a substantial investment and that is

        (A) an entity in which a bank is permitted to acquire a substantial investment under section 468,

        (B) an entity in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment under this section and section 522.07, or

        (C) a prescribed entity, or

      (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;

    (d) engaging in any activity that a bank is permitted to engage in - or in any other prescribed activity -, other than an activity referred to in paragraph (a) or (e), that relates to

      (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the foreign bank or by any member of the foreign bank's group, or

      (ii) if a significant portion of the business of the Canadian entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services;

    (e) engaging in the activities referred to in the definition ``mutual fund entity'', ``mutual fund distribution entity'' or ``real property brokerage entity'' in subsection 464(1); and

    (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.

Additional restriction

(2) A foreign bank or an entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes any activity referred to in any of paragraphs (1)(a) to (e) if the activities of the Canadian entity include

    (a) activities that a bank is not permitted to engage in under section 412, 417 or 418;

    (b) dealing in securities, except as may be permitted under paragraph (1)(e) or as may be permitted to a bank under paragraph 409(2)(c);

    (c) activities that a bank is not permitted to engage in under section 416, if the Canadian entity engages in the activities of a finance entity or of any other entity as may be prescribed;

    (d) acquiring or holding control of, or a substantial investment in, another Canadian entity unless

      (i) in the case of a Canadian entity that is controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section, section 522.07, any of paragraphs 522.1(a) to (d) or Division 8, or

      (ii) in the case of a Canadian entity that is not controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section, section 522.07, paragraph 522.1(a), (c) or (d) or Division 8; or

    (e) any prescribed activity.

Investment in a limited commercial entity

522.09 Subject to the requirements relating to approval and designation set out in Division 5, a foreign bank or an entity associated with a foreign bank that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity that is not

    (a) an entity referred to in any of paragraphs 468(1)(a) to (i), or

    (b) a Canadian entity that engages in more than the prescribed portion of - or if no portion is prescribed, 10 per cent of - the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition ``financial services entity'' in subsection 507(1), determined in the prescribed manner,

if the Canadian entity does not engage in any leasing activities and, in the opinion of the Minister, engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or the entity associated with a foreign bank.

Acquisition of other investments

522.1 A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity

    (a) by way of an investment permitted by any of sections 522.11 to 522.13;

    (b) by way of a temporary investment permitted by section 522.14;

    (c) as a result of a default that has occurred under the terms of an agreement with respect to a loan or under any other documents governing the terms of a loan, as permitted by section 522.15; or

    (d) through a realization of security, as permitted by section 522.15.

Indirect investments through federal institutions

522.11 (1) A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity by way of

    (a) an acquisition or holding of the control of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f), or of a prescribed Canadian entity, that controls or has a substantial investment in the Canadian entity; or