|
|
(c) a widely held insurance holding
company that controls, within the meaning
of paragraph 3(1)(d), the particular
company in the circumstances referred to in
subsection (6) is deemed, as of the effective
date of the order, to no longer be an
insurance holding company to which
subsection (6) applies.
|
|
| Deeming
|
(18) For the purposes of this Act, after the
day that is two years after December 31, 1999,
|
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|
|
(a) a converted company having an
aggregate of surplus and minority interests
in an amount that is one billion dollars or
more but less than five billion dollars,
according to its last annual statement dated
before the effective date of the letters patent
of conversion of the converted company is
deemed to no longer be a company in
respect of which subsection (11) applies;
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|
|
(b) a company that controls, within the
meaning of paragraph 3(1)(d), a converted
company referred to in paragraph (a) in the
circumstances referred to in subsection (12)
is deemed to no longer be a company to
which subsection (12) applies; and
|
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|
|
(c) an insurance holding company that
controls, within the meaning of paragraph
3(1)(d), a converted company referred to in
paragraph (a) in the circumstances referred
to in subsection (13) is deemed to no longer
be an insurance holding company to which
subsection (13) applies.
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|
|
|
402. The Act is amended by adding the
following after section 407:
|
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| Life
companies -
major
shareholder
|
407.01 (1) If a converted company in
respect of which subsection 407(4) applies or
a company to which subsection 407(5) applies
controls a life company and a person becomes
a major shareholder of the life company or of
any entity that also controls the life company,
the converted company or company, as the
case may be, must do all things necessary to
ensure that, on the day that is one year after the
person became a major shareholder of the life
company or entity that controls the life
company,
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|
|
|
(a) the converted company or the company
no longer controls the life company; or
|
|
|
|
(b) the life company or the entity that
controls the life company does not have any
major shareholder other than the converted
company or the company, as the case may
be, or any entity that the converted
company or the company controls.
|
|
| Exemption
|
(2) Subsection (1) does not apply in respect
of a life company with equity of less than two
hundred and fifty million dollars, or any other
amount that may be prescribed.
|
|
| Extension
|
(3) If general market conditions so warrant
and the Minister is satisfied that the converted
company or the company has used its best
efforts to be in compliance with subsection (1)
on the required day, the Minister may specify
a later day as the day from and after which it
must comply with that subsection.
|
|
| Life
companies -
major
shareholder
|
407.011 (1) Despite subsection 407.01(1),
if a converted company in respect of which
subsection 407(4) applies or a company to
which subsection 407(5) applies controls a life
company in respect of which subsection
407.01(1) does not apply by reason of
subsection 407.01(2) and the equity of the life
company reaches two hundred and fifty
million dollars or more or any other amount
that is prescribed and on the day the equity of
the life company reaches two hundred and
fifty million dollars or more, or the prescribed
amount, as the case may be, a person is a major
shareholder of the life company or of any
entity that also controls the life company, the
converted company or company must do all
things necessary to ensure that, on the day that
is three years after that day,
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|
|
(a) the converted company or company no
longer controls the life company; or
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|
|
(b) the life company or the entity that
controls the life company does not have any
major shareholder other than the converted
company or the company or any entity that
the converted company or company
controls.
|
|
| Extension
|
(2) If general market conditions so warrant
and the Minister is satisfied that the converted
company or the company has used its best
efforts to be in compliance with subsection (1)
on the required day, the Minister may specify
a later day as the day from and after which it
must comply with that subsection.
|
|
| Life
companies -
significant
interest
|
407.02 (1) If a converted company in
respect of which subsection 407(11) applies or
a company to which subsection 407(12)
applies controls a life company and a person
acquires a significant interest in any class of
shares of the life company or of any entity that
also controls the life company, the converted
company or company, as the case may be,
must do all things necessary to ensure that, on
the day that is one year after the person
acquired the significant interest in the class of
shares of the life company or entity that
controls the life company,
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|
|
(a) the converted company or the company
no longer controls the life company; or
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|
|
(b) no person has a significant interest in
any class of shares of the life company or
the entity that controls the life company,
other than the converted company or the
company, as the case may be, or any entity
that the converted company or the company
controls.
|
|
| Exemption
|
(2) Subsection (1) does not apply in respect
of a life company with equity of less than two
hundred and fifty million dollars, or any other
amount that may be prescribed.
|
|
| Extension
|
(3) If general market conditions so warrant
and the Minister is satisfied that the converted
company or the company has used its best
efforts to be in compliance with subsection (1)
on the required day, the Minister may specify
a later day as the day from and after which it
must comply with that subsection.
|
|
| Prohibition
against
significant
interest
|
407.03 (1) No person who has a significant
interest in any class of shares of a widely held
converted company in respect of which
subsection 407(4) applies or of a widely held
company to which subsection 407(5) applies
may have a significant interest in any class of
shares of a subsidiary of the converted
company or company, as the case may be, that
is a life company or an insurance holding
company.
|
|
| Prohibition
against
significant
interest
|
(2) No person who has a significant interest
in any class of shares of a life company may
have a significant interest in any class of
shares of
|
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|
|
(a) a widely held converted company in
respect of which subsection 407(4) applies
that controls the life company;
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|
|
(b) a widely held company to which
subsection 407(5) applies that controls the
life company; or
|
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|
|
(c) a widely held insurance holding
company to which subsection 407(6)
applies that controls the life company.
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|
|
403. The Act is amended by adding the
following after section 407.1:
|
|
| Prohibition
against
control
|
407.2 (1) Despite section 407.1, no person
shall control, within the meaning of paragraph
3(1)(d), a converted company in respect of
which subsection 407(4) or (11) applies or a
company to which subsection 407(5) or (12)
applies.
|
|
| Exception
|
(2) Subsection (1) does not apply to a
company to which subsection 407(5) or (12)
applies or to an insurance holding company to
which subsection 407(6) or (13) applies that is
permitted to control, within the meaning of
paragraph 3(1)(d), under those subsections,
the converted company.
|
|
| Exception
|
(2.1) Subsection (1) does not apply to an
insurance holding company to which
subsection 407(10) or (16) applies that is
permitted to control, within the meaning of
paragraph 3(1)(d), under those subsections,
the company.
|
|
| Exception -
other entities
|
(3) Subsection (1) does not apply to an
entity that controls, within the meaning of
paragraph 3(1)(d), the converted company or
company, as the case may be, if the entity is
controlled, within the meaning of that
paragraph, by a company to which subsection
407(5) or (12) applies, or an insurance holding
company to which subsection 407(6) or (13)
applies, that is permitted to be a major
shareholder of the converted company or
company, as the case may be, or to have a
significant interest in any class of shares of the
converted company or company, as the case
may be.
|
|
| Loss of
control
|
(4) Despite subsections (1) and 407(4), if
the converted company referred to in
subsection (1) is a converted company in
respect of which subsection 407(4) applies, a
company to which subsection 407(5) applies
or an insurance holding company to which
subsection 407(6) applies may be a major
shareholder of the converted company and
cease to control, within the meaning of
paragraph 3(1)(d), the converted company if
the company or the insurance holding
company, as the case may be, has entered into
an agreement with the Minister to do all things
necessary to ensure that it is not a major
shareholder of the converted company on the
expiration of the day specified in the
agreement.
|
|
| Exception
|
(4.1) Despite subsections (1) and 407(9), if
the company referred to in subsection (1) is a
company to which subsection 407(5) applies,
an insurance holding company to which
subsection 407(6) applies may be a major
shareholder of the company and cease to
control, within the meaning of paragraph
3(1)(d), the company if the insurance holding
company has entered into an agreement with
the Minister to do all things necessary to
ensure that it is not a major shareholder of the
company on the expiration of the day
specified in the agreement.
|
|
| Extension
|
(5) If general market conditions so warrant
and the Minister is satisfied that the company
or the insurance holding company, as the case
may be, has used its best efforts to be in
compliance with subsection (4) or (4.1) on the
required day, the Minister may specify a later
day as the day from and after which it must
comply with that subsection.
|
|
| Loss of
control
|
(6) Despite subsections (1) and 407(11), if
the converted company referred to in
subsection (1) is a converted company in
respect of which subsection 407(11) applies, a
company to which subsection 407(12) applies
or an insurance holding company to which
subsection 407(13) applies may have a
significant interest in a class of shares of the
converted company and cease to control,
within the meaning of paragraph 3(1)(d), the
converted company if the company or the
insurance holding company, as the case may
be, has entered into an agreement with the
Minister to do all things necessary to ensure
that it does not have a significant interest in
any class of shares of the converted company
on the expiration of the day specified in the
agreement.
|
|
| Exception
|
(6.1) Despite subsections (1) and 407(15),
if the company referred to in subsection (1) is
a company to which subsection 407(12)
applies, an insurance holding company to
which subsection 407(13) applies may have a
significant interest in a class of shares of the
company and cease to control, within the
meaning of paragraph 3(1)(d), the company if
the insurance holding company has entered
into an agreement with the Minister to do all
things necessary to ensure that it does not have
a significant interest in any class of shares of
the company on the expiration of the day
specified in the agreement.
|
|
| Extension
|
(7) If general market conditions so warrant
and the Minister is satisfied that the company
or the insurance holding company, as the case
may be, has used its best efforts to be in
compliance with subsection (6) or (6.1) on the
required day, the Minister may specify a later
day as the day from and after which it must
comply with that subsection.
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|
|
404. Subsections 409(1) to (3) of the Act
are replaced by the following:
|
|
| Where
approval not
required
|
409. (1) Despite subsections 407(1) and (2)
and section 408, the approval of the Minister
is not required in respect of a company, other
than a converted company in respect of which
subsection 407(4) applies or a company to
which subsection 407(5) applies, if a person
with a significant interest in a class of shares
of the company or an entity controlled by a
person with a significant interest in a class of
shares of the company purchases or otherwise
acquires shares of that class, or acquires
control of any entity that holds any share of
that class, and the number of shares of that
class purchased or otherwise acquired, or the
acquisition of control of the entity, as the case
may be, would not increase the significant
interest of the person in that class of shares of
the company to a percentage that is greater
than the percentage referred to in subsection
(2) or (3), whichever is applicable.
|
|
| Percentage
|
(2) Subject to subsection (3), for the
purposes of subsection (1), the percentage is 5
percentage points in excess of the significant
interest of the person in that class of shares of
the company on the later of June 1, 1992 and
the day of the most recent purchase or
acquisition by the person or any entity
controlled by the person, other than the entity
referred to in subsection (1), of shares of that
class of shares of the company, or of control of
an entity that held shares of that class of shares
of the company, for which approval was given
by the Minister.
|
|
| When
approval not
required
|
(3) If a person has a significant interest in a
class of shares of a company and the person's
percentage of that class has decreased after the
date of the most recent purchase or other
acquisition by the person or any entity
controlled by the person, other than the entity
referred to in subsection (1), of shares of that
class of shares of the company, or of control of
an entity that held shares of that class of shares
of the company, for which approval was given
by the Minister, the percentage for the
purposes of subsection (1) is the percentage
that is the lesser of
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|
|
(a) 5 percentage points in excess of the
significant interest of the person in that
class of shares of the company on the later
of June 1, 1992 and the day of the most
recent purchase or other acquisition by the
person or any entity controlled by the
person, other than the entity referred to in
subsection (1), of shares of that class of
shares of the company, or of control of an
entity that held shares of that class of shares
of the company, for which approval was
given by the Minister, and
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|
|
(b) 10 percentage points in excess of the
lowest significant interest of the person in
that class of shares of the company at any
time after the later of June 1, 1992 and the
day of the most recent purchase or other
acquisition by the person or any entity
controlled by the person, other than the
entity referred to in subsection (1), of shares
of that class of shares of the company, or of
control of an entity that held shares of that
class of shares of the company, for which
approval was given by the Minister.
|
|
|
|
405. Subsection 410(1) of the Act is
replaced by the following:
|
|
| When
approval not
required
|
410. (1) Despite subsections 407(1) and (2)
and section 408, the approval of the Minister
is not required if
|
|
|
|
(a) the Superintendent has, by order,
directed the company to increase its capital
and shares of the company are issued and
acquired in accordance with the terms and
conditions, if any, that may be specified in
the order; or
|
|
|
|
(b) a person who controls, within the
meaning of paragraph 3(1)(a), the company
acquires additional shares of the company.
|
|
| Exception
|
(1.1) Paragraph (1)(a) does not apply in
respect of a converted company in respect of
which subsection 407(4) or (11) applies or a
company to which subsection 407(5) or (12)
applies.
|
|
|
|
406. Section 411 of the Act is replaced by
the following:
|
|
| Public
holding
requirement
|
411. (1) Every company shall, from and
after the day determined under this section in
respect of that company, have, and continue to
have, voting shares that carry at least 35 per
cent of the voting rights attached to all of the
outstanding voting shares of the company and
that are
|
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|
|
(a) shares of one or more classes of shares
that are listed and posted for trading on a
recognized stock exchange in Canada; and
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|
|
(b) shares none of which is beneficially
owned by a person who is a major
shareholder of the company in respect of the
voting shares of the company or by any
entity that is controlled by a person who is
a major shareholder of the company in
respect of such shares.
|
|
| Determination
of day
|
(2) If the company has equity of one billion
dollars or more on the day it comes into
existence, the day referred to in subsection (1)
is the day that is three years after that day and,
in the case of any other company, the day
referred to in subsection (1) is the day that is
three years after the day of the first annual
meeting of the shareholders and policyholders
of the company held after the equity of the
company first reaches one billion dollars.
|
|
| Extension
|
(3) If general market conditions so warrant
and the Minister is satisfied that a company
has used its best efforts to be in compliance
with this section on the day determined under
subsection (2), the Minister may specify a
later day as the day from and after which the
company must comply with subsection (1).
|
|
|
|
407. Subsection 412(1) of the Act is
replaced by the following:
|
|
| Limit on
assets
|
412. (1) Unless an exemption order with
respect to the company is granted under
section 414, if a company fails to comply with
section 411 in any month, the Minister may, by
order, require the company not to have, until
it complies with that section, average total
assets in any three month period ending on the
last day of a subsequent month exceeding the
company's average total assets in the three
month period ending on the last day of the
month immediately before the month
specified in the order.
|
|
|
|
408. (1) The portion of subsection 414(1)
of the Act before paragraph (c) is replaced
by the following:
|
|
| Exemption by
order of
Minister
|
414. (1) An entity that controls a company
and that is
|
|
|
|
(a) an insurance holding company that is in
compliance with section 938,
|
|
|
|
|
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|
(b.1) a bank that would be in compliance
with section 411 if it were a company,
|
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|
|
(b.2) a widely held bank holding company,
|
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|
|
(b.3) a bank holding company that would be
in compliance with section 411 if it were a
company,
|
|
|
|
(2) Paragraph 414(1)(e) of the Act is
replaced by the following:
|
|
|
|
(e) an association to which the Cooperative
Credit Associations Act applies,
|
|
|
|
(3) Paragraph 414(5)(a) of the Act is
replaced by the following:
|
|
|
|
(a) the entity that applied for the exemption
order ceases to control the company;
|
|
|
|
409. Section 416 of the Act is replaced by
the following:
|
|
| Acquisition of
control
permitted
|
416. (1) Subject to subsection (2) and
sections 408 and 417, section 411 does not
apply in respect of a company if a person
acquires control of a company with equity of
one billion dollars or more through the
purchase or other acquisition of all or any
number of the shares of the company by the
person or by any entity controlled by the
person.
|
|
| Undertaking
required
|
(2) Subsection (1) applies only if the person
provides the Minister with an undertaking
satisfactory to the Minister to do all things
necessary so that, within three years after the
acquisition, or any other period that the
Minister may specify, the company has voting
shares that carry at least 35 per cent of the
voting rights attached to all of the outstanding
voting shares of the company and that are
|
|
|
|
(a) shares of one or more classes of shares
that are listed and posted for trading on a
recognized stock exchange in Canada; and
|
|
|
|
(b) shares none of which is beneficially
owned by a person who is a major
shareholder of the company in respect of the
voting shares of the company or by any
entity that is controlled by a person who is
a major shareholder of the company in
respect of such shares.
|
|
| 1997, c. 15,
s. 246
|
410. (1) The portion of subsection 418(1)
of the Act before paragraph (a) is replaced
by the following:
|
|
| Restriction on
voting rights
|
418. (1) If, with respect to any company, a
particular person contravenes subsection
407(1), (4), (9), (11) or (15) or section 407.03,
407.1 or 407.2 or fails to comply with an
undertaking referred to in subsection 416(2)
or with any term or condition imposed under
section 421, no person, and no entity
controlled by the particular person, shall, in
person or by proxy, exercise any voting rights
|
|
| 1997, c. 15,
s. 246
|
(2) Subsection 418(2) of the Act is
replaced by the following:
|
|
| Subsection (1)
ceases to
apply
|
(2) Subsection (1) ceases to apply in respect
of a person when, as the case may be,
|
|
|
|
(a) the shares to which the contravention
relates have been disposed of;
|
|
|
|
(b) the person ceases to control the
company within the meaning of paragraph
3(1)(d);
|
|