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| Main business
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922. (1) Subject to this Part, a bank holding
company shall not engage in or carry on any
business other than
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(a) acquiring, holding and administering
investments that are permitted by this Part;
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(b) providing management, advisory,
financing, accounting, information
processing and other prescribed services to
entities in which it has a substantial
investment; and
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(c) any other prescribed business.
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| Regulations
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(2) The Governor in Council may make
regulations prescribing businesses or services
for the purposes of subsection (1).
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| Restriction on
guarantees
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923. (1) A bank holding company shall not
guarantee on behalf of any person the payment
or repayment of any sum of money.
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| Exception
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(2) Subsection (1) does not apply if
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(a) the person on whose behalf the bank
holding company has undertaken to
guarantee the payment or repayment is a
subsidiary of the bank holding company;
and
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(b) the subsidiary has an unqualified
obligation to reimburse the bank holding
company for the full amount of the payment
or repayment to be guaranteed.
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| Regulations
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(3) The Governor in Council may make
regulations imposing terms and conditions in
respect of guarantees permitted by this
section.
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| Restriction on
partnerships
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924. (1) Except with the approval of the
Superintendent, a bank holding company shall
not be a general partner in a limited
partnership or a partner in a general
partnership.
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| Meaning of
``general
partnership''
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(2) For the purposes of subsection (1),
``general partnership'' means any partnership
other than a limited partnership.
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Interpretation
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| Definitions
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925. (1) The definitions in subsection
464(1) apply in respect of bank holding
companies, except that the reference to
``section 468'' in the definition ``permitted
entity'' is to be read as a reference to ``section
930'' and the reference to ``bank'' in that
definition is to be read as a reference to ``bank
holding company''.
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| Members of a
bank holding
company's
group
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(2) For the purpose of this Division, a
member of a bank holding company's group is
any of the following:
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(a) an entity referred to in any of paragraphs
930(1)(a) to (f) that controls the bank
holding company;
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(b) a subsidiary of the bank holding
company or of an entity referred to in any of
paragraphs 930(1)(a) to (f) that controls the
bank holding company;
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(c) an entity in which the bank holding
company, or an entity referred to in any of
paragraphs 930(1)(a) to (f) that controls the
bank holding company, has a substantial
investment; or
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(d) a prescribed entity in relation to the bank
holding company.
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| Non-applicati
on of Division
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(3) This Division does not apply in respect
of
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(a) the holding of a security interest in real
property, unless the security interest is
prescribed under paragraph 941(a) to be an
interest in real property; or
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(b) the holding of a security interest in
securities of an entity.
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Investments
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| Investments
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926. Subject to this Division, a bank
holding company may invest its funds in
permitted entities or make any other
investment that its directors consider
necessary or advisable to manage the bank
holding company's liquidity.
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General Constraints on Investments
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| Investment
standards
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927. The directors of a bank holding
company shall establish and the bank holding
company shall adhere to investment and
lending policies, standards and procedures
that a reasonable and prudent person would
apply to avoid undue risk of loss and obtain a
reasonable return.
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| Restriction on
control and
substantial
investments
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928. (1) Subject to subsections (2) and (3),
no bank holding company shall acquire
control of, or hold, acquire or increase a
substantial investment in, any entity other
than a permitted entity.
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| Exception:
indirect
investments
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(2) A bank holding company may acquire
control of, or acquire or increase a substantial
investment in, an entity other than a permitted
entity by way of
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(a) an acquisition of control of an entity
referred to in any of paragraphs 930(1)(a) to
(j), a specialized financing entity or a
prescribed entity that controls or has a
substantial investment in the entity; or
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(b) an acquisition of shares or ownership
interests in the entity by
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(i) an entity referred to in any of
paragraphs 930(1)(a) to (j), a specialized
financing entity or a prescribed entity
that is controlled by the bank holding
company, or
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(ii) an entity controlled by an entity
referred to in any of paragraphs 930(1)(a)
to (j), a specialized financing entity or a
prescribed entity that is controlled by the
bank holding company.
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| Exception:
temporary
investments,
realizations
and loan
workouts
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(3) A bank holding company may acquire
control of, or acquire or increase a substantial
investment in, an entity by way of
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(a) a temporary investment permitted by
section 933;
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(b) an acquisition of shares of a body
corporate or of ownership interests in an
unincorporated entity permitted by section
934; or
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(c) a realization of security permitted by
section 935.
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| Exception:
uncontrolled
event
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(4) A bank holding company is deemed not
to contravene subsection (1) if the bank
holding company acquires control of, or
acquires or increases a substantial investment
in, an entity solely as the result of an event not
within the control of the bank holding
company.
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| Regulations re
limits
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929. The Governor in Council may make
regulations
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(a) respecting the determination of the
amount or value of loans, investments and
interests for the purposes of this Division;
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(b) respecting the loans and investments,
and the maximum aggregate amount of all
loans and investments, that may be made or
acquired by a bank holding company and its
prescribed subsidiaries to or in a person and
any persons connected with that person;
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(c) specifying the classes of persons who are
connected with any person for the purposes
of paragraph (b); and
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(d) prescribing terms and conditions under
which a bank holding company may
acquire control of, or acquire or increase a
substantial investment in, a specialized
financing entity.
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Subsidiaries and Equity Investments
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| Permitted
investments
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930. (1) Subject to subsections (4) to (6), a
bank holding company may acquire control
of, or acquire or increase a substantial
investment in
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(b) a bank holding company;
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(c) a body corporate to which the Trust and
Loan Companies Act applies;
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(d) an association to which the Cooperative
Credit Associations Act applies;
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(e) an insurance company or a fraternal
benefit society incorporated or formed by
or under the Insurance Companies Act;
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(f) an insurance holding company;
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(g) a trust, loan or insurance corporation
incorporated or formed by or under an Act
of the legislature of a province;
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(h) a cooperative credit society
incorporated or formed, and regulated, by
or under an Act of the legislature of a
province;
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(i) an entity that is incorporated or formed
by or under an Act of Parliament or of the
legislature of a province and that is
primarily engaged in dealing in securities;
or
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(j) an entity that is incorporated or formed,
and regulated, otherwise than by or under
an Act of Parliament or of the legislature of
a province and that is primarily engaged
outside Canada in a business that, if carried
on in Canada, would be the business of
banking, the business of a cooperative
credit society, the business of insurance, the
business of providing fiduciary services or
the business of dealing in securities.
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| Permitted
investments
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(2) Subject to subsections (3) to (6), a bank
holding company may acquire control of, or
acquire or increase a substantial investment
in, an entity, other than an entity referred to in
any of paragraphs (1)(a) to (j), whose business
is limited to one or more of the following:
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(a) engaging in any financial service
activity that a bank is permitted to engage
in under any of paragraphs 409(2)(a) to (d)
or any other activity that a bank is permitted
to engage in under section 410 or 411;
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(b) acquiring or holding shares of, or
ownership interests in, entities in which a
bank holding company is permitted under
this Division to hold or acquire;
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(c) engaging in the provision of any services
exclusively to any or all of the following, so
long as the entity is providing those services
to the bank holding company or any
member of the bank holding company's
group:
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(i) the bank holding company,
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(ii) any member of the bank holding
company's group,
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(iii) any entity that is primarily engaged
in the business of providing financial
services,
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(iv) any permitted entity in which an
entity referred to in subparagraph (iii) has
a substantial investment, or
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(v) any prescribed person, if it is doing so
under prescribed terms and conditions, if
any are prescribed;
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(d) engaging in any activity that a bank is
permitted to engage in, other than an
activity referred to in paragraph (a) or (e),
that relates to
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(i) the promotion, sale, delivery or
distribution of a financial product or
financial service that is provided by any
member of the bank holding company's
group, or
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(ii) if a significant portion of the business
of the 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;
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(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
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(f) engaging in prescribed activities, under
prescribed terms and conditions, if any are
prescribed.
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| Restriction
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(3) A bank holding company may not
acquire control of, or acquire or increase a
substantial investment in, an entity whose
business includes any activity referred to in
any of paragraphs (2)(a) to (e) if the entity
engages in the business of accepting deposit
liabilities or if the activities of the entity
include
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(a) activities that a bank is not permitted to
engage in under any of sections 412, 415,
417 and 418;
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(b) activities that a bank is not permitted to
engage in under section 416 if the entity
engages in the activities of a finance entity
or of any other entity as may be prescribed;
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(c) acquiring control of, or acquiring or
holding a substantial investment in, an
entity that a bank is not permitted to control
or in which a bank is not permitted to have
a substantial investment, except as may be
permitted under paragraph 466(3)(b) or (c)
or subsection 466(4); or
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(d) any prescribed activity.
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| Control
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(4) Subject to subsection (8) and the
regulations, a bank holding company may not
acquire control of, or acquire or increase a
substantial investment in,
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(a) an entity referred to in paragraph (1)(a)
or (b), unless
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(i) the bank holding company controls,
within the meaning of paragraphs 3(1)(a)
and (d), the entity or would thereby
acquire control, within the meaning of
those paragraphs, of the entity, or
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(ii) the bank holding company is
permitted by regulations made under
paragraph 936(a) to acquire or increase
the substantial investment;
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(b) an entity referred to in any of paragraphs
(1)(c) to (j) or an entity that is primarily
engaged in acquiring or holding shares or
other ownership interests in entities in
which a bank holding company is permitted
under this Division to hold or acquire,
unless
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(i) the bank holding company controls,
within the meaning of paragraph 3(1)(d),
the entity, or would thereby acquire
control, within the meaning of that
paragraph, of the entity, or
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(ii) the bank holding company is
permitted by regulations made under
paragraph 936(a) to acquire or increase
the substantial investment; or
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(c) an entity whose business includes one or
more of the activities referred to in
paragraph (2)(a) and that engages, as part of
its business, in any financial intermediary
activity that exposes the entity to material
market or credit risk, including a finance
entity, a factoring entity, a financial leasing
entity and a specialized financing entity,
unless
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(i) the bank holding company controls,
within the meaning of paragraph 3(1)(d),
the entity, or would thereby acquire
control, within the meaning of that
paragraph, of the entity, or
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(ii) the bank holding company is
permitted by regulations made under
paragraph 936(a) to acquire or increase
the substantial investment.
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| Minister's
approval
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(5) Subject to the regulations, a bank
holding company may not, without the prior
written approval of the Minister,
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(a) acquire control of an entity referred to in
paragraphs (1)(g) to (i) from a person who
is not a member of the bank holding
company's group;
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(b) acquire control of an entity referred to in
paragraph (1)(j) or (4)(c), other than an
entity whose activities are limited to the
activities of one or more of the following
entities, if the control is acquired from an
entity referred to in any of paragraphs (1)(a)
to (f) that is not a member of the bank
holding company's group:
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(ii) a financial leasing entity, or
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(iii) a specialized financing entity;
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(c) acquire control of, or acquire or increase
a substantial investment in, an entity whose
business includes one or more of the
activities referred to in paragraph (2)(d);
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(d) acquire control of, or acquire or increase
a substantial investment in, an entity that
engages in an activity described in
paragraph 410(1)(c) or (c.1); or
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