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(ii) a loan to the Government of
Canada, the government of a province,
a municipality, or to any agency
thereof, or to the government of a
foreign country or any political
subdivision thereof, or any agency
thereof, or to a prescribed international
agency,
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(iii) a loan that is guaranteed by, or
fully secured by securities issued by, a
government, a municipality or an
agency referred to in subparagraph (ii),
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(iv) a loan that is secured by a
mortgage on real property, where
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(A) the mortgage is on residential
property and the amount of the loan,
together with the amount then
outstanding of any mortgage having
an equal or prior claim against the
property, does not exceed 75% of
the value of the property at the time
the loan is made or acquired, or
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(B) the mortgage is on real property
other than residential property and
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(I) the amount of the loan,
together with the amount then
outstanding of any mortgage
having an equal or prior claim
against the property, does not
exceed 75% of the value of the
property at the time the loan is
made or acquired, and
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(II) at the time the loan is made or
acquired the property provides an
annual income sufficient to pay
all annual expenses related to the
property, including the payments
owing under the mortgage and the
mortgages having an equal or
prior claim against the property,
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(v) a loan that is secured by a mortgage
on real property, where
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(A) the mortgage is on residential
property and
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(I) the amount of the loan,
together with the amount then
outstanding of any mortgage
having an equal or prior claim
against the property, exceeds
75% of the value of the property
at the time the loan is made or
acquired, and
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(II) repayment of the amount of
the loan that exceeds 75% of the
value of the property is
guaranteed or insured by a
government agency or private
insurer approved by the
Superintendent, or
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(B) the mortgage is on real property
other than residential property and
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(I) the amount of the loan,
together with the amount then
outstanding of any mortgage
having an equal or prior claim
against the property, exceeds
75% of the value of the property
at the time the loan is made or
acquired,
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(II) repayment of the amount of
the loan that exceeds 75% of the
value of the property is
guaranteed or insured by a
government agency or private
insurer approved by the
Superintendent, and
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(III) at the time the loan is made
or acquired, the property provides
an annual income sufficient to
pay all annual expenses related to
the property, including the
payments owing under the
mortgage and the mortgages
having an equal or prior claim
against the property,
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(A) consists of a deposit made by the
association with a financial
institution,
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(B) is fully secured by a deposit with
any financial institution, including
the association,
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(C) is fully secured by debt
obligations guaranteed by any
financial institution other than the
association, or
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(D) is fully secured by a guarantee of
a financial institution other than the
association,
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(vii) a loan to another association
under prescribed terms and conditions,
if any are prescribed, or
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(viii) a loan to any prescribed entity
under prescribed terms and conditions,
if any are prescribed;
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(b) an investment in debt obligations,
other than
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(i) debt obligations that are
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(A) guaranteed by any financial
institution other than the
association,
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(B) fully secured by deposits with
any financial institution, including
the association, or
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(C) fully secured by debt obligations
that are guaranteed by any financial
institution other than the
association,
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(ii) debt obligations issued by the
Government of Canada, the
government of a province, a
municipality, or by any agency
thereof, or by the government of a
foreign country or any political
subdivision thereof, or by any agency
thereof, or by a prescribed
international agency,
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(iii) debt obligations that are
guaranteed by, or fully secured by
securities issued by, a government, a
municipality or an agency referred to
in subparagraph (ii),
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(iv) debt obligations that are widely
distributed, as that expression is
defined by the regulations,
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(v) debt obligations that are issued by
another association under prescribed
terms and conditions, if any are
prescribed ,
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(vi) debt obligations of an entity
controlled by the association, or
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(vii) debt obligations of a prescribed
entity that are issued under prescribed
terms and conditions, if any are
prescribed; and
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(c) an investment in shares of a body
corporate or ownership interests in an
unincorporated entity, other than
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(i) shares or ownership interests that
are widely distributed, as that
expression is defined by the
regulations,
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(ii) shares or ownership interests of an
entity controlled by the association, or
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(iii) participating shares.
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``factoring
entity''
« entité
s'occupant
d'affactu-
rage »
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``factoring entity'' means a factoring entity as
defined in the regulations.
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``finance
entity''
« entité
s'occupant de
financement »
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``finance entity'' means a finance entity as
defined in the regulations.
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``financial
leasing
entity''
« entité
s'occupant de
crédit-bail »
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``financial leasing entity'' means an entity
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(a) whose activities are limited to the
financial leasing of personal property and
such related activities as are prescribed
and whose activities conform to such
restrictions and limitations thereon as are
prescribed; and
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(b) that, in conducting the activities
referred to in paragraph (a) in Canada,
does not
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(i) direct its customers or potential
customers to particular dealers in the
leased property or the property to be
leased,
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(ii) enter into lease agreements with
persons in respect of any motor vehicle
having a gross vehicle weight, as that
expression is defined by the
regulations, of less than twenty-one
tonnes, or
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(iii) enter into lease agreements with
natural persons in respect of personal
household property, as that expression
is defined by the regulations.
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``loan''
« prêt » ou
« emprunt »
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``loan'' includes an acceptance, endorsement
or other guarantee, a deposit, a financial
lease, a conditional sales contract, a
repurchase agreement and any other similar
arrangement for obtaining funds or credit
but does not include investments in
securities.
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``motor
vehicle''
« véhicule à
moteur »
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``motor vehicle'' means a motorized vehicle
designed to be used primarily on a public
highway for the transportation of persons or
things, but does not include
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(a) a fire-engine, bus, ambulance or
utility truck; or
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(b) any other special purpose motorized
vehicle that contains significant special
features that make it suitable for a
specific purpose.
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``mutual fund
distribution
entity''
« courtier de
fonds
mutuels »
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``mutual fund distribution entity'' means an
entity whose principal activity is acting as
a selling agent of units, shares or other
interests in a mutual fund and acting as a
collecting agent in the collection of
payments for any such interests if
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(a) the proceeds of the sales of any such
interests, less any sales commissions and
service fees, are paid to the mutual fund;
and
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(b) the existence of a sales commission
and service fee in respect of the sale of
any such interest is disclosed to the
purchaser of the interest before the
purchase of the interest.
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``mutual fund
entity''
« entité
s'occupant de
fonds
mutuels »
|
``mutual fund entity'' means an entity
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(a) whose activities are limited to the
investing of the funds of the entity so as
to provide investment diversification and
professional investment management to
the holders of its securities; and
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(b) whose securities entitle their holders
to receive, on demand, or within a
specified period after demand, an amount
computed by reference to the value of a
proportionate interest in the whole or in
a part of its net assets, including a
separate fund or trust account of the
entity.
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``participating
share''
« action
partici-
pante »
|
``participating share'' means a share of a body
corporate that carries the right to participate
in the earnings of the body corporate to an
unlimited degree and to participate in a
distribution of the remaining property of the
body corporate on dissolution.
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``permitted
entity''
« entité
admissible »
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``permitted entity'' means an entity in which
an association is permitted to acquire a
substantial investment under section 390.
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``prescribed
subsidiary''
« filiale
réglementai-
re »
|
``prescribed subsidiary'' means a subsidiary
that is one of a prescribed class of
subsidiaries.
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``real property
brokerage
entity''
« courtier
immobilier »
|
``real property brokerage entity'' means an
entity that is primarily engaged in
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(a) acting as an agent for vendors,
purchasers, mortgagors, mortgagees,
lessors or lessees of real property; and
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(b) the provision of consulting or
appraisal services in respect of real
property.
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``specialized
financing
entity''
« entité
s'occupant de
financement
spécial »
|
``specialized financing entity'' means a
specialized financing entity as defined in
the regulations.
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| Members of
an
association's
group
|
(2) For the purpose of this Part, a member
of an association's group is any of the
following:
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(a) an entity referred to in paragraph
390(1)(a) that controls the association;
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(b) a subsidiary of the association or of an
entity referred to in paragraph 390(1)(a)
that controls the association;
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(c) an entity in which the association, or an
entity referred to in paragraph 390(1)(a)
that controls the association, has a
substantial investment; or
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(d) a prescribed entity in relation to the
association.
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| Non-applicati
on of Part
|
(3) This Part 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 403 (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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| Investment
standards
|
387. The directors of an association shall
establish and the association shall adhere to
investment and lending policies, standards
and procedures that a reasonable and prudent
person would apply in respect of a portfolio of
investments and loans to avoid undue risk of
loss and obtain a reasonable return.
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| Restriction on
control and
substantial
investments
|
388. (1) Subject to subsections (2) to (4) , no
association 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
|
(2) An association 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 390(1)(a) to
(h), 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 390(1)(a) to (h), a specialized
financing entity or a prescribed entity
that is controlled by the association, or
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(ii) an entity controlled by an entity
referred to in any of paragraphs 390(1)(a)
to (h), a specialized financing entity or a
prescribed entity that is controlled by the
association.
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| Exception:
temporary
investments,
realizations
and loan
workouts
|
(3) An association 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 393;
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|
(b) an acquisition of shares of a body
corporate or of ownership interests in an
unincorporated entity permitted by section
394; or
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|
(c) a realization of security permitted by
section 395.
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|
| Exception:
specialized
financing
regulations
|
(4) A retail association may acquire control
of , or hold, acquire or increase a substantial
investment in, an entity other than a permitted
entity if it does so in accordance with
regulations made under paragraph 389(d)
concerning specialized financing.
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|
| Exception:
uncontrolled
event
|
(5) An association is deemed not to
contravene subsection (1) if the association
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 association.
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| Regulations re
limits
|
389. 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 Part;
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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 an association 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) concerning specialized financing for the
purposes of subsection 388(4).
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