Bill C-38
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Subsidiaries and Equity Investments |
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Permitted
investments
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390. (1) Subject to subsections (4) to (6) and
Part XII, an association may acquire control
of, or acquire or increase a substantial
investment in,
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Permitted
investments
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(2) Subject to subsections (3) to (6) and Part
XII, an association 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 (h), whose
business is limited to one or more of the
following:
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Restriction
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(3) An association 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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Control
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(4) Subject to subsection (8) and the
regulations, an association may not acquire
control of, or acquire or increase a substantial
investment in,
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Minister's
approval
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(5) Subject to the regulations, an
association may not, without the prior written
approval of the Minister,
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Superinten- dent's approval
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(6) Subject to subsection (7) and the
regulations, an association may not acquire
control of, or acquire or increase a substantial
investment in, an entity referred to in any of
paragraphs (1)(e) to (g) or (4)(b), unless the
association obtains the approval of the
Superintendent.
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Exception
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(7) Subsection (6) does not apply in respect
of a particular transaction if the Minister has
approved the transaction under subsection (5)
or is deemed to have approved it under
subsection 391(1).
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Control not
required
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(8) An association need not control an entity
referred to in paragraph (1)(h), or an entity that
is incorporated or formed otherwise than by or
under an Act of Parliament or of the
legislature of a province, if the laws or
customary business practices of the country
under the laws of which the entity was
incorporated or formed do not permit the
association to control the entity.
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Prohibition on
giving up
control in fact
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(9) An association that, under paragraph
(4)(b), controls an entity may not, without the
prior written approval of the Minister, give up
control, within the meaning of paragraph
3(1)(e), of the entity while it continues to
control the entity.
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Giving up
control
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(10) An association that, under subsection
(4), controls an entity may give up control of
the entity while keeping a substantial
investment in the entity if
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Subsections
do not apply
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(11) If an association controls, within the
meaning of paragraph 3(1)(a), an entity,
subsections (5) and (6) do not apply in respect
of any subsequent increases by the association
of its substantial investment in the entity so
long as the association continues to control the
entity.
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Approval for
indirect
investments
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391. (1) If an association obtains the
approval of the Minister under subsection
390(5) to acquire control of, or to acquire or
increase a substantial investment in, an entity
and, through that acquisition or increase, the
association indirectly acquires control of, or
acquires or increases a substantial investment
in, another entity that would require the
approval of the Minister under subsection
390(5) or the Superintendent under subsection
390(6) and that indirect acquisition or
increase is disclosed to the Minister in writing
before the approval is obtained, the
association is deemed to have obtained the
approval of the Minister or the Superintendent
for that indirect acquisition or increase.
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Approval for
indirect
investments
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(2) If an association obtains the approval of
the Superintendent under subsection 390(6) to
acquire control of, or to acquire or increase a
substantial investment in, an entity and,
through that acquisition or increase the
association indirectly acquires control of, or
acquires or increases a substantial investment
in, another entity that would require the
approval of the Superintendent under that
subsection and that indirect acquisition or
increase is disclosed to the Superintendent in
writing before the approval is obtained, the
association is deemed to have obtained the
approval of the Superintendent for that
indirect acquisition or increase.
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Undertakings
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392. (1) If an association controls a
permitted entity, other than an entity referred
to in any of paragraphs 390(1)(a) to (d), the
association shall provide the Superintendent
with any undertakings that the Superintendent
may require regarding
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Undertakings
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(2) If an association acquires control of an
entity referred to in any of paragraphs
390(1)(e) to (g), the association shall provide
the Superintendent with any undertakings
concerning the entity that the Superintendent
may require.
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Agreements
with other
jurisdictions
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(3) The Superintendent may enter into an
agreement with the appropriate official or
public body responsible for the supervision of
any entity referred to in any of paragraphs
390(1)(e) to (g) in each province or in any
other jurisdiction concerning any matters
referred to in paragraphs (1)(a) and (b) or any
other matter the Superintendent considers
appropriate.
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Access to
records
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(4) Despite any other provision of this Part,
an association shall not control a permitted
entity, other than an entity referred to in any of
paragraphs 390(1)(a) to (d), unless the
association obtains from the permitted entity
an undertaking to provide the Superintendent
with reasonable access to the records of the
permitted entity in the course of the
acquisition of control or within a reasonable
time after control is acquired.
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Exceptions and Exclusions |
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Temporary
investments in
entity
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393. (1) Subject to subsection (4), an
association may, by way of a temporary
investment, acquire control of, or acquire or
increase a substantial investment in, an entity
but, within two years, or any other period that
may be specified or approved by the
Superintendent, after acquiring control or
after acquiring or increasing the substantial
investment, it shall do all things necessary to
ensure that it no longer controls the entity or
has a substantial investment in the entity.
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Transitional
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(2) Despite subsection (1), if an association
that was in existence immediately before June
1, 1992 had an investment in an entity on
September 27, 1990 that is a substantial
investment within the meaning of section 12
and the association subsequently increases
that substantial investment by way of a
temporary investment, the association shall,
within two years, or any other period that is
specified or approved by the Superintendent,
after increasing the substantial investment, do
all things necessary to ensure that its
substantial investment in the entity is no
greater than it was on September 27, 1990.
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Extension
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(3) The Superintendent may, in the case of
any particular association that makes an
application under this subsection, extend the
period of two years, or the other period
specified or approved by the Superintendent,
that is referred to in subsection (1) or (2) for
any further period or periods, and on any terms
and conditions, that the Superintendent
considers necessary.
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Temporary
investment
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(4) If an association, by way of temporary
investment, acquires control of, or acquires or
increases a substantial investment in, an entity
for which the approval of the Minister under
subsection 390(5) is required, the association
must, within 90 days after acquiring control or
after acquiring or increasing the substantial
investment,
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Indetermi- nate extension
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(5) If an association, by way of temporary
investment, acquires control of, or acquires or
increases a substantial investment in, an entity
for which the approval of the Superintendent
under subsection 390(6) is required, the
Superintendent may, in the case of any
particular association that makes an
application under this subsection, permit the
association to retain control of the entity or to
continue to hold the substantial investment in
the entity for an indeterminate period, on any
terms and conditions that the Superintendent
considers necessary.
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Loan
workouts
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394. (1) Despite anything in this Part, if an
association or any of its subsidiaries has made
a loan to an entity and, under the terms of the
agreement between the association, or any of
its subsidiaries, and the entity with respect to
the loan and any other documents governing
the terms of the loan, a default has occurred,
the association may acquire
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Obligation of
association
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(2) If an association acquires shares or
ownership interests in an entity under
subsection (1), the association shall, within
five years after acquiring them, do all things
necessary to ensure that the association does
not control the entity or have a substantial
investment in the entity.
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Transitional
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(3) Despite subsection (1), if an association
that was in existence immediately before June
1, 1992 had an investment in an entity on
September 27, 1990 that is a substantial
investment within the meaning of section 12
and the association later increases that
substantial investment by way of an
investment made under subsection (1), the
association shall, within five years after
increasing the substantial investment, do all
things necessary to ensure that its substantial
investment in the entity is no greater than it
was on September 27, 1990.
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Extension
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(4) The Superintendent may, in the case of
any particular association that makes an
application under this subsection, extend the
period of five years referred to in subsection
(2) or (3) for any further period or periods, and
on any terms and conditions, that the
Superintendent considers necessary.
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Exception -
entities
controlled by
foreign
governments
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(5) Despite anything in this Part, if an
association has made a loan to, or holds a debt
obligation of, the government of a foreign
country or an entity controlled by the
government of a foreign country and, under
the terms of the agreement between the
association and that government or the entity,
as the case may be, and any other documents
governing the terms of the loan or debt
obligation, a default has occurred, the
association may acquire all or any of the
shares of, or ownership interests in, that entity
or in any other entity designated by that
government, if the acquisition is part of a debt
restructuring program of that government.
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Time for
holding shares
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(6) If an association acquires any shares or
ownership interests under subsection (5), the
association may, on any terms and conditions
that the Superintendent considers appropriate,
hold those shares or ownership interests for an
indeterminate period or for any other period
that the Superintendent may specify.
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Exception
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(7) If, under subsection (1), an association
acquires control of, or acquires or increases a
substantial investment in, an entity that it
would otherwise be permitted to acquire or
increase under section 390, the association
may retain control of the entity or continue to
hold the substantial investment for an
indeterminate period, if the approval in
writing of the Minister is obtained before the
end of the period referred to in subsection (2)
or (3), including any extension of it granted
under subsection (4).
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Realizations
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395. (1) Despite anything in this Act, an
association may acquire
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