Bill C-8
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Portfolio Limits |
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Exclusion
from portfolio
limits
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397. (1) Subject to subsection (3), the value
of all loans, investments and interests
acquired by an association and any of its
prescribed subsidiaries under section 394 or as
a result of a realization of a security interest is
not to be included in calculating the value of
loans, investments and interests of the
association and its prescribed subsidiaries
under sections 398 to 402
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Extension
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(2) The Superintendent may, in the case of
any particular association, extend any period
referred to in subsection (1) for any further
period or periods, and on any terms and
conditions, that the Superintendent considers
necessary.
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Exception
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(3) Subsection (1) does not apply in respect
of an investment or interest described in that
subsection if the investment or interest is
defined by a regulation made under section
403 to be an interest in real property and
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Commercial Loans |
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Lending limit:
regulatory
capital of $25
million or less
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398. An association with twenty-five
million dollars or less of regulatory capital
shall not, and shall not permit its prescribed
subsidiaries to,
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if the aggregate value of all commercial loans
held by the association and its prescribed
subsidiaries exceeds, or the acquisition or
making of the commercial loan or the
acquisition of control of the entity would
cause the aggregate value of all commercial
loans held by the association and its
prescribed subsidiaries to exceed, 5 % of the
total assets of the association.
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Lending limit:
regulatory
capital over
$25 million
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399. An association with more than
twenty-five million dollars of regulatory
capital may
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if the aggregate value of all commercial loans
held by the association and its prescribed
subsidiaries would thereby exceed 5 % of the
total assets of the association only with the
prior approval in writing of the
Superintendent and in accordance with any
terms and conditions that the Superintendent
may specify.
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Meaning of
``total assets''
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400. For the purposes of sections 398 and
399, ``total assets'', in respect of an
association, has the meaning given to that
expression by the regulations.
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Real Property |
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Limit on total
property
interest
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401. An association shall not, and shall not
permit its prescribed subsidiaries to, purchase
or otherwise acquire an interest in real
property or make an improvement to any real
property in which the association or any of its
prescribed subsidiaries has an interest if the
aggregate value of all interests of the
association in real property exceeds, or the
acquisition of the interest or the making of the
improvement would cause that aggregate
value to exceed, the prescribed percentage of
the regulatory capital of the association.
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Equities |
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Limits on
equity
acquisitions
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402. An association shall not, and shall not
permit its prescribed subsidiaries to,
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if the aggregate value of
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beneficially owned by the association and its
prescribed subsidiaries exceeds, or the
purchase or acquisition would cause that
aggregate value to exceed, the prescribed
percentage of the regulatory capital of the
association.
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Miscellaneous |
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Regulations
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403. For the purposes of this Part, the
Governor in Council may make regulations
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Divestment
order
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404. (1) The Superintendent may, by order,
direct an association to dispose of, within any
period that the Superintendent considers
reasonable, any loan, investment or interest
made or acquired in contravention of this Part.
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Divestment
order
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(2) If, in the opinion of the Superintendent,
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the Superintendent may, by order, require the
association, within any period that the
Superintendent considers reasonable, to do all
things necessary to ensure that the association
no longer controls the body corporate or
unincorporated entity or has the ability to veto
or otherwise defeat any proposal referred to in
paragraph (b).
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Divestment
order
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(3) If
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the Superintendent may, by order, require the
association, within any period that the
Superintendent considers reasonable, to do all
things necessary to ensure that the association
no longer has a substantial investment in the
entity to which the undertaking relates.
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Exception
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(4) Subsection (2) does not apply in respect
of an entity in which an association has a
substantial investment permitted by this Part.
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Deemed
temporary
investment
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405. If an association controls or has a
substantial investment in an entity as
permitted by this Part and the association
becomes aware of a change in the business or
affairs of the entity that, if the change had
taken place before the acquisition of control or
of the substantial investment, would have
caused the entity not to be a permitted entity
or would have been such that approval for the
acquisition would have been required under
subsection 390(5) or (6), the association is
deemed to have acquired, on the day the
association becomes aware of the change, a
temporary investment in respect of which
section 393 applies.
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Asset
transactions
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406. (1) An association shall not, and shall
not permit its subsidiaries to, without the
approval of the Superintendent, acquire assets
from a person or transfer assets to a person if
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A + B > C
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where
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A is the value of the assets;
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B is the total value of all assets that the
association and its subsidiaries acquired
from or transferred to that person in the
twelve months ending immediately before
the acquisition or transfer; and
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C is ten per cent of the total value of the
assets of the association, as shown in the
last annual statement of the association
prepared before the acquisition or transfer.
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Restriction
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(2) The prohibition in subsection (1) does
not apply in respect of a transaction or series
of transactions between an association and a
member of the association.
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Exception
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(3) The prohibition in subsection (1) does
not apply in respect of
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Exception
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(4) The approval of the Superintendent is
not required if
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Value of
assets
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(5) For the purposes of ``A'' in subsection
(1), the value of the assets is
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Total value of
all assets
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(6) For the purposes of subsection (1), the
total value of all assets that the association or
any of its subsidiaries has acquired during the
period of twelve months referred to in
subsection (1) is the purchase price of the
assets or, if the assets are shares of, or
ownership interests in, an entity the assets of
which immediately after the acquisition were
included in the annual statement of the
association, the fair market value of the assets
of the entity at the date of the acquisition.
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Total value of
all assets
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(7) For the purposes of subsection (1), the
total value of all assets that the association or
any of its subsidiaries has transferred during
the period of twelve months referred to in
subsection (1) is the book value of the assets
as stated in the last annual statement of the
association prepared before the transfer, or, if
the assets are shares of, or ownership interests
in, an entity the assets of which were included
in the last annual statement of the association
before the transfer, the value of the assets of
the entity as stated in the annual statement.
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Transitional
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407. Nothing in this Part requires
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But if the loan or investment would be
precluded or limited by this Part, the amount
of the loan or investment may not, except as
provided in subsections 393(2), 394(3) and
395(3), be increased after that date.
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Saving
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408. A loan or investment referred to in
section 407 is deemed not to be prohibited by
the provisions of this Part.
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1997, c. 15,
s. 151(1)
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315. (1) Paragraph 410(1)(b) of the Act is
replaced by the following:
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(2) Subsection 410(1) of the Act is
amended by striking out the word ``or'' at
the end of paragraph (d) and by adding the
following after paragraph (d):
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(3) Section 410 of the Act is amended by
adding the following after subsection (1):
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Related party
of retail
association
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(1.1) Subject to the regulations, for the
purposes of this Part, a person is a related party
of a retail association if the person is
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Exception -
subsidiaries
and
substantial
investments of
associations
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(1.2) If an entity in which an association has
a substantial investment would, but for this
subsection, be a related party of the
association only because a person who
controls the association controls the entity or
has a substantial investment in the entity, and
the person does not control the entity or have
a substantial investment in the entity
otherwise than through the person's
controlling interest in the association, the
entity is not a related party of the association.
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316. (1) Paragraph 411(2)(a) of the Act is
amended by adding the following after
subparagraph (ii):
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(2) Paragraph 411(2)(a) of the Act is
amended by striking out the word ``or'' at
the end of subparagraph (iii) and by adding
the following after subparagraph (iii):
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(3) Section 411 of the Act is amended by
adding the following after subsection (3):
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