Vol. 135, No. 31 — August 4, 2001

Manner of Calculation (Foreign Banks) Regulations

Statutory Authority

Bank Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

definitions	MANNER OF CALCULATION (FOREIGN BANKS) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act" « Loi »	"Act" means the Bank Act.
"total assets" « actif total »	"total assets", in respect of an entity, means the total value of its assets as reported on a consolidated basis in its most recently completed financial statements that were prepared in accordance with generally accepted accounting principles in Canada, or in the jurisdiction in which the entity was formed or incorporated.
"total revenue" « revenu total »	"total revenue", in respect of an entity, means its total revenue as reported on a consolidated basis in its most recently completed financial statements that were prepared in accordance with generally accepted accounting principles in Canada, or in the jurisdiction in which the entity was formed or incorporated.
	PRESCRIBED MANNER
Portion of entity's activities	2. For the purpose of the definition "financial services entity" in subsection 507(1) of the Act, the prescribed manner of determining the portion of the activities that an entity engages in that consists of one or more of the activities referred to in paragraphs (a) to (h) of that definition (in this section referred to as "particular activities") is to determine it as a percentage in accordance with the formula A × 100% where A is the greater of the fraction B/C and the fraction D/E, where B is the part of the total assets of the entity that is in respect of the particular activities, C is the total assets of the entity, D is the part of the total revenue of the entity that is derived from the particular activities, and E is the total revenue of the entity.
Portion of entity's business in Canada — par. 522.05(a) of the Act	3. For the purpose of paragraph 522.05(a) of the Act, the prescribed manner of determining the portion of the business in Canada, of a foreign bank or other entity, that consists of one or more of the activities referred to in that paragraph (in this section referred to as "particular activities") is to determine it as a percentage in accordance with the formula A × 100% where A is the greater of the fraction B/C and the fraction D/E, where B is the part of the total assets of the foreign bank or other entity that is in respect of the particular activities that the foreign bank or other entity engaged in or carried on in Canada, C is the part of the total assets of the foreign bank or other entity that is in respect of its business that it engaged in or carried on in Canada, D is the part of the total revenue of the foreign bank or other entity that is derived from the particular activities that the foreign bank or other entity engaged in or carried on in Canada, and E is the part of the total revenue of the foreign bank or other entity that is derived from its business that it engaged in or carried on in Canada.
Portion of entity's business outside Canada — par. 522.05(b) of the Act	4. For the purpose of paragraph 522.05(b) of the Act, the prescribed manner of determining the portion of the business outside Canada, of a foreign bank or other entity, that consists of one or more of the activities referred to in that paragraph (in this section referred to as "particular activities") is to determine it as a percentage in accordance with the formula
	A × 100% where A is the greater of the fraction B/C and the fraction D/E, where B is the part of the total assets of the foreign bank or other entity that is in respect of the particular activities that the foreign bank or other entity engaged in or carried on outside Canada,
	C is the part of the total assets of the foreign bank or other entity that is in respect of its business that it engaged in or carried on outside Canada, D is the part of the total revenue of the foreign bank or other entity that is derived from the particular activities that the foreign bank or other entity engaged in or carried on outside Canada, and E is the part of the total revenue of the foreign bank or other entity that is derived from its business that it engaged in or carried on outside Canada.
Portion of Canadian entity's activities — par. 522.09(b) of the Act	5. For the purpose of paragraph 522.09(b) of the Act, the prescribed manner of determining the portion of the activities that a Canadian entity engages in that consists of the activities referred to in that paragraph (in this section referred to as "particular activities") is to determine it as a percentage in accordance with the formula A × 100% where A is the greater of the fraction B/C and the fraction D/E, where B is the part of the total assets of the Canadian entity that is in respect of the particular activities, C is the total assets of the Canadian entity, D is the part of the total revenue of the Canadian entity that is derived from the particular activities, and E is the total revenue of the Canadian entity.
Portion of entity's business in Canada — par. 522.19(1)(a) of the Act	6. For the purpose of paragraph 522.19(1)(a) of the Act, the prescribed manner of determining the portion of the business in Canada, of a foreign bank or other entity, that consists of one or more of the activities referred to in that paragraph (in this section referred to as "particular activities") is to determine it as a percentage in accordance with the formula A × 100% where A is the greater of the fraction B/C and the fraction D/E, where B is the part of the total assets of the foreign bank or other entity that is in respect of the particular activities that the foreign bank or other entity engaged in or carried on in Canada, C is the part of the total assets of the foreign bank or other entity that is in respect of its business that it engaged in or carried on in Canada, D is the part of the total revenue of the foreign bank or other entity that is derived from the particular activities that the foreign bank or other entity engaged in or carried on in Canada, and E is the part of the total revenue of the foreign bank or other entity that is derived from its business that it engaged in or carried on in Canada.
Portion of entity's business outside Canada — par. 522.19(1)(b) of the Act	7. For the purpose of paragraph 522.19(1)(b) of the Act, the prescribed manner of determining the portion of the business outside Canada, of a foreign bank or other entity, that consists of one or more of the activities referred to in that paragraph (in this section referred to as "particular activities") is to determine it as a percentage in accordance with the formula A × 100% where A is the greater of the fraction B/C and the fraction D/E, where B is the part of the total assets of the foreign bank or other entity that is in respect of the particular activities that the foreign bank or other entity engaged in or carried on outside Canada, C is the part of the total assets of the foreign bank or other entity that is in respect of its business that it engaged in or carried on outside Canada, D is the part of the total revenue of the foreign bank or other entity that is derived from the particular activities that the foreign bank or other entity engaged in or carried on outside Canada, and E is the part of the total revenue of the foreign bank or other entity that is derived from its business that it engaged in or carried on outside Canada.
	COMING INTO FORCE
Coming into force	8. These Regulations come into force on the day on which section 978 of the Bank Act, as enacted by section 183 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Material Percentage Regulations

Statutory Authority

Bank Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

defintions	MATERIAL PERCENTAGE REGULATIONS
	MATERIAL PERCENTAGE
Material percentage	1. For the purposes of paragraph 508(1)(d) and subparagraph 508(2)(b)(i) of the Bank Act, the material percentage is 35%.
	COMING INTO FORCE
Coming into force	2. These Regulations come into force on the day on which section 508 of the Bank Act, as enacted by section 132 of the Financial Consumer Agency of Canada Act, being chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Minority Investment (Bank Holding Companies) Regulations

Statutory Authority

Bank Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

definitions	MINORITY INVESTMENT (BANK HOLDING COMPANIES) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act" « Loi »	"Act" means the Bank Act.
"designated entity" « entité désignée »	"designated entity" means (a) an entity referred to in any of paragraphs 930(1)(a) to (j) of the Act; (b) an entity whose business includes one or more of the activities referred to in paragraph 930(2)(a) of the Act 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 factoring entity, a finance entity or a financial leasing entity; or (c) an entity whose business includes an activity referred to in paragraph 930(2)(b) of the Act or a specialized financing entity, other than an entity in which a bank holding company is permitted to acquire or increase a substantial investment under subparagraph 930(4)(d)(iii) of the Act.
"regulatory capital" « capital réglementaire »	"regulatory capital" has the same meaning as in section 2 of the Regulatory Capital (Bank Holding Companies) Regulations.
"value" « valeur »	"value" means (a) in respect of a share, ownership interest or loan held by a bank holding company at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the bank holding company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 840(4) of the Act; and (b) in respect of a guarantee, the face value of the guarantee.
	GENERAL
Permitted substantial investments	2. Subject to section 3, (a) for the purposes of subparagraphs 930(4)(a)(ii), (b)(ii), (c)(ii) and (d)(ii) of the Act, a bank holding company may acquire or increase a substantial investment in a designated entity; and (b) for the purpose of paragraph 930(11)(a) of the Act, if a bank holding company controls a designated entity, the bank holding company may give up control of the designated entity while keeping a substantial investment in it.
Restriction concerning investments	3. Subject to sections 5 and 6, a bank holding company must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of a designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the bank holding company's regulatory capital: (a) all shares and ownership interests beneficially owned by the bank holding company, and all shares and ownership interests beneficially owned by entities controlled by the bank holding company, in designated entities in which the bank holding company has a substantial investment but over which it does not exercise control, (b) all loans held by the bank holding company, and all loans held by entities controlled by the bank holding company, that were made to designated entities in which the bank holding company has a substantial investment but over which it does not exercise control, and (c) all outstanding guarantees given by the bank holding company, and all outstanding guarantees given by entities controlled by the bank holding company, on behalf of designated entities in which the bank holding company has a substantial investment but over which it does not exercise control.
Restriction concerning loans	4. Subject to sections 5 and 6, a bank holding company that has a substantial investment in a designated entity over which it does not exercise control must not make a loan to, or give a guarantee on behalf of, the designated entity, or permit entities controlled by it to do so, if, after the making of the loan or the giving of the guarantee, the total value of the shares, ownership interests, loans and guarantees referred to in paragraphs 3(a) to (c) would exceed 50% of the bank holding company's regulatory capital.
Limitation	5. In paragraphs 3(a) to (c) and section 4, any reference to a substantial investment that a bank holding company has does not include a substantial investment acquired by the bank holding company under regulations made under paragraph 936(a) of the Act other than these Regulations.
Calculation of "total value" in section 3 or 4	6. For the purpose of calculating the total value referred to in section 3 or 4 in respect of a bank holding company, no amount may be included in respect of shares or ownership interests acquired under sections 933 to 935 of the Act or acquired by a bank controlled by the bank holding company under subsection 193(12) or (13) of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1985.
	COMING INTO FORCE
Coming into force	7. These Regulations come into force on the day on which section 936 of the Bank Act, as enacted by section 183 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Minority Investment (Banks) Regulations

Statutory Authority

Bank Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

definitions	MINORITY INVESTMENT (BANKS) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act" « Loi »	"Act" means the Bank Act.
"designated entity" « entité désignée »	"designated entity" means, (a) an entity referred to in any of paragraphs 468(1)(a) to (j) of the Act; (b) an entity whose business includes one or more of the activities referred to in paragraph 468(2)(a) of the Act 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 factoring entity, a finance entity or a financial leasing entity; or (c) an entity whose business includes an activity referred to in paragraph 468(2)(b) of the Act, including a specialized financing entity, other than an entity in which a bank is permitted to acquire or increase a substantial investment under subparagraph 468(4)(d)(iii) of the Act.
"regulatory capital" « capital réglementaire »	"regulatory capital" has the same meaning as in section 3 of the Regulatory Capital (Banks) Regulations.
"value" « valeur »	"value" means (a) in respect of a share, ownership interest or loan held by a bank at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the bank prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 308(4) of the Act; and (b) in respect of a guarantee, the face value of the guarantee.
	GENERAL
Permitted substantial investments	2. Subject to section 3, (a) for the purposes of subparagraphs 468(4)(a)(ii), (b)(ii), (c)(ii) and (d)(ii) of the Act, a bank may acquire or increase a substantial investment in a designated entity; and (b) for the purpose of paragraph 468(11)(a) of the Act, if a bank controls a designated entity, the bank may give up control of the designated entity while keeping a substantial investment in it.
Restriction concerning investments	3. Subject to sections 5 and 6, a bank must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of the designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the bank's regulatory capital: (a) all shares and ownership interests beneficially owned by the bank, and all shares and ownership interests beneficially owned by entities controlled by the bank, in designated entities in which the bank has a substantial investment but over which it does not exercise control, (b) all loans held by the bank, and all loans held by entities controlled by the bank, that were made to designated entities in which the bank has a substantial investment but over which it does not exercise control, and (c) all outstanding guarantees given by the bank, and all outstanding guarantees given by entities controlled by the bank, on behalf of designated entities in which the bank has a substantial investment but over which it does not exercise control.
Restriction concerning loans	4. Subject to sections 5 and 6, a bank that has a substantial investment in a designated entity over which it does not exercise control must not make a loan to, or give a guarantee on behalf of, the designated entity, or permit entities controlled by it to do so, if, after the making of the loan or the giving of the guarantee, the total value of the shares, ownership interests, loans and guarantees referred to in paragraphs 3(a) to (c) would exceed 50% of the bank's regulatory capital.
Limitation	5. In paragraphs 3(a) to (c) and section 4, any reference to a substantial investment that a bank has does not include a substantial investment acquired by the bank (a) under regulations made under paragraph 474(a) of the Act, other than these Regulations; (b) under subsection 466(3.1) of the Act, as that subsection read before the coming into force of section 127 of the Financial Consumer Agency of Canada Act, S.C. 2001, c. 9; or (c) by way of an investment of a specialized financing entity controlled by the bank.
Calculation of "total value" in section 3 or 4	6. For the purpose of calculating the total value referred to in section 3 or 4, no amount may be included in respect of shares or ownership interests acquired under sections 471 to 473 of the Act or subsection 193(12) or (13) of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1985.
	REPEAL
Repeal	7. The Minority Investment (Banks) Regulations(see footnote 1) are repealed.
	COMING INTO FORCE
Coming into force	8. These Regulations come into force on the day on which section 474 of the Bank Act, as enacted by section 127 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Minority Investment (Cooperative Credit Associations) Regulations

Statutory Authority

Cooperative Credit Associations Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

definitions	MINORITY INVESTMENT (COOPERATIVE CREDIT ASSOCIATIONS) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act" « Loi »	"Act" means the Cooperative Credit Associations Act.
"designated entity" « entité désignée »	"designated entity" means (a) an entity referred to in any of paragraphs 390(1)(a) to (h) of the Act; (b) an entity whose business includes one or more of the activities referred to in paragraph 390(2)(a) of the Act 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 factoring entity, a finance entity or a financial leasing entity; or (c) an entity whose business includes an activity referred to in paragraph 390(2)(b) of the Act, including a specialized financing entity, other than an entity in which an association is permitted to acquire or increase a substantial investment under subparagraph 390(4)(c)(iii) of the Act.
"regulatory capital" « capital réglementaire »	"regulatory capital" has the same meaning as in section 3 of the Regulatory Capital (Cooperative Credit Associations) Regulations.
"value" « valeur »	"value" means (a) in respect of a share, ownership interest or loan held by an association at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the association prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 292(4) of the Act; and (b) in respect of a guarantee, the face value of the guarantee.
	GENERAL
Permitted substantial investments	2. Subject to section 3, (a) for the purpose of subparagraphs 390(4)(a)(ii), (b)(ii) and (c)(ii) of the Act, an association may acquire or increase a substantial investment in a designated entity; and (b) for the purpose of paragraph 390(10)(a) of the Act, if an association controls a designated entity, the association may give up control of the designated entity while keeping a substantial investment in it.
Restriction concerning investments	3. (1) Subject to sections 5 and 6, an association must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of a designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the association's regulatory capital: (a) all shares and ownership interests beneficially owned by the association, and all shares and ownership interests beneficially owned by entities controlled by the association, in designated entities in which the association has a substantial investment but over which it does not exercise control, (b) all loans held by the association, and all loans held by entities controlled by the association, that were made to designated entities in which the association has a substantial investment but over which it does not exercise control, other than loans to designated entities that are not foreign institutions and that are deemed to be controlled by a group of associations, and (c) all outstanding guarantees given by the association, and all outstanding guarantees given by entities controlled by the association, on behalf of designated entities in which the association has a substantial investment but over which it does not exercise control.
Meaning of "control" in paragraph (1)(b)	(2) For the purpose of paragraph (1)(b), a designated entity is deemed to be controlled by a group of associations if the association mentioned in that paragraph and other associations beneficially own securities of the designated entity in such a number that, if the association and the other associations were one association, that association would control the designated entity.
Restriction concerning loans	4. Subject to sections 5 and 6, an association that has a substantial investment in a designated entity over which it does not exercise control must not make a loan to, or give a guarantee on behalf of, the designated entity, or permit entities controlled by it to do so, if, after the making of the loan or the giving of the guarantee, the total value of the shares, ownership interests, loans and guarantees referred to in paragraphs 3(1)(a) to (c) would exceed 50% of the association's regulatory capital.
Limitation	5. In paragraphs 3(1)(a) to (c) and section 4, any reference to a substantial investment that an association has does not include a substantial investment acquired by the association (a) under regulations made under paragraph 396(a) of the Act, other than these Regulations; or (b) by way of an investment of a specialized financing entity controlled by the association.
Calculation of "total value" in section 3 or 4	6. For the purposes of calculating the total value referred to in subsection 3(1) or section 4 in respect of an association, no amount may be included in respect of shares or ownership interests acquired under sections 393 to 395 of the Act or acquired by a bank controlled by the association under subsection 193(12) or (13) of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1985.
	REPEAL
Repeal	7. The Minority Investment (Cooperative Credit Associations) Regulations(see footnote 2) are repealed.
	COMING INTO FORCE
Coming into force	8. These Regulations come into force on the day on which section 396 of the Cooperative Credit Associations Act, as enacted by section 314 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Minority Investment (Insurance Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

définitions	MINORITY INVESTMENT (INSURANCE COMPANIES) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act" « Loi »	"Act" means the Insurance Companies Act.
"designated entity" « entité désignée »	"designated entity" means (a) an entity referred to in any of paragraphs 495(1)(a) to (j) of the Act; (b) an entity whose business includes one or more of the activities referred to in paragraph 495(2)(a) of the Act 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 factoring entity, a finance entity or a financial leasing entity; or (c) an entity whose business includes an activity referred to in paragraph 495(2)(b) or (4)(b) of the Act, including a specialized financing entity, other than an entity in which a company is permitted to acquire or increase a substantial investment under subparagraph 495(6)(c)(iii) of the Act.
"regulatory capital" « capital réglementaire »	"regulatory capital" has the same meaning as in section 3 of the Regulatory Capital (Insurance Companies) Regulations.
"value" « valeur »	"value" means (a) in respect of a share, ownership interest or loan held by a company at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 331(4) of the Act; and (b) in respect of a guarantee, the face value of the guarantee.
	GENERAL
Permitted substantial investments	2. Subject to section 3, (a) for the purposes of subparagraphs 495(6)(a)(ii), (b)(ii) and (c)(ii) of the Act, a company may acquire or increase a substantial investment in a designated entity; and (b) for the purpose of paragraph 495(12)(a) of the Act, if a company controls a designated entity, the company may give up control of the designated entity while keeping a substantial investment in it.
Restriction concerning investments	3. Subject to sections 5 and 6, a company must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of a designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the company's regulatory capital: (a) all shares and ownership interests beneficially owned by the company, and all shares and ownership interests beneficially owned by entities controlled by the company, in designated entities in which the company has a substantial investment but over which it does not exercise control, (b) all loans held by the company, and all loans held by entities controlled by the company, that were made to designated entities in which the company has a substantial investment but over which it does not exercise control, and (c) all outstanding guarantees given by the company, and all outstanding guarantees given by entities controlled by the company, on behalf of designated entities in which the company has a substantial investment but over which it does not exercise control.
Restriction concerning loans	4. Subject to sections 5 and 6, a company that has a substantial investment in a designated entity over which it does not exercise control must not make a loan to, or give a guarantee on behalf of, the designated entity, or permit entities controlled by it to do so, if, after the making of the loan or the giving of the guarantee, the total value of the shares, ownership interests, loans and guarantees referred to in paragraphs 3(a) to (c) would exceed 50% of the company's regulatory capital.
Limitation	5. In paragraphs 3(a) to (c) and section 4, any reference to a substantial investment that a company has does not include a substantial investment acquired by the company (a) under regulations made under paragraph 501(a) of the Act, other than these Regulations; (b) under subsection 493(3.1) of the Act, as that subsection read before the coming into force of section 426 of the Financial Consumer Agency of Canada Act, S.C. 2001, c. 9; or (c) by way of an investment of a specialized financing entity controlled by the company.
Calculation of "total value" in section 3 or 4	6. For the purpose of calculating the total value referred to in section 3 or 4 in respect of a company, no amount may be included in respect of shares or ownership interests acquired under sections 498 to 500 of the Act or acquired by a bank controlled by the company under subsection 193(12) or (13) of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1985.
	REPEAL
Repeal	7. The Minority Investment (Insurance Companies) Regulations(see footnote 3) are repealed.
	COMING INTO FORCE
Coming into force	8. These Regulations come into force on the day on which section 501 of the Insurance Companies Act, as enacted by section 426 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Minority Investment (Insurance Holding Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Aggregate Financial Exposure (Banks) Regulations.

PROPOSED REGULATORY TEXT

For the Proposed Regulatory Text, see the Aggregate Financial Exposure (Banks) Regulations.

definitions	MINORITY INVESTMENT (INSURANCE HOLDING COMPANIES) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act" « Loi »	"Act" means the Insurance Companies Act.
"designated entity" « entité désignée »	"designated entity" means (a) an entity referred to in any of paragraphs 971(1)(a) to (j) of the Act; (b) an entity whose business includes one or more of the activities referred to in paragraph 971(2)(a) of the Act 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 factoring entity, a finance entity or a financial leasing entity; or (c) an entity whose business includes an activity referred to in paragraph 971(2)(b) of the Act or a specialized financing entity, other than an entity in which an insurance holding company is permitted to acquire or increase a substantial investment under subparagraph 971(4)(c)(iii) of the Act.
"regulatory capital" « capital réglementaire »	"regulatory capital" has the same meaning as in section 2 of the Regulatory Capital (Insurance Holding Companies) Regulations.
"value" « valeur »	"value" means (a) in respect of a share, ownership interest or loan held by an insurance holding company at a particular time, the book value of the share, ownership interest or loan that would be reported on the balance sheet of the insurance holding company prepared as at that time in accordance with the accounting principles and specifications of the Superintendent referred to in subsection 887(4) of the Act; and (b) in respect of a guarantee, the face value of the guarantee.
	GENERAL
Permitted substantial investments	2. Subject to section 3, (a) for the purposes of subparagraphs 971(4)(a)(ii), (b)(ii) and (c)(ii) of the Act, an insurance holding company may acquire or increase a substantial investment in a designated entity; and (b) for the purpose of paragraph 971(10)(a) of the Act, if an insurance holding company controls a designated entity, the insurance holding company may give up control of the designated entity while keeping a substantial investment in it.
Restriction concerning investments	3. Subject to sections 5 or 6, an insurance holding company must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of the designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the insurance holding company's regulatory capital: (a) all shares and ownership interests beneficially owned by the insurance holding company, and all shares and ownership interests beneficially owned by entities controlled by the insurance holding company, in designated entities in which the insurance holding company has a substantial investment but over which it does not exercise control, (b) all loans held by the insurance holding company, and all loans held by entities controlled by the insurance holding company, that were made to designated entities in which the insurance holding company has a substantial investment but over which it does not exercise control, and (c) all outstanding guarantees given by the insurance holding company, and all outstanding guarantees given by entities controlled by the insurance holding company, on behalf of designated entities in which the insurance holding company has a substantial investment but over which it does not exercise control.
Restriction concerning loans	4. Subject to sections 5 and 6, an insurance holding company that has a substantial investment in a designated entity over which it does not exercise control must not make a loan to, or give a guarantee on behalf of, the designated entity, or permit entities controlled by it to do so, if, after the making of the loan or the giving of the guarantee, the total value of the shares, ownership interests, loans and guarantees referred to in paragraphs 3(a) to (c) would exceed 50% of the insurance holding company's regulatory capital.
Limitation	5. In paragraphs 3(a) to (c) and section 4, any reference to a substantial investment that an insurance holding company has does not include a substantial investment acquired by the insurance holding company under regulations made under paragraph 977(a) of the Act other than these Regulations.
Calculation of "total value" in section 3 or 4	6. For the purpose of calculating the total value referred to in section 3 or 4 in respect of an insurance holding company, no amount may be included in respect of shares or ownership interests acquired under sections 974 to 976 of the Act or acquired by a bank controlled by the insurance holding company under subsection 193(12) or (13) of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1985.
	COMING INTO FORCE
Coming into force	7. These Regulations come into force on the day on which section 977 of the Insurance Companies Act, as enacted by section 465 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, comes into force.
	[31-1-o]

Footnote 1

SOR/97-371

Footnote 2

SOR/97-372

Footnote 3

SOR/97-373

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