(c) a widely held insurance holding company that controls, within the meaning of paragraph 3(1)(d), the particular company in the circumstances referred to in subsection (6) is deemed, as of the effective date of the order, to no longer be an insurance holding company to which subsection (6) applies.

Deeming

(18) For the purposes of this Act, after the day that is two years after December 31, 1999,

    (a) a converted company having an aggregate of surplus and minority interests in an amount that is one billion dollars or more but less than five billion dollars, according to its last annual statement dated before the effective date of the letters patent of conversion of the converted company is deemed to no longer be a company in respect of which subsection (11) applies;

    (b) a company that controls, within the meaning of paragraph 3(1)(d), a converted company referred to in paragraph (a) in the circumstances referred to in subsection (12) is deemed to no longer be a company to which subsection (12) applies; and

    (c) an insurance holding company that controls, within the meaning of paragraph 3(1)(d), a converted company referred to in paragraph (a) in the circumstances referred to in subsection (13) is deemed to no longer be an insurance holding company to which subsection (13) applies.

402. The Act is amended by adding the following after section 407:

Life companies - major shareholder

407.01 (1) If a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies controls a life company and a person becomes a major shareholder of the life company or of any entity that also controls the life company, the converted company or company, as the case may be, must do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the life company or entity that controls the life company,

    (a) the converted company or the company no longer controls the life company; or

    (b) the life company or the entity that controls the life company does not have any major shareholder other than the converted company or the company, as the case may be, or any entity that the converted company or the company controls.

Exemption

(2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed.

Extension

(3) If general market conditions so warrant and the Minister is satisfied that the converted company or the company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Life companies - major shareholder

407.011 (1) Despite subsection 407.01(1), if a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies controls a life company in respect of which subsection 407.01(1) does not apply by reason of subsection 407.01(2) and the equity of the life company reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the life company reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the life company or of any entity that also controls the life company, the converted company or company must do all things necessary to ensure that, on the day that is three years after that day,

    (a) the converted company or company no longer controls the life company; or

    (b) the life company or the entity that controls the life company does not have any major shareholder other than the converted company or the company or any entity that the converted company or company controls.

Extension

(2) If general market conditions so warrant and the Minister is satisfied that the converted company or the company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Life companies - significant interest

407.02 (1) If a converted company in respect of which subsection 407(11) applies or a company to which subsection 407(12) applies controls a life company and a person acquires a significant interest in any class of shares of the life company or of any entity that also controls the life company, the converted company or company, as the case may be, must do all things necessary to ensure that, on the day that is one year after the person acquired the significant interest in the class of shares of the life company or entity that controls the life company,

    (a) the converted company or the company no longer controls the life company; or

    (b) no person has a significant interest in any class of shares of the life company or the entity that controls the life company, other than the converted company or the company, as the case may be, or any entity that the converted company or the company controls.

Exemption

(2) Subsection (1) does not apply in respect of a life company with equity of less than two hundred and fifty million dollars, or any other amount that may be prescribed.

Extension

(3) If general market conditions so warrant and the Minister is satisfied that the converted company or the company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Prohibition against significant interest

407.03 (1) No person who has a significant interest in any class of shares of a widely held converted company in respect of which subsection 407(4) applies or of a widely held company to which subsection 407(5) applies may have a significant interest in any class of shares of a subsidiary of the converted company or company, as the case may be, that is a life company or an insurance holding company.

Prohibition against significant interest

(2) No person who has a significant interest in any class of shares of a life company may have a significant interest in any class of shares of

    (a) a widely held converted company in respect of which subsection 407(4) applies that controls the life company;

    (b) a widely held company to which subsection 407(5) applies that controls the life company; or

    (c) a widely held insurance holding company to which subsection 407(6) applies that controls the life company.

403. The Act is amended by adding the following after section 407.1:

Prohibition against control

407.2 (1) Despite section 407.1, no person shall control, within the meaning of paragraph 3(1)(d), a converted company in respect of which subsection 407(4) or (11) applies or a company to which subsection 407(5) or (12) applies.

Exception

(2) Subsection (1) does not apply to a company to which subsection 407(5) or (12) applies or to an insurance holding company to which subsection 407(6) or (13) applies that is permitted to control, within the meaning of paragraph 3(1)(d), under those subsections, the converted company.

Exception

(2.1) Subsection (1) does not apply to an insurance holding company to which subsection 407(10) or (16) applies that is permitted to control, within the meaning of paragraph 3(1)(d), under those subsections, the company.

Exception - other entities

(3) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the converted company or company, as the case may be, if the entity is controlled, within the meaning of that paragraph, by a company to which subsection 407(5) or (12) applies, or an insurance holding company to which subsection 407(6) or (13) applies, that is permitted to be a major shareholder of the converted company or company, as the case may be, or to have a significant interest in any class of shares of the converted company or company, as the case may be.

Loss of control

(4) Despite subsections (1) and 407(4), if the converted company referred to in subsection (1) is a converted company in respect of which subsection 407(4) applies, a company to which subsection 407(5) applies or an insurance holding company to which subsection 407(6) applies may be a major shareholder of the converted company and cease to control, within the meaning of paragraph 3(1)(d), the converted company if the company or the insurance holding company, as the case may be, has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the converted company on the expiration of the day specified in the agreement.

Exception

(4.1) Despite subsections (1) and 407(9), if the company referred to in subsection (1) is a company to which subsection 407(5) applies, an insurance holding company to which subsection 407(6) applies may be a major shareholder of the company and cease to control, within the meaning of paragraph 3(1)(d), the company if the insurance holding company has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the company on the expiration of the day specified in the agreement.

Extension

(5) If general market conditions so warrant and the Minister is satisfied that the company or the insurance holding company, as the case may be, has used its best efforts to be in compliance with subsection (4) or (4.1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Loss of control

(6) Despite subsections (1) and 407(11), if the converted company referred to in subsection (1) is a converted company in respect of which subsection 407(11) applies, a company to which subsection 407(12) applies or an insurance holding company to which subsection 407(13) applies may have a significant interest in a class of shares of the converted company and cease to control, within the meaning of paragraph 3(1)(d), the converted company if the company or the insurance holding company, as the case may be, has entered into an agreement with the Minister to do all things necessary to ensure that it does not have a significant interest in any class of shares of the converted company on the expiration of the day specified in the agreement.

Exception

(6.1) Despite subsections (1) and 407(15), if the company referred to in subsection (1) is a company to which subsection 407(12) applies, an insurance holding company to which subsection 407(13) applies may have a significant interest in a class of shares of the company and cease to control, within the meaning of paragraph 3(1)(d), the company if the insurance holding company has entered into an agreement with the Minister to do all things necessary to ensure that it does not have a significant interest in any class of shares of the company on the expiration of the day specified in the agreement.

Extension

(7) If general market conditions so warrant and the Minister is satisfied that the company or the insurance holding company, as the case may be, has used its best efforts to be in compliance with subsection (6) or (6.1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

404. Subsections 409(1) to (3) of the Act are replaced by the following:

Where approval not required

409. (1) Despite subsections 407(1) and (2) and section 408, the approval of the Minister is not required in respect of a company, other than a converted company in respect of which subsection 407(4) applies or a company to which subsection 407(5) applies, if a person with a significant interest in a class of shares of the company or an entity controlled by a person with a significant interest in a class of shares of the company purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

Percentage

(2) Subject to subsection (3), for the purposes of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the company on the later of June 1, 1992 and the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister.

When approval not required

(3) If a person has a significant interest in a class of shares of a company and the person's percentage of that class has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of

    (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the company on the later of June 1, 1992 and the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister, and

    (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the company at any time after the later of June 1, 1992 and the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the company, or of control of an entity that held shares of that class of shares of the company, for which approval was given by the Minister.

405. Subsection 410(1) of the Act is replaced by the following:

When approval not required

410. (1) Despite subsections 407(1) and (2) and section 408, the approval of the Minister is not required if

    (a) the Superintendent has, by order, directed the company to increase its capital and shares of the company are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

    (b) a person who controls, within the meaning of paragraph 3(1)(a), the company acquires additional shares of the company.

Exception

(1.1) Paragraph (1)(a) does not apply in respect of a converted company in respect of which subsection 407(4) or (11) applies or a company to which subsection 407(5) or (12) applies.

406. Section 411 of the Act is replaced by the following:

Public holding requirement

411. (1) Every company shall, from and after the day determined under this section in respect of that company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the company and that are

    (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

    (b) shares none of which is beneficially owned by a person who is a major shareholder of the company in respect of the voting shares of the company or by any entity that is controlled by a person who is a major shareholder of the company in respect of such shares.

Determina-
tion of day

(2) If the company has equity of one billion dollars or more on the day it comes into existence , the day referred to in subsection (1) is the day that is three years after that day and, in the case of any other company, the day referred to in subsection (1) is the day that is three years after the day of the first annual meeting of the shareholders and policyholders of the company held after the equity of the company first reaches one billion dollars.

Extension

(3) If general market conditions so warrant and the Minister is satisfied that a company has used its best efforts to be in compliance with this section on the day determined under subsection (2) , the Minister may specify a later day as the day from and after which the company must comply with subsection (1).

407. Subsection 412(1) of the Act is replaced by the following:

Limit on assets

412. (1) Unless an exemption order with respect to the company is granted under section 414, if a company fails to comply with section 411 in any month , the Minister may, by order, require the company not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the company's average total assets in the three month period ending on the last day of the month immediately before the month specified in the order.

408. (1) The portion of subsection 414(1) of the Act before paragraph (c) is replaced by the following:

Exemption by order of Minister

414. (1) An entity that controls a company and that is

    (a) an insurance holding company that is in compliance with section 938,

    (b) a widely held bank,

    (b.1) a bank that would be in compliance with section 411 if it were a company,

    (b.2) a widely held bank holding company,

    (b.3) a bank holding company that would be in compliance with section 411 if it were a company,

(2) Paragraph 414(1)(e) of the Act is replaced by the following:

    (e) an association to which the Cooperative Credit Associations Act applies,

(3) Paragraph 414(5)(a) of the Act is replaced by the following:

    (a) the entity that applied for the exemption order ceases to control the company;

409. Section 416 of the Act is replaced by the following:

Acquisition of control permitted

416. (1) Subject to subsection (2) and sections 408 and 417, section 411 does not apply in respect of a company if a person acquires control of a company with equity of one billion dollars or more through the purchase or other acquisition of all or any number of the shares of the company by the person or by any entity controlled by the person.

Undertaking required

(2) Subsection (1) applies only if the person provides the Minister with an undertaking satisfactory to the Minister to do all things necessary so that, within three years after the acquisition, or any other period that the Minister may specify, the company has voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the company and that are

    (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

    (b) shares none of which is beneficially owned by a person who is a major shareholder of the company in respect of the voting shares of the company or by any entity that is controlled by a person who is a major shareholder of the company in respect of such shares.

1997, c. 15, s. 246

410. (1) The portion of subsection 418(1) of the Act before paragraph (a) is replaced by the following:

Restriction on voting rights

418. (1) If , with respect to any company, a particular person contravenes subsection 407(1), (4), (9), (11) or (15) or section 407.03 , 407.1 or 407.2 or fails to comply with an undertaking referred to in subsection 416(2) or with any term or condition imposed under section 421 , no person, and no entity controlled by the particular person, shall, in person or by proxy, exercise any voting rights

1997, c. 15, s. 246

(2) Subsection 418(2) of the Act is replaced by the following:

Subsection (1) ceases to apply

(2) Subsection (1) ceases to apply in respect of a person when, as the case may be ,

    (a) the shares to which the contravention relates have been disposed of;

    (b) the person ceases to control the company within the meaning of paragraph 3(1)(d);