``finance
entity''
« entité
s'occupant de
finance-
ment »
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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 »
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``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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``participa-
ting share''
« action
partici-
pante »
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``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 »
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``prescribed subsidiary'' means a subsidiary
that is one of a prescribed class of
subsidiaries.
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``real property
brokerage
entity''
« courtier
immobilier »
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``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 »
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``specialized financing entity'' means a
specialized financing entity as defined in
the regulations.
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| Members of
an
association's
group
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(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
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(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
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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
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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
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(2) An association may, subject to Part XII,
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
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(3) An association may, subject to Part XII,
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, subject to Part
XII, 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
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(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
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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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| 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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(b) a bank or a bank holding company as
that expression is defined in section 2 of
the Bank Act;
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(c) a body corporate to which the Trust
and Loan Companies Act applies;
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(d) an insurance company, a fraternal
benefit society or an insurance holding
company incorporated or formed by or
under the Insurance Companies Act;
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(e) a trust, loan or insurance corporation
incorporated or formed by or under an
Act of the legislature of a province;
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(f) a cooperative credit society
incorporated or formed, and regulated,
by or under an Act of the legislature of a
province;
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(g) an entity that is incorporated or
formed by or under an Act of Parliament
or of the legislature of a province and that
is primarily engaged in dealing in
securities; or
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(h) an entity that is incorporated or
formed, and regulated, otherwise than by
or under an Act of Parliament or of the
legislature of a province and that is
primarily engaged outside Canada in a
business that, if carried on in Canada,
would be the business of banking, the
business of a cooperative credit society,
the business of insurance, the business of
providing fiduciary services or the
business of dealing in securities.
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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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(a) engaging in any financial service
activity or in any other activity that a retail
association is permitted to engage in under
subsection 375(2) or section 376 or 377;
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(b) acquiring or holding shares of, or
ownership interests in, entities in which an
association is permitted under this Part to
hold or acquire;
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(c) engaging in the provision of any services
exclusively to any or all of the following, so
long as the entity is providing those services
to the association or any member of the
association's group:
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(ii) any member of the association's
group,
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(iii) any entity that is primarily engaged
in the business of providing financial
services,
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(iv) any permitted entity in which an
entity referred to in subparagraph (iii) has
a substantial investment, or
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(v) any prescribed person, if it is doing so
under prescribed terms and conditions, if
any are prescribed;
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(d) engaging in any activity that a retail
association is permitted to engage in, other
than an activity referred to in paragraph (a)
or (e), that relates to
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(i) the promotion, sale, delivery or
distribution of a financial product or
financial service that is provided by the
association or any member of the
association's group, or
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(ii) if a significant portion of the business
of the entity involves an activity referred
to in subparagraph (i), the promotion,
sale, delivery or distribution of a
financial product or financial service that
is provided by any other entity that is
primarily engaged in the business of
providing financial services;
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(e) engaging in the activities referred to in
the definition ``mutual fund entity'',
``mutual fund distribution entity'' or ``real
property brokerage entity'' in subsection
386(1); and
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(f) engaging in prescribed activities, under
prescribed terms and conditions, if any are
prescribed.
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| Restriction
|
(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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(a) activities that an association is not
permitted to engage in under any of sections
378, 382 and 382.1;
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(b) dealing in securities, except as may be
permitted under paragraph (2)(e) or as may
be permitted either to an association under
paragraph 376(1)(f) or to a retail association
under subparagraph 376(1)(i)(ii);
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(c) activities that an association is not
permitted to engage in under section 381 if
the entity engages in the activities of a
finance entity or of any other entity as may
be prescribed;
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(d) acquiring control of or acquiring or
holding a substantial investment in another
entity unless
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(i) in the case of an entity that is
controlled by the association, the
association itself would be permitted
under this Part to acquire a substantial
investment in the other entity, or
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(ii) in the case of an entity that is not
controlled by the association, the
association itself would be permitted to
acquire a substantial investment in the
other entity under subsection (1) or (2) or
388(2), paragraph 388(3)(b) or (c) or
subsection 388(4); or
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(e) any prescribed activity.
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| Control
|
(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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(a) an entity referred to in any of paragraphs
(1)(a) to (h), unless
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(i) the association controls, within the
meaning of paragraph 3(1)(e), the entity,
or would thereby acquire control, within
the meaning of that paragraph, of the
entity, or
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(ii) the association is permitted by
regulations made under paragraph 396(a)
to acquire or increase the substantial
investment;
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(b) an entity whose business includes one or
more of the activities referred to in
paragraph (2)(a) 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 finance
entity, a factoring entity and a financial
leasing entity, unless
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(i) the association controls, within the
meaning of paragraph 3(1)(e), the entity,
or would thereby acquire control, within
the meaning of that paragraph, of the
entity, or
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(ii) the association is permitted by
regulations made under paragraph 396(a)
to acquire or increase the substantial
investment; or
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