464. (1) The following definitions apply in this Part.

“factoring entity” means a factoring entity as defined in the regulations.

“finance entity” means a finance entity as defined in the regulations.

“financial leasing entity” means an entity

(a) the activities of which 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

(b) that, in conducting the activities referred to in paragraph (a) in Canada, does not

(i) direct its customers or potential customers to particular dealers in the leased property or the property to be leased,

(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

(iii) enter into lease agreements with natural persons in respect of personal household property, as that expression is defined by the regulations.

“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.

“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

(a) a fire-engine, bus, ambulance or utility truck; or

(b) any other special purpose motorized vehicle that contains significant special features that make it suitable for a specific purpose.

“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

(a) the proceeds of the sales of any such interests, less any sales commissions and service fees, are paid to the mutual fund; and

(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.

“mutual fund entity” means an entity

(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

(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.

“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.

“permitted entity” means an entity in which a bank is permitted to acquire a substantial investment under section 468.

“prescribed subsidiary” means a subsidiary that is one of a prescribed class of subsidiaries.

“real property brokerage entity” means an entity that is primarily engaged in

(a) acting as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property; and

(b) the provision of consulting or appraisal services in respect of real property.

“specialized financing entity” means a specialized financing entity as defined in the regulations.

(2) For the purpose of this Part, a member of a bank’s group is any of the following:

(a) an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank;

(b) a subsidiary of the bank or of an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank;

(c) an entity in which the bank, or an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank, has a substantial investment; or

(d) a prescribed entity in relation to the bank.

(3) This Part does not apply in respect of

(a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 479(a) to be an interest in real property; or

(b) the holding of a security interest in securities of an entity.

1991, c. 46, ss. 464, 603; 1993, c. 34, s. 9(F); 1997, c. 15, s. 56; 2001, c. 9, s. 127.

465. The directors of a bank shall establish and the bank 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.

1991, c. 46, s. 465; 2001, c. 9, s. 127.

466. (1) Subject to subsections (2) to (4), no bank shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.

(2) A bank may, subject to Part XI, acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of

(a) an acquisition of control of an entity referred to in any of paragraphs 468(1)(a) to (j), or of a prescribed entity, that controls or has a substantial investment in the entity; or

(b) an acquisition of shares or ownership interests in the entity by

(i) an entity referred to in any of paragraphs 468(1)(a) to (j), or a prescribed entity, that is controlled by the bank, or

(ii) an entity controlled by an entity referred to in any of paragraphs 468(1)(a) to (j), or a prescribed entity, that is controlled by the bank.

(3) A bank may, subject to Part XI, acquire control of, or acquire or increase a substantial investment in, an entity by way of

(a) a temporary investment permitted by section 471;

(b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 472; or

(c) a realization of security permitted by section 473.

(4) A bank may, subject to Part XI, 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 467(d) concerning specialized financing.

(5) A bank is deemed not to contravene subsection (1) if the bank 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 bank.

1991, c. 46, s. 466; 1997, c. 15, s. 57; 2001, c. 9, s. 127.

467. The Governor in Council may make regulations

(a) respecting the determination of the amount or value of loans, investments and interests for the purposes of this Part;

(b) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by a bank and its prescribed subsidiaries to or in a person and any persons connected with that person;

(c) specifying the classes of persons who are connected with any person for the purposes of paragraph (b); and

(d) concerning specialized financing for the purposes of subsection 466(4).

1991, c. 46, s. 467; 2001, c. 9, s. 127.

468. (1) Subject to subsections (4) to (6) and Part XI, a bank may acquire control of, or acquire or increase a substantial investment in

(a) a bank;

(b) a bank holding company;

(c) a body corporate to which the Trust and Loan Companies Act applies;

(d) an association to which the Cooperative Credit Associations Act applies;

(e) an insurance company or a fraternal benefit society incorporated or formed by or under the Insurance Companies Act;

(f) an insurance holding company;

(g) a trust, loan or insurance corporation incorporated or formed by or under an Act of the legislature of a province;

(h) a cooperative credit society incorporated or formed, and regulated, by or under an Act of the legislature of a province;

(i) 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

(j) 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.

(2) Subject to subsections (3) to (6) and Part XI, a bank 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 (j), whose business is limited to one or more of the following:

(a) engaging in any financial service activity that a bank is permitted to engage in under any of paragraphs 409(2)(a) to (d) or any other activity that a bank is permitted to engage in under section 410 or 411;

(b) acquiring or holding shares of, or ownership interests in, entities in which a bank is permitted under this Part to hold or acquire;

(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 bank or any member of the bank’s group, namely,

(i) the bank,

(ii) any member of the bank’s group,

(iii) any entity that is primarily engaged in the business of providing financial services,

(iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or

(v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;

(d) engaging in any activity that a bank is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to

(i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the bank or any member of the bank’s group, or

(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;

(e) engaging in the activities referred to in the definition “mutual fund entity”, “mutual fund distribution entity” or “real property brokerage entity” in subsection 464(1); and

(f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.

(3) A bank 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

(a) activities that a bank is not permitted to engage in under any of sections 412, 417 and 418;

(b) dealing in securities, except as may be permitted under paragraph (2)(e) or as may be permitted to a bank under paragraph 409(2)(c);

(c) activities that a bank is not permitted to engage in under section 416 if the entity engages in the activities of a finance entity or of any other entity as may be prescribed;

(d) acquiring control of or acquiring or holding a substantial investment in another entity unless

(i) in the case of an entity that is controlled by the bank, the bank itself would be permitted under this Part to acquire a substantial investment in the other entity, or

(ii) in the case of an entity that is not controlled by the bank, the bank itself would be permitted to acquire a substantial investment in the other entity under subsection (1) or (2), subsection 466(2), paragraph 466(3)(b) or (c) or subsection 466(4); or

(e) any prescribed activity.

(4) Subject to subsection (8) and the regulations, a bank may not acquire control of, or acquire or increase a substantial investment in,

(a) an entity referred to in paragraph (1)(a) or (b), unless

(i) the bank controls, within the meaning of paragraphs 3(1)(a) and (d), the entity or would thereby acquire control, within the meaning of those paragraphs, of the entity, or

(ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment;

(b) an entity referred to in any of paragraphs (1)(c) to (j), unless

(i) the bank controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or

(ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment;

(c) 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

(i) the bank controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or

(ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment; or

(d) an entity whose business includes an activity referred to in paragraph (2)(b), including a specialized financing entity, unless

(i) the bank controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity,

(ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment, or

(iii) subject to prescribed terms and conditions, if any are prescribed, the activities of the entity do not include the acquisition or holding of control of, or the acquisition or holding of shares or other ownership interests in, an entity referred to in any of paragraphs (a) to (c) or an entity that is not a permitted entity.

(5) Subject to the regulations, a bank may not, without the prior written approval of the Minister,

(a) acquire control of an entity referred to in any of paragraphs (1)(g) to (i) from a person who is not a member of the bank’s group;

(b) acquire control of an entity referred to in paragraph (1)(j) or (4)(c), other than an entity whose activities are limited to the activities of one or more of the following entities, if the control is acquired from an entity referred to in any of paragraphs (1)(a) to (f) that is not a member of the bank’s group:

(i) a factoring entity, or

(ii) a financial leasing entity;

(c) acquire control of, or acquire or increase a substantial investment in, an entity whose business includes one or more of the activities referred to in paragraph (2)(d);

(d) acquire control of, or acquire or increase a substantial investment in, an entity that engages in an activity described in paragraph 410(1)(c) or (c.1); or

(e) acquire control of, or acquire or increase a substantial investment in, an entity engaging in an activity prescribed for the purposes of paragraph (2)(f).

(6) Subject to subsection (7) and the regulations, a bank may not acquire control of, or acquire or increase a substantial investment in, an entity referred to in any of paragraphs (1)(g) to (j) and (4)(c) and (d), unless the bank obtains the approval of the Superintendent.

(7) Subsection (6) does not apply in respect of a particular transaction if

(a) the bank is acquiring control of an entity whose business includes an activity referred to in paragraph (2)(b), other than a specialized financing entity;

(b) the bank is acquiring control of an entity whose activities are limited to the activities of a factoring entity or a financial leasing entity; or

(c) the Minister has approved the transaction under subsection (5) or is deemed to have approved it under subsection 469(1).

(8) A bank need not control an entity referred to in paragraph (1)(j), 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 bank to control the entity.

(9) A bank that controls, within the meaning of paragraphs 3(1)(a) and (d), an entity referred to in paragraph (1)(a) or (b) may not give up control, within the meaning of paragraph 3(1)(a) or (d), of the entity while continuing to control, within the meaning of the other paragraph, the entity.

(10) A bank that, under paragraph (4)(b), (c) or (d), controls an entity may not, without the prior written approval of the Minister, give up control, within the meaning of paragraph 3(1)(d), of the entity while it continues to control the entity.

(11) A bank that, under subsection (4), controls an entity may, with the prior written approval of the Superintendent, give up control of the entity while keeping a substantial investment in the entity if

(a) the bank is permitted to do so by regulations made under paragraph 474(c); or

(b) the entity meets the conditions referred to in subparagraph (4)(d)(iii).

(12) If a bank controls, within the meaning of paragraph 3(1)(a), (b) or (c), an entity, subsections (5) and (6) do not apply in respect of any subsequent increases by the bank of its substantial investment in the entity so long as the bank continues to control the entity.

1991, c. 46, s. 468; 1997, c. 15, s. 58; 1999, c. 28, s. 26; 2001, c. 9, s. 127.

469. (1) If a bank obtains the approval of the Minister under subsection 468(5) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase, the bank indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Minister under subsection 468(5) or the Superintendent under subsection 468(6) and that indirect acquisition or increase is disclosed to the Minister in writing before the approval is obtained, the bank is deemed to have obtained the approval of the Minister or the Superintendent for that indirect acquisition or increase.

(2) If a bank obtains the approval of the Superintendent under subsection 468(6) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase the bank 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 bank is deemed to have obtained the approval of the Superintendent for that indirect acquisition or increase.

1991, c. 46, s. 469; 2001, c. 9, s. 127.

470. (1) If a bank controls a permitted entity, other than an entity referred to in any of paragraphs 468(1)(a) to (f), the bank shall provide the Superintendent with any undertakings that the Superintendent may require regarding

(a) the activities of the entity; and

(b) access to information about the entity.

(2) If a bank acquires control of an entity referred to in any of paragraphs 468(1)(g) to (j), the bank shall provide the Superintendent with any undertakings concerning the entity that the Superintendent may require.

(3) The Superintendent may enter into an agreement with the appropriate official or public body responsible for the supervision of an entity referred to in any of paragraphs 468(1)(g) to (j) 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.

(4) Despite any other provision of this Part, a bank shall not control a permitted entity, other than an entity referred to in any of paragraphs 468(1)(a) to (f), unless, in the course of the acquisition of control or within a reasonable time after the control is acquired, the bank obtains from the permitted entity an undertaking to provide the Superintendent with reasonable access to the records of the permitted entity.

1991, c. 46, s. 470; 2001, c. 9, s. 127.

471. (1) Subject to subsection (4), a bank 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, as the case may be, it shall do all things necessary to ensure that it no longer controls the entity or has a substantial investment in the entity.

(2) Despite subsection (1), if a bank 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 10 and the bank subsequently increases that substantial investment by way of a temporary investment, the bank 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.

(3) The Superintendent may, in the case of any particular bank 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.

(4) If a bank, 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 468(5) is required, the bank must, within 90 days after acquiring control or after acquiring or increasing the substantial investment,

(a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or

(b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity.

(5) If a bank, 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 468(6) is required, the Superintendent may, in the case of any particular bank that makes an application under this subsection, permit the bank 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.

1991, c. 46, s. 471; 2001, c. 9, s. 127.

472. (1) Despite anything in this Part, if a bank or any of its subsidiaries has made a loan to an entity and, under the terms of the agreement between the bank, 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 bank may acquire

(a) if the entity is a body corporate, all or any of the shares of the body corporate;

(b) if the entity is an unincorporated entity, all or any of the ownership interests in the entity;

(c) all or any of the shares or all or any of the ownership interests in any entity that is an affiliate of the entity; or

(d) all or any of the shares of a body corporate that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates.

(2) If a bank acquires shares or ownership interests in an entity under subsection (1), the bank shall, within five years after acquiring them, do all things necessary to ensure that the bank does not control the entity or have a substantial investment in the entity.

(3) Despite subsection (1), if a bank 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 10 and the bank later increases that substantial investment by way of an investment made under subsection (1), the bank 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.

(4) The Superintendent may, in the case of any particular bank that makes an application under this subsection, extend the period referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

(5) Despite anything in this Part, if a bank 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 bank 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 bank 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.

(6) If a bank acquires any shares or ownership interests under subsection (5), the bank 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.

(7) If, under subsection (1), a bank 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 468, the bank 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).

1991, c. 46, s. 472; 1997, c. 15, s. 59; 2001, c. 9, s. 127.

473. (1) Despite anything in this Act, a bank may acquire

(a) an investment in a body corporate,

(b) an interest in an unincorporated entity, or

(c) an interest in real property

if the investment or interest is acquired through the realization of a security interest held by the bank or any of its subsidiaries.

(2) Subject to subsection 73(2), if a bank acquires control of, or acquires a substantial investment in, an entity by way of the realization of a security interest held by the bank or any of its subsidiaries, the bank shall, within five years after the day on which control or the substantial investment is acquired, do all things necessary, or cause its subsidiary to do all things necessary, as the case may be, to ensure that the bank no longer controls the entity or has a substantial investment in the entity.

(3) Despite subsection (2), if a bank 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 10 and the bank later increases that substantial investment by way of a realization of a security interest under subsection (1), the bank 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.

(4) The Superintendent may, in the case of any particular bank that makes an application under this subsection, extend the period referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

(5) If, under subsection (1), a bank 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 468, the bank 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).

1991, c. 46, s. 473; 1997, c. 15, s. 60; 2001, c. 9, s. 127.

474. The Governor in Council may make regulations

(a) for the purposes of subsection 468(4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the banks or other entities in respect of which that subsection does not apply, including prescribing banks or other entities on the basis of the activities they engage in;

(b) for the purposes of subsection 468(5) or (6), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the banks or other entities in respect of which either of those subsections does not apply, including prescribing banks or other entities on the basis of the activities they engage in;

(c) for the purposes of subsection 468(11), permitting a bank to give up control of an entity; and

(d) restricting the ownership by a bank of shares of a body corporate or of ownership interests in an unincorporated entity under sections 468 to 473 and imposing terms and conditions applicable to banks that own such shares or interests.

1991, c. 46, s. 474; 1997, c. 15, s. 61; 2001, c. 9, s. 127.

475. (1) Subject to subsection (3), the value of all loans, investments and interests acquired by a bank and any of its prescribed subsidiaries under section 472 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 bank and its prescribed subsidiaries under sections 476 to 478

(a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and

(b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property.

(2) The Superintendent may, in the case of any particular bank, 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.

(3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 479 to be an interest in real property and

(a) the bank or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 479 to be an interest in real property; or

(b) the bank or the subsidiary acquired the investment or interest under section 472 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 479 to be an interest in real property.

1991, c. 46, s. 475; 1997, c. 15, s. 62; 2001, c. 9, s. 127.

476. A bank 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 bank or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the bank 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 bank.

1991, c. 46, s. 476; 2001, c. 9, s. 127.

477. A bank shall not, and shall not permit its prescribed subsidiaries to,

(a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the bank has, or by virtue of the acquisition would have, a substantial investment, or

(b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a),

if the aggregate value of

(c) all participating shares, excluding participating shares of permitted entities in which the bank has a substantial investment, and

(d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the bank has a substantial investment,

beneficially owned by the bank 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 bank.

1991, c. 46, s. 477; 2001, c. 9, s. 127.

478. A bank shall not, and shall not permit its prescribed subsidiaries to,

(a) purchase or otherwise acquire

(i) participating shares of a body corporate, other than those of a permitted entity in which the bank has, or by virtue of the acquisition would have, a substantial investment,

(ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the bank has, or by virtue of the acquisition would have, a substantial investment, or

(iii) interests in real property, or

(b) make an improvement to real property in which the bank or any of its prescribed subsidiaries has an interest

if the aggregate value of

(c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the bank and its prescribed subsidiaries, and

(d) all interests of the bank in real property referred to in subparagraph (a)(iii)

exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank.

1991, c. 46, s. 478; 1997, c. 15, s. 63; 2001, c. 9, s. 127.

479. For the purposes of this Part, the Governor in Council may make regulations

(a) defining the interests of a bank in real property;

(b) determining the method of valuing those interests; or

(c) exempting classes of banks from the application of sections 475 to 478.

1991, c. 46, s. 479; 1997, c. 15, s. 64; 2001, c. 9, s. 127.

480. (1) The Superintendent may, by order, direct a bank to dispose of, within any period that the Superintendent considers reasonable, any loan, investment or interest made or acquired in contravention of this Part.

(2) If, in the opinion of the Superintendent,

(a) an investment by a bank or any entity it controls in shares of a body corporate or in ownership interests in an unincorporated entity enables the bank to control the body corporate or the unincorporated entity, or

(b) the bank or any entity it controls has entered into an arrangement whereby it or its nominee may veto any proposal put before

(i) the board of directors of a body corporate, or

(ii) a similar group or committee of an unincorporated entity,

or whereby no proposal may be approved except with the consent of the bank, the entity it controls or the nominee,

the Superintendent may, by order, require the bank, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the bank 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).

(3) If

(a) a bank

(i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 470(1), (2) or (4), or

(ii) is in default of an undertaking referred to in subsection 470(1) or (2) and the default is not remedied within ninety days after the day of receipt by the bank of a notice from the Superintendent of the default, or

(b) a permitted entity referred to in subsection 470(4) is in default of an undertaking referred to in that subsection and the default is not remedied within ninety days after the day of receipt by the bank of a notice from the Superintendent of the default,

the Superintendent may, by order, require the bank, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the bank no longer has a substantial investment in the entity to which the undertaking relates.

(4) Subsection (2) does not apply in respect of an entity in which a bank has a substantial investment permitted by this Part.

1991, c. 46, s. 480; 2001, c. 9, s. 127.

481. If a bank controls or has a substantial investment in an entity as permitted by this Part and the bank 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 468(5) or (6), the bank is deemed to have acquired, on the day the bank becomes aware of the change, a temporary investment in respect of which section 471 applies.

1991, c. 46, s. 481; 1997, c. 15, s. 65; 2001, c. 9, s. 127.

482. (1) A bank 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

A + B > C

where

A is the value of the assets;

B is the total value of all assets that the bank and its subsidiaries acquired from or transferred to that person in the twelve months ending immediately before the acquisition or transfer; and

C is ten per cent of the total value of the assets of the bank, as shown in the last annual statement of the bank prepared before the acquisition or transfer.

(2) The prohibition in subsection (1) does not apply in respect of

(a) assets that are debt obligations that are

(i) guaranteed by any financial institution other than the bank,

(ii) fully secured by deposits with any financial institution, including the bank, or

(iii) fully secured by debt obligations that are guaranteed by any financial institution other than the bank;

(b) assets that are debt obligations issued

(i) by, or by any agency of,

(A) the Government of Canada,

(B) the government of a province,

(C) a municipality, or

(D) the government of a foreign country or any political subdivision of a foreign country, or

(ii) by a prescribed international agency;

(c) assets that are debt obligations that are guaranteed by, or fully secured by securities issued by, a government, a municipality or an agency referred to in paragraph (b);

(d) assets that are debt obligations that are widely distributed, as that expression is defined by the regulations;

(e) assets that are debt obligations of an entity controlled by the bank; or

(f) a transaction or series of transactions by the bank with another financial institution as a result of the bank’s participation in one or more syndicated loans with that financial institution.

(3) The approval of the Superintendent is not required if

(a) the bank sells assets under a sale agreement that is approved by the Minister under section 236;

(b) the bank or its subsidiary acquires shares of, or ownership interests in, an entity for which the approval of the Minister under Part VII or subsection 468(5) is required or the approval of the Superintendent under subsection 468(6) is required; or

(c) the transaction has been approved by the Minister under subsection 678(1) of this Act or subsection 715(1) of the Insurance Companies Act.

(4) For the purposes of “A” in subsection (1), the value of the assets is

(a) in the case of assets that are acquired, the purchase price of the assets or, if the assets are shares of, or ownership interests in, an entity the assets of which will be included in the annual statement of the bank after the acquisition, the fair market value of the assets; and

(b) in the case of assets that are transferred, the book value of the assets as stated in the last annual statement of the bank 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 bank before the transfer, the value of the assets as stated in the annual statement.

(5) For the purposes of subsection (1), the total value of all assets that the bank 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 bank, the fair market value of the assets of the entity at the date of the acquisition.

(6) For the purposes of subsection (1), the total value of all assets that the bank 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 bank 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 bank before the transfer, the value of the assets of the entity as stated in the annual statement.

1991, c. 46, s. 482; 1997, c. 15, s. 66; 2001, c. 9, s. 127.

483. Nothing in this Part requires

(a) the termination of a loan made before February 7, 2001;

(b) the termination of a loan made after that date as a result of a commitment made before that date;

(c) the disposal of an investment made before that date; or

(d) the disposal of an investment made after that date as a result of a commitment made before that date.

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 471(2), 472(3) and 473(3), be increased after that date.

1991, c. 46, s. 483; 2001, c. 9, s. 127.

484. A loan or investment referred to in section 483 is deemed not to be prohibited by the provisions of this Part.

1991, c. 46, s. 484; 2001, c. 9, s. 127.