522.2 This Division does not apply in respect of investments acquired and held, branches maintained and businesses engaged in or carried on in accordance with Division 3.

2001, c. 9, s. 132.

522.21 (1) A foreign bank that does not have a financial establishment in Canada must be a designated foreign bank or be associated with a designated foreign bank in order to

(a) acquire or hold control of, or be a major owner of,

(i) an entity referred to in any of paragraphs 468(1)(g) to (i),

(ii) a permitted Canadian entity that is a financial services entity, or

(iii) a Canadian entity that is a financial services entity, by way of a temporary investment permitted by section 522.14; or

(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18.

(2) An entity that is associated with a foreign bank and that does not have a financial establishment in Canada must be associated with a designated foreign bank in order for the entity to

(a) acquire or hold control of, or be a major owner of,

(i) an entity referred to in any of paragraphs 468(1)(g) to (i),

(ii) a permitted Canadian entity that is a financial services entity, or

(iii) a Canadian entity that is a financial services entity, by way of a temporary investment permitted by section 522.14; or

(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18.

(3) A foreign bank that has a financial establishment in Canada must be a designated foreign bank or be associated with a designated foreign bank in order to

(a) acquire or hold control of, or a substantial investment in,

(i) an entity referred to in any of paragraphs 468(1)(g) to (i),

(ii) a permitted Canadian entity,

(iii) a Canadian entity, by way of a temporary investment permitted by section 522.14, or

(iv) a limited commercial entity;

(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18; or

(c) maintain a branch or engage in or carry on a business permitted by section 522.19.

(4) An entity that is associated with a foreign bank and that has a financial establishment in Canada must be an entity associated with a foreign bank that is a designated foreign bank in order for the entity to

(a) acquire or hold control of, or a substantial investment in,

(i) an entity referred to in any of paragraphs 468(1)(g) to (i),

(ii) a permitted Canadian entity,

(iii) a Canadian entity, by way of a temporary investment permitted by section 522.14, or

(iv) a limited commercial entity;

(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18; or

(c) maintain a branch or engage in or carry on a business permitted by section 522.19.

2001, c. 9, s. 132.

522.22 (1) Subject to subsection (2) and the regulations, a foreign bank or an entity associated with a foreign bank may not, without the prior written approval of the Minister, given by order,

(a) acquire control of a Canadian entity referred to in any of paragraphs 468(1)(g) to (i) from a person who is not a member of the foreign bank’s group;

(b) acquire control of a Canadian entity whose business includes one or more of the activities referred to in paragraph 522.08(1)(a) and that engages, as part of its business, in any financial intermediary activity that exposes the Canadian entity to material market or credit risk — including a finance entity — if the control is acquired from an entity referred to in any of paragraphs 468(1)(a) to (f) that is not a member of the foreign bank’s group, but does not include a Canadian entity whose activities are limited to the activities of one or more of the following entities:

(i) a factoring entity as defined in the regulations, or

(ii) a financial leasing entity;

(c) acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes one or more of the activities referred to in paragraph 522.08(1)(d);

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

(e) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in an activity prescribed for the purposes of paragraph 522.08(1)(f);

(f) engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18;

(g) acquire or hold control of, or a substantial investment in, a limited commercial entity;

(h) maintain a branch or engage in or carry on a business permitted by section 522.19; or

(i) engage in an activity referred to in paragraph 510(1)(c) in the circumstances described in paragraph 513(1)(a) or (2)(c).

(2) Subject to the regulations, if a foreign bank or an entity associated with a foreign bank

(a) obtains the approval of the Minister under any of paragraphs (1)(a) to (e) and (g) to acquire or hold control of, or a substantial investment in, a Canadian entity, and

(b) through that acquisition or holding, indirectly acquires control of, or a substantial investment in, another Canadian entity that would require the approval of the Minister under any of those paragraphs,

and that indirect acquisition is disclosed to the Minister in writing before the approval is obtained, the foreign bank or the entity associated with a foreign bank is deemed to have obtained the approval of the Minister for that indirect acquisition.

(3) If the Minister, under paragraph (1)(g), approves the acquisition or holding of control of, or a substantial investment in, a limited commercial entity by a foreign bank or by an entity associated with a foreign bank, the Minister may also authorize the foreign bank or entity associated with a foreign bank to, at any time, acquire and hold control of, or a substantial investment in, another limited commercial entity that engages in activities that are substantially the same as those engaged in by the Canadian entity in respect of which the approval was given.

(4) Nothing in this Part precludes a foreign bank or an entity associated with a foreign bank from acquiring a substantial investment in a Canadian entity if the substantial investment is acquired in the course of a distribution to the public of shares or ownership interests in the Canadian entity by a securities underwriter so long as the securities underwriter holds the substantial investment for no longer than six months.

2001, c. 9, s. 132.

522.23 The Governor in Council may make regulations for the purposes of this Part and, in particular, may make regulations

(a) concerning specialized financing for the purposes of paragraph 522.08(1)(b);

(b) for the purposes of subsection 522.22(1) or (2), permitting the acquisition or holding of control or the acquisition or holding of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the foreign banks, entities associated with foreign banks or other entities in respect of which either of those subsections does not apply, including prescribing foreign banks, entities associated with foreign banks or other entities on the basis of the activities they engage in;

(c) restricting the ownership by foreign banks, or entities associated with foreign banks, of shares in a body corporate or of ownership interests in an unincorporated entity under Division 3 or 4 and imposing terms and conditions applicable to foreign banks, or entities associated with foreign banks, that own such shares or interests;

(d) in respect of sections 409 to 411, for the purposes of paragraph 522.08(1)(a), subsection 522.22(1) and section 522.24;

(e) respecting the calculation referred to in paragraphs 508(1)(d) and (2)(b), including regulations respecting the classes of entities associated with the foreign bank, and the classes of foreign banks described in any of paragraphs 508(1)(a) to (c) that are associated with the foreign bank, that are to be taken into account in that calculation;

(f) defining any terms in paragraphs 508(1)(d) and (2)(b); and

(g) defining “factoring entity” for the purpose of paragraph 522.22(1)(b).

2001, c. 9, s. 132.

522.24 Any regulations made for the purposes of sections 409 to 411 apply for the purposes of paragraph 522.08(1)(a) and subsection 522.22(1) unless otherwise provided in the regulations.

2001, c. 9, s. 132.

522.25 (1) If a foreign bank or an entity associated with a foreign bank contravenes any provision of Division 4 or fails to comply with any terms and conditions imposed by any order made for the purpose of any of those provisions, the Minister may, if the Minister considers it in the public interest to do so, by order, direct the foreign bank or the entity to divest itself of the control of, or a substantial investment in, a bank or bank holding company to which the offence relates.

(2) If an authorized foreign bank or an entity associated with an authorized foreign bank contravenes any provision of Division 4 or fails to comply with any terms and conditions imposed by any order made for the purpose of any of those provisions, the Minister may, if the Minister considers it in the public interest to do so, revoke the order made under subsection 524(1).

(3) The Minister may, by order, direct a foreign bank or an entity associated with a foreign bank, within any period that the Minister considers reasonable, to dispose of assets used in a business or activity engaged in or carried on, or to dispose of the control of an entity or a substantial investment in an entity acquired or held, in contravention of this Part or in contravention of any terms and conditions imposed

(a) under subsection 522.26(2); or

(b) under subsection 518(4) or 521(1.02), as it read immediately before the coming into force of this section.

2001, c. 9, s. 132.

522.26 (1) In this section and section 522.27, “decision” means a decision, an order, an approval, an extension or a permission of or by the Minister under this Part.

(2) A decision may include any terms and conditions that the Minister considers appropriate.

(3) The Minister may vary or revoke a previous decision.

(4) A decision varying or revoking a previous decision takes effect three months after the day it is made, or at any other time that is agreed to by the Minister and the foreign bank, or the entity associated with a foreign bank, to which the decision relates.

(5) The Minister shall publish in the Canada Gazette a notice of the making or revocation of a designation order or an exemption order.

2001, c. 9, s. 132.

522.27 Not later than six months after the end of its financial year or any other period that the Superintendent may specify, a foreign bank or an entity associated with a foreign bank in respect of which a decision has been made by the Minister shall, except to the extent that the Superintendent has exempted it in relation to any of the following, provide the Superintendent with

(a) a copy of its financial statements and those of each non-bank affiliate of the foreign bank for the financial year;

(b) a list, in a form satisfactory to the Superintendent, of businesses and activities engaged in or carried on by it under sections 514, 522.18 and 522.19;

(c) a list, in a form satisfactory to the Superintendent, of each non-bank affiliate of the foreign bank, with a description of the nature of the business engaged in or carried on by it; and

(d) any other information that may be prescribed for the purposes of this section.

2001, c. 9, s. 132.

522.28 The Investment Canada Act does not apply in respect of any of the following, whether it occurs directly or indirectly:

(a) the acquisition of control, within the meaning of that Act, of an entity referred to in any of paragraphs 468(1)(a) to (f) by a foreign bank or by an entity associated with a foreign bank;

(b) the establishment of a new Canadian business, within the meaning of that Act, that is the insurance business in Canada of a foreign insurance company that is a foreign bank that is the subject of an exemption order or that is an entity associated with a foreign bank that is the subject of an exemption order;

(c) the acquisition of control, within the meaning of that Act, of a Canadian entity by an entity referred to in any of paragraphs 468(1)(a) to (f) that is controlled by a foreign bank or by an entity associated with a foreign bank;

(d) the establishment of a new Canadian business, within the meaning of that Act, that is authorized by Division 4 by a foreign bank, or by an entity associated with a foreign bank; and

(e) the acquisition of control, within the meaning of that Act, of a Canadian entity in accordance with Division 4 by a foreign bank, or by an entity associated with a foreign bank.

2001, c. 9, s. 132.

522.29 (1) The following definitions apply in this Division.

“affected entity” means

(a) an entity associated with a foreign bank that is an affected foreign bank and that has a financial establishment in Canada; or

(b) a prescribed entity associated with a foreign bank referred to in paragraph (c) of the definition “affected foreign bank”.

“affected foreign bank” means a foreign bank that

(a) immediately before the day this Division comes into force, was the subject of an order made under subsection 524(1) or former subsection 521(1.06) and whose order has not been revoked;

(b) on or before June 13, 2000, controlled a foreign bank subsidiary as defined in former section 2; or

(c) for the purposes of subsections 522.32(6) and (7) is a prescribed foreign bank that meets any of the conditions for designation set out in any of paragraphs 508(1)(a) to (d).

(2) Every reference in this Division to a former provision means a reference to that provision as it read immediately before the day this Division comes into force.

2001, c. 9, s. 132.

522.3 (1) Every order made under former subsection 507(4) exempting an entity from the status of being associated with a foreign bank or exempting a Canadian entity from being a “non-bank affiliate of a foreign bank” that is in force on the day this Division comes in force continues in force, subject to any further order that the Minister may make varying or revoking it.

(2) A revocation order or variation order takes effect three months after the date it is made unless the Minister and the entity to which it relates agree that the order is to take effect at another time.

(3) The Minister shall publish in the Canada Gazette a notice of every revocation order.

2001, c. 9, s. 132.

522.31 Every order made under former paragraph 518(3)(b) or former subsection 521(1) that is in force on the day this Division comes into force continues in force, subject to any further order that the Minister may make varying or revoking it.

2001, c. 9, s. 132.

522.32 (1) An affected foreign bank or affected entity that had received consent under former subsection 521(1) to acquire or hold control of, or a substantial investment in, a Canadian entity that is a financial services entity but is not a permitted Canadian entity or an entity referred to in any of paragraphs 468(1)(a) to (i) may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force if the consent had not been revoked before that day.

(2) Subsection (1) applies so long as

(a) the Canadian entity restricts its businesses in accordance with any terms and conditions in the consent under former subsection 521(1), or in an undertaking to the Minister or Superintendent, other than a term or condition that limits the size of the Canadian entity’s assets; and

(b) neither the affected foreign bank nor any affected entity in relation to the foreign bank

(i) is an authorized foreign bank, or

(ii) controls or is a major shareholder of a bank or a bank holding company.

(3) An affected foreign bank or an affected entity that, immediately before the day this Division comes into force, holds control of, or a substantial investment in, a Canadian entity that is a permitted Canadian entity or an entity referred to in any of paragraphs 468(1)(g) to (i) by virtue of former paragraph 518(3)(b) or a consent received under former subsection 521(1) may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force if the approval or consent had not been revoked before that day and, if it does so, it is deemed to have received any approval required under paragraphs 522.22(1)(a) to (e) in respect of the Canadian entity.

(4) An affected foreign bank or affected entity that, immediately before the day this Division comes into force, holds, by virtue of former paragraph 518(3)(b), control of, or a substantial investment in, a Canadian entity that is not a permitted Canadian entity or a financial services entity may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force if any approval of the Minister under that former paragraph has not been revoked before that day, so long as the Canadian entity does not engage in leasing activities.

(5) Subsections (3) and (4) apply so long as

(a) after the coming into force of this Division, the Canadian entity restricts its businesses in accordance with any terms and conditions in the Minister’s approval under former paragraph 518(3)(b), or in a consent received under former subsection 521(1), as the case may be, or in an undertaking to the Minister or Superintendent given before the day this Division comes into force, other than a term or condition that limits the size of the Canadian entity’s assets;

(b) within one year after the coming into force of this Division, the affected foreign bank or affected entity discloses to the Minister the nature of its businesses and activities on June 13, 2000; and

(c) after the coming into force of this Division, the Canadian entity does not change the nature of its businesses as of

(i) June 13, 2000, or

(ii) any other date after June 13, 2000 and before the coming into force of this Division on which the businesses of the Canadian entity were approved by the Minister.

(6) An affected foreign bank or an affected entity that, immediately before the day this Division comes into force, holds, otherwise than by virtue of former paragraph 518(3)(b) or a consent received under former subsection 521(1), control of, or a substantial investment in, a Canadian entity that is not a permitted Canadian entity or a financial services entity may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force.

(7) Subsection (6) applies so long as

(a) within one year after the coming into force of this Division, the affected foreign bank or affected entity discloses to the Minister the nature of its businesses on June 13, 2000;

(b) after the coming into force of this Division, the Canadian entity does not change the nature of its businesses as of June 13, 2000 and its businesses remain in conformity with former paragraph 518(3)(a);

(c) the Canadian entity does not engage in leasing activities; and

(d) neither the affected foreign bank nor any affected entity

(i) is an authorized foreign bank, or

(ii) controls or is a major shareholder of a bank or a bank holding company.

2001, c. 9, s. 132.

522.33 (1) Despite section 517 and subject to subsection (2), paragraph 510(1)(d) does not apply in respect of the holding of control of, or a substantial investment in, a Canadian entity whose principal activity in Canada is an activity referred to in any of former subparagraphs 518(3)(a)(i) to (v) and that was acquired by a foreign bank or an entity associated with a foreign bank before August 1, 1997 and before

(a) the foreign bank became a foreign bank or the foreign bank with which the entity is associated became a foreign bank, as the case may be; or

(b) the Canadian entity’s principal activity in Canada became an activity described in those subparagraphs.

(2) Subsection (1) applies only if the foreign bank or an entity associated with the foreign bank

(a) is not an authorized foreign bank; and

(b) does not control, and is not a major shareholder of, a bank or a bank holding company.

2001, c. 9, s. 132.