925. (1) The definitions in subsection 464(1) apply in respect of bank holding companies, except that the reference to “section 468” in the definition “permitted entity” is to be read as a reference to “section 930” and the reference to “bank” in that definition is to be read as a reference to “bank holding company”.

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

(a) an entity referred to in any of paragraphs 930(1)(a) to (f) that controls the bank holding company;

(b) a subsidiary of the bank holding company or of an entity referred to in any of paragraphs 930(1)(a) to (f) that controls the bank holding company;

(c) an entity in which the bank holding company, or an entity referred to in any of paragraphs 930(1)(a) to (f) that controls the bank holding company, has a substantial investment; or

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

(3) This Division does not apply in respect of

(a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 941(a) to be an interest in real property; or

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

2001, c. 9, s. 183.

926. Subject to this Division, a bank holding company may invest its funds in the shares of or ownership interests in any entity or make any other investment that its directors consider necessary or advisable to manage the bank holding company’s liquidity.

2001, c. 9, s. 183.

927. The directors of a bank holding company shall establish and the bank holding company shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply to avoid undue risk of loss and obtain a reasonable return.

2001, c. 9, s. 183.

928. (1) Subject to subsections (2) and (3), no bank holding company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.

(2) A bank holding company may 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 930(1)(a) to (j), a specialized financing entity or 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 930(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the bank holding company, or

(ii) an entity controlled by an entity referred to in any of paragraphs 930(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the bank holding company.

(3) A bank holding company may acquire control of, or acquire or increase a substantial investment in, an entity by way of

(a) a temporary investment permitted by section 933;

(b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 934; or

(c) a realization of security permitted by section 935.

(4) A bank holding company is deemed not to contravene subsection (1) if the bank holding company 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 holding company.

2001, c. 9, s. 183.

929. 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 Division;

(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 holding company 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) prescribing terms and conditions under which a bank holding company may acquire control of, or acquire or increase a substantial investment in, a specialized financing entity.

2001, c. 9, s. 183.

930. (1) Subject to subsections (4) to (6), a bank holding company 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), a bank holding company 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 holding company is permitted under this Division 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 holding company or any member of the bank holding company’s group:

(i) the bank holding company,

(ii) any member of the bank holding company’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 any member of the bank holding company’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 holding company 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 holding company, a bank would be permitted under Part IX to acquire a substantial investment in the other entity, or

(ii) in the case of an entity that is not controlled by the bank holding company, a bank would be permitted to acquire a substantial investment in the other entity under subsection 466(2), paragraph 466(3)(b) or (c) or subsection 466(4) or 468(1) or (2); or

(e) any prescribed activity.

(4) Subject to subsection (8) and the regulations, a bank holding company 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 holding company 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 holding company is permitted by regulations made under paragraph 936(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 holding company 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 holding company is permitted by regulations made under paragraph 936(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 holding company 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 holding company is permitted by regulations made under paragraph 936(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 holding company 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 holding company is permitted by regulations made under paragraph 936(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 holding company may not, without the prior written approval of the Minister,

(a) acquire control of an entity referred to in paragraphs (1)(g) to (i) from a person who is not a member of the bank holding company’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 holding company’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 holding company 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 holding company obtains the approval of the Superintendent.

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

(a) the bank holding company 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 holding company 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 931(1).

(8) A bank holding company 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 holding company to control the entity.

(9) A bank holding company 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 holding company 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 holding company 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 holding company is permitted to do so by regulations made under paragraph 936(c); or

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

(12) If a bank holding company 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 holding company of its substantial investment in the entity so long as the bank holding company continues to control the entity.

2001, c. 9, s. 183.

931. (1) If a bank holding company obtains the approval of the Minister under subsection 930(5) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase, the bank holding company indirectly acquires control of, or acquires or increases a substantial investment in, another entity that would require the approval of the Minister under subsection 930(5) or the Superintendent under subsection 930(6) and that indirect acquisition or increase is disclosed to the Minister in writing before the approval is obtained, the bank holding company is deemed to have obtained the approval of the Minister or the Superintendent for that indirect acquisition or increase.

(2) If a bank holding company obtains the approval of the Superintendent under subsection 930(6) to acquire control of, or to acquire or increase a substantial investment in, an entity and, through that acquisition or increase the bank holding company 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 holding company is deemed to have obtained the approval of the Superintendent for that indirect acquisition or increase.

2001, c. 9, s. 183.

932. (1) If a bank holding company controls a permitted entity, other than an entity referred to in any of paragraphs 930(1)(a) to (f), the bank holding company 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 holding company acquires control of an entity referred to in any of paragraphs 930(1)(g) to (j), the bank holding company 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 any entity referred to in any of paragraphs 930(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 Division, a bank holding company shall not control a permitted entity, other than an entity referred to in any of paragraphs 930(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 holding company obtains from the permitted entity an undertaking to provide the Superintendent with reasonable access to the records of the permitted entity.

2001, c. 9, s. 183.

933. (1) Subject to subsection (3), a bank holding company 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) The Superintendent may, in the case of any particular bank holding company 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) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

(3) If a bank holding company, 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 930(5) is required, the bank holding company 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.

(4) If a bank holding company, 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 930(6) is required, the Superintendent may, in the case of any particular bank holding company that makes an application under this subsection, permit the bank holding company 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.

2001, c. 9, s. 183.

934. (1) Despite anything in this Division, if any subsidiary of a bank holding company has made a loan to an entity and, under the terms of the agreement between the subsidiary and the entity with respect to the loan and any other documents governing the terms of the loan, a default has occurred, the bank holding company may acquire, through the subsidiary,

(a) a substantial investment in the entity to which the loan was made;

(b) a substantial investment in any entity that is an affiliate of the entity; or

(c) a substantial investment in an entity that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity to which the loan was made or any of the affiliates of that entity.

(2) If a bank holding company acquires a substantial investment in an entity under subsection (1), the bank holding company shall, within five years after acquiring the substantial investment, cause the subsidiary that made the loan to do all things necessary to ensure that the bank holding company does not control the entity or have a substantial investment in the entity.

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

(4) Despite anything in this Division, if a subsidiary of a bank holding company 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 subsidiary 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 holding company may acquire, through the subsidiary, a substantial investment 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.

(5) If a bank holding company acquires a substantial investment in any entity under subsection (4), the bank holding company may, on any terms and conditions that the Superintendent considers appropriate, continue to hold the substantial investment for an indeterminate period or for any other period that the Superintendent may specify.

(6) If, under subsection (1), a bank holding company 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 930, the bank holding company 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), including any extension of it granted under subsection (3).

2001, c. 9, s. 183.

935. (1) Despite anything in this Part, a bank holding company may acquire control of, or a substantial investment in, an entity if the control or the substantial investment is acquired through the realization of a security interest held by a subsidiary of the bank holding company.

(2) Subject to subsection 717(2), if a bank holding company acquires control of, or a substantial investment in, an entity by way of the realization of a security interest held by any of its subsidiaries, the bank holding company shall, within five years after the day on which control or the substantial investment is acquired, cause the subsidiary to do all things necessary to ensure that the bank holding company no longer controls the entity or has a substantial investment in the entity.

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

(4) If, under subsection (1), a bank holding company 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 930, the bank holding company 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), including any extension of it granted under subsection (3).

2001, c. 9, s. 183.

936. The Governor in Council may make regulations

(a) for the purposes of subsection 930(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 bank holding companies or other entities in respect of which that subsection does not apply, including prescribing bank holding companies or other entities on the basis of the activities they engage in;

(b) for the purposes of subsection 930(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 bank holding companies or other entities in respect of which either of those subsections does not apply, including prescribing bank holding companies or other entities on the basis of the activities they engage in;

(c) for the purposes of subsection 930(11), permitting a bank holding company to give up control of an entity; and

(d) restricting the ownership by a bank holding company of shares of a body corporate or of ownership interests in an unincorporated entity under sections 930 to 935 and imposing terms and conditions applicable to bank holding companies that own such shares or interests.

2001, c. 9, s. 183.

937. (1) Subject to subsection (3), the value of all loans, investments and interests acquired by a bank holding company and any of its prescribed subsidiaries under section 934 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 holding company and its prescribed subsidiaries under sections 938 to 940

(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 holding company, 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 941 to be an interest in real property and

(a) the bank holding company 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 941 to be an interest in real property; or

(b) the bank holding company or the subsidiary acquired the investment or interest under section 934 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 941 to be an interest in real property.

2001, c. 9, s. 183.

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

2001, c. 9, s. 183.

939. A bank holding company 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 holding company 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 holding company has a substantial investment, and

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

beneficially owned by the bank holding company 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 holding company.

2001, c. 9, s. 183.

940. A bank holding company 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 holding company 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 holding company 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 holding company 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 holding company and its prescribed subsidiaries, and

(d) all interests of the bank holding company 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 holding company.

2001, c. 9, s. 183.

941. For the purposes of this Division, the Governor in Council may make regulations

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

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

(c) exempting classes of bank holding companies from the application of sections 937 to 940.

2001, c. 9, s. 183.

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

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

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

(b) the bank holding company 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 holding company, the entity it controls or the nominee,

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

(i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 932(1), (2) or (4), or

(ii) is in default of an undertaking referred to in subsection 932(1) or (2) and the default is not remedied within ninety days after the day of receipt by the bank holding company of a notice from the Superintendent of the default, or

(b) a permitted entity referred to in subsection 932(4) is in default of an undertaking referred to in subsection 932(4) and the default is not remedied within ninety days after the day of receipt by the bank holding company of a notice from the Superintendent of the default,

the Superintendent may, by order, require the bank holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the bank holding company 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 holding company has a substantial investment permitted by this Division.

2001, c. 9, s. 183.

943. If a bank holding company controls or has a substantial investment in an entity as permitted by this Division and the bank holding company 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 930(5) or (6), the bank holding company is deemed to have acquired, on the day the bank holding company becomes aware of the change, a temporary investment in respect of which section 933 applies.

2001, c. 9, s. 183.

944. (1) A bank holding company 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 holding company 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 holding company, as shown in the last annual statement of the bank holding company 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,

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

(iii) fully secured by debt obligations that are guaranteed by any financial institution;

(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 holding company; or

(f) a transaction or series of transactions by a subsidiary of the bank holding company with a financial institution as a result of the subsidiary’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 holding company or its subsidiary acquires shares of, or ownership interests in, an entity for which the approval of the Minister under Division 7 or subsection 930(5) is required or the approval of the Superintendent under subsection 930(6) is required; or

(b) 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 holding company 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 holding company 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 holding company 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 holding company 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 holding company, 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 holding company 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 holding company 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 holding company before the transfer, the value of the assets of the entity as stated in the annual statement.

2001, c. 9, s. 183.

945. Nothing in this Division 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 Division, the amount of the loan or investment may not be increased after that date.

2001, c. 9, s. 183.

946. A loan or investment referred to in section 945 is deemed not to be prohibited by the provisions of this Division.

2001, c. 9, s. 183.

947. (1) Subject to subsection (2), for the purpose of section 948 “non-bank entity” means a Canadian entity, other than a bank, that is controlled by a bank holding company or in which a bank holding company has a substantial investment.

(2) A Canadian entity is not a non-bank entity by reason only that a subsidiary of a bank holding company that is a bank controls, or has a substantial investment in, the Canadian entity.

2001, c. 9, s. 183.

948. (1) A non-bank entity shall not, in Canada,

(a) engage in the business of accepting deposit liabilities; or

(b) represent to the public that any instrument issued by the non-bank entity is a deposit or that any liability incurred by the non-bank entity is a deposit.

(2) A non-bank entity that carries on as part of its business the provision of financial services shall not borrow money in Canada from the public without disclosing that

(a) the non-bank entity is not a member institution of the Canada Deposit Insurance Corporation;

(b) the liability incurred by the non-bank entity through the borrowing is not a deposit; and

(c) the non-bank entity is not regulated as a financial institution in Canada.

(3) The disclosure shall be

(a) in a prospectus, information circular or other offering document related to the borrowing or in a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

(b) in any other manner that may be prescribed.

(4) Subsection (2) does not apply

(a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or

(b) except as may be provided in any regulations, to a borrowing

(i) from a person in an amount of $150,000 or more, or

(ii) through the issue of instruments in denominations of $150,000 or more.

(5) Subsections (1) and (2) do not apply if the non-bank entity is

(a) a trust or loan corporation incorporated under an Act of Parliament or of the legislature of a province;

(b) an entity referred to in paragraph 930(1)(d) or (h); or

(c) a prescribed entity.

(6) Subsection (2) does not apply if the non-bank entity is

(a) an insurance company incorporated under an Act of Parliament or of the legislature of a province;

(b) a bank holding company or an insurance holding company;

(c) an entity that is controlled by an insurance holding company or in which an insurance holding company has a substantial investment;

(d) a financial institution that is described in paragraph (g) of the definition “financial institution” in section 2; or

(e) a prescribed entity.

2001, c. 9, s. 183.

949. (1) A bank holding company shall, in relation to its business, maintain

(a) adequate capital, and

(b) adequate and appropriate forms of liquidity,

and shall comply with any regulations in relation thereto.

(2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by bank holding companies of adequate capital and adequate and appropriate forms of liquidity.

(3) Notwithstanding that a bank holding company is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the bank holding company

(a) to increase its capital; or

(b) to provide additional liquidity in such forms and amounts as the Superintendent may require.

(4) A bank holding company shall comply with an order made under subsection (3) within such time as the Superintendent specifies therein.

2001, c. 9, s. 183.