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Notice

Vol. 136, No. 51 — December 21, 2002

Information Technology Activities (Cooperative Credit Associations) Regulations

Statutory Authority

Cooperative Credit Associations Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Information Technology Activities (Authorized Foreign Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to sections 396 (see footnote a) and 463 (see footnote b) of the Cooperative Credit Associations Act (see footnote c) , proposes to make the annexed Information Technology Activities (Cooperative Credit Associations) Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15^th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.

Ottawa, December 12, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

	INFORMATION TECHNOLOGY ACTIVITIES (COOPERATIVE CREDIT ASSOCIATIONS) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act"	"Act" means the Cooperative Credit Associations Act.
"book value"	"book value", in respect of the shares and ownership interests held by an entity, means the book value reported on the entity's balance sheet on an unconsolidated basis.
"member of an association's group"	"member of an association's group" has the same meaning as in subsection 386(2) of the Act.
	PRESCRIBED PURPOSE OR CIRCUMSTANCE
Prescribed purpose or circumstance	2. For the purposes of subparagraph 376(1)(h)(iii) of the Act and subject to the approval required under paragraph 376(1)(h) of the Act, an association may develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used for a purpose or in a circumstance that is materially related to the provision of financial products or services by the association or a member of the association's group.
	INVESTMENTS
Prescribed activity	3. (1) For the purposes of paragraph 390(2)(f) of the Act and subject to subsections (2) and (3), a prescribed activity in relation to an entity is developing, designing, holding, managing, manufacturing, selling or otherwise dealing with any data transmission system, information site, communication device or information platform or portal that is used to provide information services.
Limit on size of investment	(2) An association may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the sum of the following exceeds 5% of the association's regulatory capital: (a) the aggregate book value of the shares and ownership interests that the association and its subsidiaries, whether individually or jointly, would acquire in the entity under paragraph 390(2)(f) of the Act, (b) the aggregate book value of the shares and ownership interests held by the association and its subsidiaries, whether individually or jointly, in entities engaging in an activity described in subsection (1) that the association holds control of, or a substantial investment in, under paragraph 390(2)(f) of the Act, and (c) the aggregate value of outstanding loans made by the association and its subsidiaries, whether individually or jointly, to entities engaging in an activity described in subsection (1) that the association holds control of, or a substantial investment in, under paragraph 390(2)(f) of the Act.
Restricted activities	(3) An association may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include (a) activities that an association is not permitted to engage in under any of sections 378, 382 and 382.1 of the Act; (b) dealing in securities, except as may be permitted under paragraph 390(2)(e) of the Act or as may be permitted either to an association under paragraph 376(1)(f) of the Act or to a retail association under subparagraph 376(1)(i)(ii) of the Act; (c) dealing in goods, wares or merchandise that an association is not permitted to deal in under subsection 376(3) of the Act, other than as permitted under subsection (1); (d) activities that an association is not permitted to engage in under section 381 of the Act if the entity engages in the activities of a finance entity or of any other entity prescribed under paragraph 390(3)(c) of the Act; (e) 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 association, the association itself would be permitted under Part X of the Act to acquire a substantial investment in the other entity, or (ii) in the case of an entity that is not controlled by the association, the association itself would be permitted to acquire a substantial investment in the other entity under subsection 388(2), paragraph 388(3)(b) or (c) or subsection 388(4) or 390(1) or (2) of the Act; or (f) any activity prescribed under paragraph 390(3)(e) of the Act.
	EXEMPTION FROM RESTRICTIONS ON INVESTMENTS
Exemption from restrictions	4. For the purposes of subparagraph 3(3)(e)(ii), subsections 390(4) to (6) of the Act do not apply in determining whether an association would be permitted to acquire a substantial investment in an entity under subsection 388(2), paragraph 388(3)(b) or (c) or subsection 388(4) or 390(1) or (2) of the Act.
	NON-APPLICATION OF SUBSECTION 390(5) OF THE ACT
Non-application	5. Subsection 390(5) of the Act does not apply where, under paragraph 390(2)(f) of the Act, an association acquires control of, or acquires or increases of a substantial investment in, an entity whose business is limited to activities described in subsection 3(1). Nothing in this section limits the operation of subsections 3(2) and (3).
	COMING INTO FORCE
Coming into force	6. These Regulations come into force on the day on which they are registered.
	[51-1-o]

Information Technology Activities (Foreign Banks) Regulations

Statutory Authority

Bank Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Information Technology Activities (Authorized Foreign Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to sections 522.23 (see footnote d) and 978 (see footnote e) of the Bank Act (see footnote f) , proposes to make the annexed Information Technology Activities (Foreign Banks) Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addresses to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15^th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.

Ottawa, December 12, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

	INFORMATION TECHNOLOGY ACTIVITIES (FOREIGN BANKS) REGULATIONS
	INTERPRETATION
Definitions	1. (1) The following definitions apply in these Regulations.
"Act"	"Act" means the Bank Act
"book value"	"book value", in respect of the shares and ownership interests held by an entity, means the book value reported on the entity's balance sheet on an unconsolidated basis.
"minority interest"	"minority interest" means an equity interest, in an entity that is controlled by a foreign bank, that is held by a person other than (a) the foreign bank; or (b) an entity controlled by the foreign bank.
Regulatory capital	(2) In these Regulations, subject to subsection (3), the regulatory capital of a foreign bank, at any time, is the amount determined by the formula
	A - B
	where
	A is the total of the amounts of the shareholders' equity, minority interests and subordinated indebtedness that are reported in the financial statements of the foreign bank; and
	B is the amount of goodwill that is included in the financial statements of the foreign bank.
Restriction relating to security	(3) In calculating the amount of regulatory capital under subsection (2), an amount may be included in respect of a security only if (a) the security is, by its terms, subordinate in right of payment to all liabilities of the entity that issued the security other than liabilities that, by their terms, rank equally with, or are subordinate to, that security; (b) the security is issued and fully paid up; and (c) in respect of subordinated indebtedness or a preferred share, the security (i) has an initial minimum term of five years or more or has no term, and (ii) cannot be redeemed or purchased for cancellation in the first five years after it is issued.
	INVESTMENTS
Prescribed activity	2. (1) For the purposes of paragraph 522.08(1)(f) of the Act and subject to subsections (2) to (4), a prescribed activity in relation to a Canadian entity is developing, designing, holding, managing, manufacturing, selling or otherwise dealing with any data transmission system, information site, communication device or information platform or portal that is used to provide information services.
Limit on size of investment — foreign bank	(2) A foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity described in subsection (1) if the sum of the following exceeds the lesser of 5% of the foreign bank's regulatory capital and $1 billion: (a) the aggregate book value of the shares and ownership interests that the foreign bank would acquire in the Canadian entity under paragraph 522.08(1)(f) of the Act; (b) the aggregate book value of the shares and ownership interests held, whether individually or jointly, by the foreign bank and the entities associated with the foreign bank in Canadian entities engaging in an activity described in subsection (1) that the foreign bank or any entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act; and (c) the aggregate value of outstanding loans made by the foreign bank and the entities associated with the foreign bank, whether individually or jointly, to Canadian entities engaging in an activity described in subsection (1) that the foreign bank or any entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act.
Limit on size of investment — entity associated with a foreign bank	(3) An entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity described in subsection (1) if the sum of the following exceeds the lesser of 5% of the foreign bank's regulatory capital and $1 billion: (a) the aggregate book value of the shares and ownership interests that the entity associated with the foreign bank would acquire in the Canadian entity under paragraph 522.08(1)(f) of the Act; (b) the aggregate book value of the shares and ownership interests held, whether individually or jointly, by the entity associated with the foreign bank, the foreign bank and any other entity associated with the foreign bank in Canadian entities engaging in an activity described in subsection (1) that the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act; and (c) the aggregate value of outstanding loans made by the entity associated with the foreign bank, the foreign bank and any other entity associated with the foreign bank, whether individually or jointly, to Canadian entities engaging in an activity described in subsection (1) that the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act.
Restricted activities	(4) A foreign bank or an entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity described in subsection (1) if the activities of the Canadian entity include (a) activities that a bank is not permitted to engage in under any of sections 412, 417 and 418 of the Act; (b) dealing in securities, except as may be permitted under paragraph 522.08(1)(e) of the Act or as may be permitted to a bank under paragraph 409(2)(c) of the Act; (c) dealing in goods, wares or merchandise that a bank is not permitted to deal in under subsection 410(2) of the Act, other than as permitted under subsection (1); (d) activities that a bank is not permitted to engage in under section 416 of the Act if the Canadian entity engages in the activities of a finance entity or of any other entity prescribed under paragraph 522.08(2)(c) of the Act; (e) acquiring or holding control of, or a substantial investment in, another Canadian entity unless (i) in the case of a Canadian entity that is controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under section 522.07, 522.08 or 522.1 or Division 8 of Part XII of the Act, or (ii) in the case of a Canadian entity that is not controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under section 522.07 or 522.08, paragraph 522.1(a), (c) or (d) or Division 8 of Part XII of the Act; or (f) any activity prescribed under paragraph 522.08(2)(e) of the Act.
	EXEMPTION FROM RESTRICTIONS ON INVESTMENTS
Exemption from restrictions	3. For the purposes of subparagraph 2(4)(e)(ii), subsection 522.22(1) of the Act does not apply in determining whether a foreign bank or an entity associated with a foreign bank would be permitted to acquire or hold control of, or a substantial investment, in a Canadian entity under section 522.07 or 522.08, paragraph 522.1(a), (c) or (d) or Division 8 of Part XII of the Act.
	NON-APPLICATION OF SUBSECTION 522.22(1) OF THE ACT
Non-application	4. Subsection 522.22(1) of the Act does not apply where, under paragraph 522.08(1)(f) of the Act, a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity whose business is limited to activities described in subsection 2(1).Nothing in this section limits the operation of subsections 2(2) and (4).
Non-application	5. Subsection 522.22(1) of the Act does not apply where, under paragraph 522.08(1)(f) of the Act, an entity associated with a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity whose business is limited to activities described in subsection 2(1). Nothing in this section limits the operation of subsections 2(3) and (4).
	COMING INTO FORCE
Coming into force	6. These Regulations come into force on the day on which they are registered.
	[51-1-o]

Information Technology Activities (Insurance Holding Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Information Technology Activities (Authorized Foreign Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council pursuant to sections 977 and 1021 (see footnote g) of the Insurance Companies Act (see footnote h) , proposes to make the annexed Information Technology Activities (Insurance Holding Companies) Regulations.

Ottawa, December 12, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

	INFORMATION TECHNOLOGY ACTIVITIES (INSURANCE HOLDING COMPANIES) REGULATIONS
	INTERPRETATION
Definitions	1. The following definitions apply in these Regulations.
"Act"	"Act" means the Insurance Companies Act.
"book value"	"book value", in respect of the shares and ownership interests held by an entity, means the book value reported on the entity's balance sheet on an unconsolidated basis.
	INVESTMENTS
Prescribed activity	2. (1) For the purposes of paragraph 971(2)(f) of the Act and subject to subsections (2) and (3), a prescribed activity in relation to an entity is developing, designing, holding, managing, manufacturing, selling or otherwise dealing with any data transmission system, information site, communication device or information platform or portal that is used to provide information services.
Limit on size of investment	(2) An insurance holding company may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the sum of the following exceeds 5% of the insurance holding company's regulatory capital: (a) the aggregate book value of the shares and ownership interests that the insurance holding company and its subsidiaries, whether individually or jointly, would acquire in the entity under paragraph 971(2)(f) of the Act, (b) the aggregate book value of the shares and ownership interests held by the insurance holding company and its subsidiaries, whether individually or jointly, in entities engaging in an activity described in subsection (1) that the insurance holding company holds control of, or a substantial investment in, under paragraph 971(2)(f) of the Act, and (c) the aggregate value of outstanding loans made by the insurance holding company and its subsidiaries, whether individually or jointly, to entities engaging in an activity described in subsection (1) that the insurance holding company holds control of, or a substantial investment in, under paragraph 971(2)(f) of the Act.
Restricted activities	(3) An insurance holding company may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include (a) activities that a company is not permitted to engage in under any of sections 466, 469 and 475 of the Act; (b) dealing in securities, except as may be permitted under paragraph 971(2)(e) of the Act or as may be permitted to a company under paragraph 440(2)(b) of the Act; (c) dealing in goods, wares or merchandise that a company is not permitted to deal in under subsection 441(3) of the Act, other than as permitted under subsection (1); (d) activities that a company is not permitted to engage in under any regulation made under section 489 of the Act if the entity engages in the activities of a finance entity or of any other entity prescribed under paragraph 971(3)(c) of the Act; (e) 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 insurance holding company, a company would be permitted under Part IX of the Act to acquire a substantial investment in the other entity, or (ii) in the case of an entity that is not controlled by the insurance holding company, a company would be permitted to acquire a substantial investment in the other entity under subsection 493(2), paragraph 493(3)(b) or (c) or subsection 493(4) or 495(1) or (2) of the Act; or (f) any activity prescribed under paragraph 971(3)(e) of the Act.
	EXEMPTION FROM RESTRICTIONS ON INVESTMENTS
Exemption from restrictions	3. For the purposes of subparagraph 2(3)(e)(ii), subsections 495(6) to (8) of the Act do not apply in determining whether a company would be permitted to acquire a substantial investment in an entity under subsection 493(2), paragraph 493(3)(b) or (c) or subsection 493(4) or 495(1) or (2) of the Act.
	NON-APPLICATION OF SUBSECTION 971(5) OF THE ACT
Non-application	4. Subsection 971(5) of the Act does not apply where, under paragraph 971(2)(f) of the Act, an insurance holding company acquires control of, or acquires or increases a substantial investment in, an entity whose business is limited to activities described in subsection 2(1).Nothing in this section limits the operation of subsections 2(2) and (3).
	COMING INTO FORCE
Coming into force	5. These Regulations come into force on the day on which they are registered.
	[51-1-o]

Information Technology Activities (Life Companies) Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see the Information Technology Activities (Authorized Foreign Banks) Regulations.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to sections 501 (see footnote i) and 1021 (see footnote j) of the Insurance Companies Act (see footnote k) , proposes to make the annexed Information Technology Activities (Life Companies) Regulations.

Ottawa, December 12, 2002

EILEEN BOYD
Assistant Clerk of the Privy Council

	INFORMATION TECHNOLOGY ACTIVITIES (LIFE COMPANIES) REGULATIONS
	INTERPRETATION
Definitions "Act"	1. The following definitions apply in these Regulations. "Act" means the Insurance Companies Act.
"book value"	"book value", in respect of the shares and ownership interests held by an entity, means the book value reported on the entity's balance sheet on an unconsolidated basis.
"member of a life company's group"	"member of a life company's group" has the same meaning as in subsection 490(2) of the Act.
	PRESCRIBED PURPOSE OR CIRCUMSTANCE
Prescribed purpose or circumstance	2. For the purposes of subparagraph 441(1)(d.1)(iii) of the Act and subject to the approval required under paragraph 441(1)(d.1) of the Act, a life company may develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used for a purpose or in a circumstance that is materially related to the provision of financial products or services by the life company or a member of the life company's group.
	INVESTMENTS
Prescribed activity	3. (1) For the purposes of paragraph 495(2)(f) of the Act and subject to subsections (2) and (3), a prescribed activity in relation to an entity is developing, designing, holding, managing, manufacturing, selling or otherwise dealing with any data transmission system, information site, communication device or information platform or portal that is used to provide information services.
Limit on size of investment	(2) A life company may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the sum of the following exceeds 5% of the life company's regulatory capital: (a) the aggregate book value of the shares and ownership interests that the life company and its subsidiaries, whether individually or jointly, would acquire in the entity under paragraph 495(2)(f) of the Act; (b) the aggregate book value of the shares and ownership interests held by the life company and its subsidiaries, whether individually or jointly, in entities engaging in an activity described in subsection (1) that the life company holds control of, or a substantial investment in, under paragraph 495(2)(f) of the Act; and (c) the aggregate value of outstanding loans made by the life company and its subsidiaries, whether individually or jointly, to entities engaging in an activity described in subsection (1) that the life company holds control of, or a substantial investment in, under paragraph 495(2)(f) of the Act.
Restricted activities	(3) A life company may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include (a) activities that a company is not permitted to engage in under any of sections 466, 469 and 475 of the Act; (b) dealing in securities, except as may be permitted under paragraph 495(2)(e) of the Act or as may be permitted to a company under paragraph 440(2)(b) of the Act; (c) dealing in goods, wares or merchandise that a company is not permitted to deal in under subsection 441(3) of the Act, other than as permitted under subsection (1); (d) activities that a company is not permitted to engage in under any regulation made under section 489 of the Act if the entity engages in the activities of a finance entity or of any other entity prescribed under paragraph 495(3)(c) of the Act; (e) 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 life company, the life company itself would be permitted under Part IX of the Act to acquire a substantial investment in the other entity, or (ii) in the case of an entity that is not controlled by the life company, the life company itself would be permitted to acquire a substantial investment in the other entity under subsection 493(2), paragraph 493(3)(b) or (c) or subsection 493(4) or 495(1) or (2) of the Act; or (f) any activity prescribed under paragraph 495(3)(e) of the Act.
	EXEMPTION FROM RESTRICTIONS ON INVESTMENTS
Exemption from restrictions	4. For the purposes of subparagraph 3(3)(e)(ii), subsections 495(6) to (8) of the Act do not apply in determining whether a life company would be permitted to acquire a substantial investment in an entity under subsection 493(2), paragraph 493(3)(b) or (c) or subsection 493(4) or 495(1) or (2) of the Act.
	NON-APPLICATION OF SUBSECTION 495(7) OF THE ACT
Non-application	5. Subsection 495(7) of the Act does not apply where, under paragraph 495(2)(f) of the Act, a life company acquires control of, or acquires or increases a substantial investment in, an entity whose business is limited to activities described in subsection 3(1). Nothing in this section limits the operation of subsections 3(2) and (3).
	COMING INTO FORCE
Coming into force	6. These Regulations come into force on the day on which they are registered.
	[51-1-o]