Specialized Financing (Bank Holding Companies) Regulations

The Specialized Financing (Bank Holding Companies) Regulations, made by Her Excellency the Governor General in Council under the Bank Act, were brought into force on November 1, 2001. The regulations aim to regulate the ownership and control of specialized financing entities by bank holding companies.

The regulations define a specialized financing entity as an entity that acquires or holds shares of, or ownership interests in, entities that a bank may acquire control of, or hold, acquire or increase a substantial investment in, under subsection 466(4) of the Act. The regulations also specify the conditions under which a bank holding company can acquire or increase its interest in a specialized financing entity.

The regulations prohibit certain acquisitions or investments by bank holding companies if they would exceed specified thresholds, such as twice the value of the sum of the excess assets over liabilities of the specialized financing entity and its non-controlling interests. The regulations also provide exceptions for certain entities and periods.

Overall, these Regulations aim to maintain financial stability and prevent excessive risk-taking by bank holding companies in relation to their ownership and control of specialized financing entities.