Exempt Debt Obligation Transactions (Banks and Bank Holding Companies) Regulations

The Exempt Debt Obligation Transactions (Banks and Bank Holding Companies) Regulations come into force on October 4, 2001. These regulations were made by Her Excellency the Governor General in Council, pursuant to section 978 of the Bank Act.

The regulations exempt certain debt obligation transactions from the requirement to file a prospectus under the laws of Canada, a province or a jurisdiction outside Canada. The exemption applies to debt obligations issued to at least 25 persons other than the bank or its subsidiaries within six months after the day on which the first debt obligation was issued, or where the debt obligations are issued on a continuous basis, there are on average at least 25 holders other than the bank or its subsidiaries.

The regulations also provide for the definition of "widely distributed" in respect of a bank, which means that at least 90% of the maximum authorized principal of the debt obligations is held by one or more persons other than the bank or its subsidiaries. The regulations further define "maximum authorized principal" as the maximum amount of debt that may be issued under the terms of the debt obligation or any agreement relating to it.

The regulations repeal certain provisions of the Bank Act and come into force on October 4, 2001, in relation to banks and bank holding companies. The regulations have been made pursuant to section 183 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001.