Securities Dealing Restrictions (Authorized Foreign Banks) Regulations

The Securities Dealing Restrictions (Authorized Foreign Banks) Regulations, made pursuant to section 548 of the Bank Act, were brought into effect by His Excellency the Governor General in Council on June 23, 1999. The regulations impose restrictions on authorized foreign banks dealing in securities within Canada. These restrictions include limitations on primary and secondary market trading, as well as certain types of transactions such as acting as a selling agent for mutual funds. The regulations also permit certain exceptions, including dealings for the bank's own account or providing investment counselling and portfolio management services.

The regulations restrict authorized foreign banks from dealing in securities to the extent that they involve:

• Primary distribution of shares or ownership interests, or warrants


• Secondary market trading in shares or ownership interests, or warrants


• Primary distribution of debt obligations of a body corporate, or warrants


• Acting as a selling agent in connection with the distribution of mutual funds

However, the regulations permit authorized foreign banks to deal in securities for certain purposes, including:

• Dealing in securities for its own account or any account administered by the bank


• Providing investment counselling and portfolio management services


• Dealing in securities related to government debt obligations, or warrants in respect thereof


• Acting as a selling agent for mutual funds where the dealings relate to corporate-sponsored accounts

These regulations come into force on June 28, 1999.