Specialized Financing (Foreign Banks) Regulations

P.C. 2001-1803, October 4, 2001 Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 522.23Footnote a and 978Footnote b of the Bank ActFootnote c, hereby makes the annexed Specialized Financing (Foreign Banks) Regulations.

These Regulations apply to specialized financing activities under paragraph 522.1(e) of the Act and to the ownership by a foreign bank or an entity associated with a foreign bank of shares of, or ownership interests in, a specialized financing entity under paragraph 522.08(1)(b) of the Act.

The Regulations set out certain conditions that must be met in order for a foreign bank or an entity associated with a foreign bank to engage in specialized financing activities in Canada. These conditions include limits on investments and restrictions on ownership and control.

Specifically, a foreign bank or an entity associated with a foreign bank shall not acquire or hold control of, or a substantial investment in, a Canadian entity if the aggregate balance sheet value of the shares and ownership interests held by the following entities is more than $250 million. Additionally, a foreign bank shall not hold control of, or a substantial investment in, a specialized financing entity for more than 13 consecutive years.

The Regulations also provide an exception for certain situations where the specialized financing entity is controlled by the specialized financing entity of the foreign bank.

These Regulations come into force on October 24, 2001.