An Act to amend the law governing financial institutions and to provide for related and consequential matters (S.C. 2007, c. 6)
Full Document:
Assented to 2007-03-29
233. Subsection 490(1) of the Act is amended by adding the following in alphabetical order:
“closed-end fund”
« fonds d’investissement à capital fixe »
“closed-end fund” means an entity whose activities are limited to investing the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities, and whose securities are
(a) fixed in number and distributed to the public in an offering under a preliminary prospectus, prospectus, short-form prospectus or similar document in accordance with the laws of a province or a foreign jurisdiction;
(b) traded on an exchange or an over-the-counter market; and
(c) liquidated on a fixed future termination date, the proceeds of which are allocated to the holders of the securities on a proportional basis.
234. Section 493 of the Act is amended by adding the following after subsection (5):
Marginal note:Application of other provision
(6) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a company may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met.
Marginal note:Timing of deemed acquisition
(7) If a company decides to exercise its right under subsection (6), the company is deemed to be acquiring the control or the substantial investment under the other provision.
Marginal note:2001, c. 9, s. 426
235. (1) Paragraph 495(1)(j) of the French version of the Act is replaced by the following:
j) une entité qui est constituée en personne morale ou formée et réglementée autrement que sous le régime d’une loi fédérale ou provinciale et qui exerce principalement, à l’étranger, des activités commerciales qui, au Canada, seraient des opérations bancaires, l’activité d’une société coopérative de crédit, des opérations d’assurance, la prestation de services fiduciaires ou le commerce de valeurs mobilières.
Marginal note:2001, c. 9, s. 426
(2) Paragraph 495(2)(e) of the Act is replaced by the following:
(e) engaging in the activities referred to in the definition “closed-end fund”, “mutual fund distribution entity” or “mutual fund entity” in subsection 490(1); and
Marginal note:2001, c. 9, s. 426
(3) Subsection 495(4) of the Act is replaced by the following:
Marginal note:Exception
(3.1) Despite paragraph (3)(a), a life company may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is
(a) a closed-end fund;
(b) a mutual fund entity; or
(c) an entity whose business is limited to engaging in one or more of the following:
(i) the activities of a mutual fund distribution entity,
(ii) any activity that a company is permitted to engage in under subsection 441(1.1), and
(iii) the provision of investment counselling services and portfolio management services.
Marginal note:Permitted investments — property and casualty companies and marine companies
(4) Subject to subsections (5) to (8) and Part XI, a property and casualty company, or a marine company, may acquire control of, or acquire or increase a substantial investment in, an entity, other than an entity referred to in any of paragraphs (1)(a) to (j), whose business is limited to one or more of the following:
(a) engaging in any financial service activity or in any other activity that a property and casualty company, or a marine company, is permitted to engage in under subsection 440(2) or section 441 or 442, other than paragraph 441(1)(h);
(b) acquiring or holding shares of, or ownership interests in, entities in which a property and casualty company, or a marine company, is permitted under this Part to hold or acquire;
(c) engaging in the provision of any services exclusively to any or all of the following, so long as the entity is providing those services to the company or any member of the company’s group:
(i) the company,
(ii) any member of the company’s group,
(iii) any entity that is primarily engaged in the business of providing financial services,
(iv) any permitted entity in which an entity referred to in subparagraph (iii) has a substantial investment, or
(v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;
(d) engaging in any activity that a property and casualty company, or a marine company, is permitted to engage in, other than an activity referred to in paragraph (a) or (e), that relates to
(i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the company or any member of the company’s group, or
(ii) if a significant portion of the business of the entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services;
(e) engaging in the activities referred to in the definition “closed-end fund”, “mutual fund distribution entity” or “mutual fund entity” in subsection 490(1); and
(f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.
Marginal note:2001, c. 9, s. 426
(4) The portion of subsection 495(5) of the Act before paragraph (c) is replaced by the following:
Marginal note:Restriction — property and casualty companies and marine companies
(5) A property and casualty company, or a marine company, may not acquire control of, or acquire or increase a substantial investment in, an entity whose business includes any activity referred to in any of paragraphs (4)(a) to (e) 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 478;
(b) dealing in securities, except as may be permitted under paragraph (4)(e) or as may be permitted to a company under paragraph 440(2)(b);
(5) Section 495 of the Act is amended by adding the following after subsection (5):
Marginal note:Exception
(5.1) Despite paragraph (5)(a), a property and casualty company, or a marine company, may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is
(a) a closed-end fund;
(b) a mutual fund entity; or
(c) an entity whose business is limited to engaging in one or more of the following:
(i) the activities of a mutual fund distribution entity, and
(ii) the provision of investment counselling services and portfolio management services.
Marginal note:2001, c. 9, s. 426
(6) Paragraph 495(7)(d) of the Act is replaced by the following:
(d) acquire control of, or acquire or increase a substantial investment in, an entity that engages in Canada in an activity described in paragraph 441(1)(d);
(d.1) acquire control of, or acquire or increase a substantial investment in, an entity that engages in an activity described in paragraph 441(1)(d.1); or
Marginal note:2001, c. 9, s. 426
(7) Paragraph 495(9)(a) of the Act is replaced by the following:
(a) the company is acquiring control of an entity, other than a specialized financing entity, and the only reason for which the company would, but for this subsection, require approval for the acquisition is that the entity carries on activities referred to in paragraph (2)(b) or (4)(b);
Marginal note:2001, c. 9, s. 426
236. Subsections 498(4) and (5) of the Act are replaced by the following:
Marginal note:Temporary investment
(4) If a company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister would have been required under subsection 495(7) if the company had acquired the control, or acquired or increased the substantial investment, under section 495, the company must, within 90 days after acquiring control or after acquiring or increasing the substantial investment,
(a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or
(b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity.
Marginal note:Indeterminate extension
(5) If a company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Superintendent would have been required under subsection 495(8) if the company had acquired the control, or acquired or increased the substantial investment, under section 495, the Superintendent may, on application, permit the company to retain control of the entity or to continue to hold the substantial investment in the entity for an indeterminate period, on any terms and conditions that the Superintendent considers appropriate.
237. Subsection 499(1) of the Act is amended by striking out the word “or” at the end of paragraph (c), by adding the word “or” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) all or any of the ownership interests in any entity that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates.
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