Specialized Financing (Retail Associations) Regulations

Marginal note:Limit of 10% of regulatory capital

6 A retail association shall not, by way of specialized financing activities, acquire control of, or hold, acquire or increase a substantial investment in, an entity if the sum of the following exceeds 10% of the retail association’s regulatory capital:

• (a) the aggregate balance sheet value of the shares and ownership interests that the retail association and its subsidiaries, whether individually or jointly, would acquire in the entity,

• (b) the aggregate value of outstanding loans made by the retail association and its subsidiaries, whether individually or jointly, to the specialized financing entities of the retail association, and

• (c) the aggregate balance sheet value of the shares and ownership interests held by the retail association and its subsidiaries, whether individually or jointly, in the specialized financing entities of the retail association, in the entities controlled by the retail association by way of specialized financing activities, and in the entities in which the retail association holds a substantial investment by way of specialized financing activities.