Money Market Mutual Fund Conditions Regulations (SOR/2001-475)

Interpretation

Marginal note:Definitions

• 1 (1) The following definitions apply in these Regulations.

  approved credit rating

  approved credit rating, in respect of a security or instrument of a type described in the heading of column 2 or 3 of the schedule, means a rating that has been issued by an approved credit rating organization set out in column 1 of an item of the schedule and that is at or above the rating category set out for that type of security or instrument in column 2 or 3 of that item, or that is at or above a rating category that the approved credit rating organization has adopted to replace that rating category. (note approuvée)

  approved credit rating organization

  approved credit rating organization means

  • (a) Dominion Bond Rating Service Limited;

  • (b) Fitch, Inc.;

  • (c) Moody’s Investors Service, Inc.;

  • (d) Standard & Poor’s Corporation; or

  • (e) a successor of an organization named in any of paragraphs (a) to (d). (agence de notation agréée)

  Canadian financial institution

  Canadian financial institution means

  • (a) any of the following that is authorized to carry on business under the laws of Canada or a province, namely,

    • (i) a bank,

    • (ii) an authorized foreign bank,

    • (iii) a loan company,

    • (iv) a trust company,

    • (v) an insurance company to which the Insurance Companies Act applies,

    • (vi) an insurance corporation incorporated by or under an Act of the legislature of a province,

    • (vii) a central cooperative credit society,

    • (viii) a cooperative credit association, or

    • (ix) a local cooperative credit society;

  • (b) Alberta Treasury Branches, established under the Alberta Treasury Branches Act of the Province of Alberta; or

  • (c) the Fédération des caisses Desjardins du Québec. (institution financière canadienne)

  cash equivalent

  cash equivalent means an evidence of indebtedness that has a remaining term to maturity of 365 days or less and is issued, or fully and unconditionally guaranteed as to principal and interest

  • (a) by the Government of Canada or the government of a province;

  • (b) by the government of the United States, the government of one of the states of the United States, the government of another sovereign state or a permitted supranational agency, if the evidence of indebtedness has an approved credit rating; or

  • (c) by a Canadian financial institution, or by a financial institution that is not incorporated or organized under the laws of Canada or a province, if the evidences of indebtedness of that issuer or guarantor that are rated as short-term debt by an approved credit rating organization have an approved credit rating. (quasi-espèces)

  permitted supranational agency

  permitted supranational agency means

  • (a) the African Development Bank;

  • (b) the Asian Development Bank;

  • (c) the Caribbean Development Bank;

  • (d) the European Bank for Reconstruction and Development;

  • (e) the Inter-American Development Bank;

  • (f) the International Bank for Reconstruction and Development;

  • (g) the International Finance Corporation; or

  • (h) any person that is prescribed for the purpose of subparagraph (g)(v) of the definition foreign property in subsection 206(1) of the Income Tax Act. (organisme supranational accepté)

• Marginal note:Approved credit rating

  (2) For the purposes of these Regulations, a security or an instrument is considered to have an approved credit rating only if

  • (a) an approved credit rating organization has issued an approved credit rating for the security or instrument;

  • (b) the approved credit rating organization has not made any announcement that the rating of the security or instrument may be downgraded to a rating category that would not be an approved credit rating; and

  • (c) no approved credit rating organization has rated the security or instrument in a rating category that is not an approved credit rating.

Conditions for Money Market Mutual Funds

Marginal note:Conditions

2 A money market mutual fund must satisfy the following conditions:

• (a) all of its assets must be invested in one or more of the following, namely,

  • (i) cash,

  • (ii) cash equivalents,

  • (iii) evidences of indebtedness, other than cash equivalents, that have remaining terms to maturity of 365 days or less, and

  • (iv) floating rate evidences of indebtedness not referred to in subparagraphs (ii) and (iii), if the principal amounts of the obligations will continue to have a market value of approximately par at the time of each change in the rate to be paid to the holders of the evidences of indebtedness;

• (b) its portfolio of evidences of indebtedness must have a dollar-weighted average term to maturity not exceeding 90 days, calculated on the basis that the term of a floating rate obligation is the period remaining to the date of the next rate setting;

• (c) not less than 95% of its assets must be invested in cash, cash equivalents or evidences of indebtedness denominated in a currency in which the net asset value per security of the mutual fund is calculated; and

• (d) not less than 95% of its assets must be invested in one or more of the following, namely,

  • (i) cash,

  • (ii) cash equivalents, or

  • (iii) evidences of indebtedness of issuers whose commercial paper has an approved credit rating.

Coming into Force

Marginal note:Coming into force

3 These Regulations come into force on November 7, 2001.