Notifiable Transactions Regulations (SOR/87-348)

Short Title

1 These Regulations may be cited as the Notifiable Transactions Regulations.

Interpretation

2 In these Regulations,

Act

Act means the Competition Act; (Loi)

asset securitization transaction

asset securitization transaction means a transaction or series of related transactions entered into where

• (a) for the purpose of obtaining funds or credit or for related financial purposes, a person, directly or indirectly, sells, assigns, transfers, leases or otherwise disposes of financial assets to a person or persons or a trust or trusts who acquire an undivided co-ownership interest or interests in the financial assets or whose business consists solely or primarily of acquiring, holding or creating interests in, creating securities or debt backed or secured by, or otherwise dealing in, financial assets, and

• (b) after their disposal, the financial assets will be administered, serviced and operated by

  • (i) the person disposing of the financial assets or an affiliate of that person,

  • (ii) a person that is an agent of or a trustee for all persons that own securities or debt backed or secured by, or representing an interest in, the financial assets unless there is a person that, together with that person’s affiliates, owns, directly or indirectly, or exercises control or direction over more than 10 per cent of the securities or debt backed or secured by, or representing an interest in, the financial assets, or

  • (iii) any other person or trust other than,

    • (A) a person or persons or trust or trusts that acquire any interest in the financial assets unless the interest is held by way of security only or is limited to an undivided co-ownership interest or interests that, in aggregate, are not more than 10 per cent of all the interests,

    • (B) an affiliate of a person described in clause (A),

    • (C) a person that, together with that person’s affiliates, owns, directly or indirectly, or exercises control or direction over more than 10 per cent of the securities or debt backed or secured by, or representing an interest in, the financial assets,

    • (D) a person that owns, directly or indirectly,

      • (I) securities carrying more than 10 per cent of the voting rights attached to all voting securities for the time being outstanding of a person described in clause (C), or

      • (II) more than 10 per cent of the equity securities for the time being outstanding of a person described in clause (C), or

    • (E) a corporation of which a person described in clause (C) owns, directly or indirectly,

      • (I) securities carrying more than 10 per cent of the voting rights attached to all voting securities of the corporation for the time being outstanding, or

      • (II) more than 10 per cent of the equity securities of the corporation for the time being outstanding; (transaction de titralisation d’éléments d’actif)

audited financial statements

audited financial statements means financial statements in respect of which a report has been prepared by an external professional auditor accredited for that purpose who is a member in good standing of any corporation, association or institute of professional accountants; (états financiers vérifiés)

equity security

equity security means any security that carries a residual right to participate in the earnings of the issuer of the security and, upon the liquidation and winding up of the issuer, in the issuer’s assets; (Titres de toute nature)

financial asset

financial asset means any interest, including any related security or collateral, in any

• (a) debt, receivable, account, claim or other right to payment,

• (b) contract or obligation that generates or secures any thing referred to in paragraph (a), and

• (c) security (other than a voting share of a corporation or an interest in a combination) backed or secured by, or representing an interest in, a thing referred to in paragraph (a) or (b) or in both paragraphs (a) and (b); (actif financier)

reference date

reference date means

• (a) where the Commissioner is notified of a proposed transaction pursuant to section 114 of the Act, the date on which the Commissioner receives the notification; and

• (b) where the notification referred to in paragraph (a) is not given to the Commissioner,

  • (i) in the case of a proposed transaction referred to in subsection 110(4) of the Act, the thirtieth day preceding the day on which articles of amalgamation in respect of the proposed transaction are filed with the appropriate governmental or regulatory authority, and

  • (ii) in the case of a proposed transaction referred to in subsection 110(2), (3), (5) or (6) of the Act, the thirtieth day preceding the day on which beneficial ownership of property forming any part of the subject-matter of the transaction is to be conveyed, assigned or otherwise transferred; (date de référence)

senior officer

senior officer[Repealed, SOR/2010-22, s. 1]

voting security

voting security means any security that carries voting rights under all circumstances or by reason of an event that has occurred and is continuing. (Titres comportant droit de vote)

Audited Financial Statements

3 Audited financial statements shall

• (a) be prepared in accordance with accounting principles that are normally used by the person with respect to whom the statements were prepared and that are generally accepted for the type of business carried on by the person; and

• (b) include working papers and other records used to prepare audited financial statements if reference to the working papers and other records is necessary to obtain information required for making a determination, pursuant to sections 109 and 110 of the Act, of the aggregate value of assets or the gross revenues from sales.

Determination of Aggregate Value — General

• 4 (1) For the purposes of sections 109 and 110 of the Act, in determining the aggregate value of assets, the following amounts shall be deducted:

  • (a) any amount that represents duplication arising from transactions between affiliates;

  • (b) any amount that represents duplication arising from an ownership interest of one person in another person, whether or not those persons are affiliated; and

  • (c) any amount provided for depreciation or diminution of value.

• (2) For the purposes of sections 109 and 110 of the Act, in determining the aggregate value of assets, no amount shall be deducted for liabilities or encumbrances.

• (3) The aggregate value of assets shall be expressed in Canadian dollars.

• (4) The conversion into Canadian dollars of the aggregate amount of assets reported in foreign currency shall be based on the noon exchange rate quoted by the Bank of Canada on the date that the aggregate value of assets is to be determined in accordance with these Regulations.

• 5 (1) Subject to subsection (2), for the purposes of sections 109 and 110 of the Act, the gross revenues from sales of a person for an annual period shall be determined by aggregating the following amounts accruing to that person during that period:

  • (a) amounts accruing from the sale or lease of goods, other than amounts that are not properly included in revenue in accordance with the accounting principles referred to in paragraph 3(a), and

  • (b) amounts accruing from the rendering of services,

  without deducting any expenses or other amounts incurred or provided for in relation to the sale or lease of goods or the rendering of services.

• (2) In determining the gross revenues from sales, any amount that represents duplication arising from transactions between affiliates shall be deducted.

• (3) Gross revenues from sales shall be expressed in Canadian dollars.

• (4) The conversion into Canadian dollars of the gross revenues from sales reported in foreign currency shall be based on the noon exchange rate quoted by the Bank of Canada on the last day of the annual period for which the gross revenues from sales are to be determined in accordance with these Regulations.

6 Subject to section 12, for the purposes of sections 109 and 110 of the Act, the aggregate value of assets of a person shall be determined as of the last day of the period covered by the most recent audited financial statements in which those assets are accounted for, where that day is not more than 15 months prior to the reference date.

7 Subject to section 13, for the purposes of sections 109 and 110 of the Act, gross revenues from sales of a person shall be determined for the annual period ended on the last day, which day is not more than 15 months prior to the reference date, of the period

• (a) covered by the most recent audited financial statements in which those gross revenues are accounted for; and

• (b) in the case where the period covered by the financial statements referred to in paragraph (a) is less than 12 months, covered by those financial statements and by audited financial statements in which the gross revenues are accounted for, covering the balance of the 12-month period.

Provisions with Respect to Parties to the Transaction

• 8 (1) For the purposes of paragraph 109(1)(a) of the Act, the aggregate value of assets in Canada of the parties to a transaction, together with their affiliates, shall be determined by aggregating the aggregate values of the assets in Canada of each of the parties and each affiliate.

• (2) For each party or affiliate referred to in subsection (1), the aggregate value of its assets in Canada shall equal the aggregate amount of those assets as stated in the audited financial statements referred to in section 6.

• 9 (1) For the purposes of paragraph 109(1)(b) of the Act, gross revenues from sales in, from or into Canada of the parties to a transaction, together with their affiliates, shall be determined by aggregating the gross revenues from sales in, from or into Canada of each of the parties and each affiliate.

• (2) For each party or affiliate referred to in subsection (1), the gross revenues from sales in, from or into Canada shall equal the aggregate amount of those gross revenues as stated in the audited financial statements referred to in section 7.

Provisions with Respect to Parties to an Amalgamation

• 9.1 (1) For the purpose of subsection 110(4.1) of the Act, the aggregate value of assets in Canada of an amalgamating corporation, together with its affiliates, shall be determined by aggregating the aggregate values of the assets in Canada of the corporation and each affiliate.

• (2) For the amalgamating corporation and each affiliate, the aggregate value of its assets in Canada shall equal the aggregate amount of those assets as stated in the audited financial statements referred to in section 6.

• 9.2 (1) For the purpose of subsection 110(4.1) of the Act, gross revenues from sales in, from or into Canada of an amalgamating corporation, together with its affiliates, shall be determined by aggregating the gross revenues from sales in, from or into Canada of the corporation and each affiliate.

• (2) For the amalgamating corporation and each affiliate, the gross revenues from sales in, from or into Canada shall equal the aggregate amount of those gross revenues as stated in the audited financial statements referred to in section 7.

Provisions Applicable to Transactions

10 For the purposes of subsections 110(2) to (4), (5) and (6) of the Act, the aggregate value of assets in Canada

• (a) of an operating business referred to in subsection 110(2) of the Act,

• (b) that are owned by any corporation referred to in paragraph 110(3)(a) of the Act,

• (c) that would be owned by any corporation referred to in paragraph 110(4)(a) of the Act, or

• (d) that are the subject-matter of a combination referred to in subsection 110(5) or (6) of the Act

shall equal the aggregate value of such assets, as stated in the audited financial statements referred to in section 6.

11 For the purposes of subsections 110(2) to (4), (5) and (6) of the Act, the gross revenues from sales in or from Canada generated from the assets in Canada

• (a) of an operating business referred to in subsection 110(2) of the Act,

• (b) that are owned by any corporation referred to in paragraph 110(3)(a) of the Act,

• (c) that would be owned by any corporation referred to in paragraph 110(4)(a) of the Act, or

• (d) that are the subject-matter of a combination referred to in subsection 110(5) or (6) of the Act

shall equal the aggregate amount of the gross revenues from sales in or from Canada generated from such assets, as stated in the audited financial statements referred to in section 7.

Determination of Aggregate Value — Specific Circumstances

• 12 (1) If the aggregate value of a person’s assets cannot reasonably be determined in accordance with subsection 8(2) or 9.1(2) or section 10, the aggregate value of the assets

  • (a) shall equal the aggregate amount of the assets as stated in the books of the person with such adjustment as may be necessary to ensure that the determination is in accordance with the accounting principles referred to in paragraph 3(a); and

  • (b) shall be determined as of the most recent date that the amount can reasonably be determined, provided that that date is within three months prior to the reference date.

• (2) The determination of the aggregate value of assets referred to in subsection (1) is subject to the requirements of section 4.

• 13 (1) If gross revenues from a person’s sales cannot reasonably be determined in accordance with subsection 9(2) or 9.2(2) or section 11, the gross revenues

  • (a) shall equal the amount of the gross revenues as stated in the books of the person with such adjustments as may be necessary to ensure that the determination is in accordance with the accounting principles referred to in paragraph 3(a); and

  • (b) shall be determined for the most recent annual period for which the amount can reasonably be determined provided that the last day of that period is within three months prior to the reference date.

• (2) The determination of the gross revenues from sales referred to in subsection (1) is subject to the requirements of section 5.

• 14 (1) If, subsequent to the day or date referred to in section 6 or 12 or the annual period referred to in section 7 or 13, as the case may be, any party to a proposed transaction or any affiliate of that party was a party to or was otherwise affected by a transaction or event the consequences of which, if taken into account, would affect the determination of whether notification is required to be given under section 114 of the Act with respect to the proposed transaction, the values or amounts referred to in sections 8 to 13 shall be adjusted to reflect that transaction or event.

• (2) A transaction or event referred to in subsection (1) includes any of the following:

  • (a) a write-down or re-evaluation for financial reporting purposes of the value of any assets of the parties to the proposed transaction or their affiliates;

  • (b) any disposition, acquisition or reorganization that is likely to have a material effect on the aggregate value of the assets of the parties to the proposed transaction or their affiliates; and

  • (c) any agreement, arrangement, understanding or other transaction or event that is likely to have a material effect on the aggregate value of the assets or gross revenues from sales of the parties to the proposed transaction or their affiliates.

14.1 [Repealed, SOR/2010-22, s. 8]

Transactions that Are Exempt from Part IX of the Act

• 15 (1) A transaction that is an acquisition of financial assets that is undertaken to give effect to an asset securitization transaction is exempt from the application of Part IX of the Act.

• (2) A transaction that is an acquisition of assets other than financial assets that is undertaken to give effect to an asset securitization transaction is exempt from the application of Part IX of the Act, unless any person would, as a result of the transaction or transactions, acquire all or substantially all of the assets, other than financial assets, of a business or an operating segment of a business carried on by the person disposing of the assets.

Information Required

• 16 (1) For the purposes of subsection 114(1) of the Act and subject to subsection (2), the following information is to be supplied to the Commissioner:

  • (a) a description of the proposed transaction and the business objectives intended to be achieved as a result of it;

  • (a.1) a copy of each legal document, or the most recent draft of that document if it is not yet executed, that is to be used to implement the proposed transaction;

  • (b) a list of the foreign competition or antitrust authorities that have been notified of the proposed transaction by the parties and the date on which each authority was notified;

  • (c) in respect of each party,

    • (i) its full name,

    • (ii) the addresses of its principal offices,

    • (iii) a list of its affiliates that have significant assets in Canada or significant gross revenues from sales in, from or into Canada and a chart describing the relationships between the party and those affiliates, and

    • (iv) a description of its principal businesses and the principal businesses of its affiliates referred to in subparagraph (iii), including

      • (A) their most recent annual report and, if the annual report is not available or if the financial statements are different from those contained in the report, audited financial statements relating to their principal businesses for their most recently completed fiscal year, and financial statements for subsequent interim periods,

      • (B) a summary description of each of the principal categories of products, as defined by the party in its day-to-day operations, that it produces, supplies or distributes and each of the principal categories of products produced, supplied or distributed by its affiliates referred to in subparagraph (iii),

      • (C) statements identifying, for each of those principal categories of products, the twenty most important current suppliers and customers, the contact names, the telephone numbers and addresses of those suppliers and customers, and the annual volume or dollar value of purchases from and sales to those suppliers and customers,

      • (C.1) statements identifying, for each of those principal categories of products, the total annual volume or dollar value of purchases from and sales to all suppliers and customers, and

      • (D) the geographic regions of sales for its principal businesses and the principal businesses of its affiliates; and

  • (d) in respect of each party, and each of its affiliates referred to in subparagraph (c)(iii), all studies, surveys, analyses and reports that were prepared or received by an officer or director of the corporation — or in the case of an unincorporated entity, an individual who serves in a similar capacity — for the purpose of evaluating or analysing the proposed transaction with respect to market shares, competition, competitors, markets, potential for sales growth or expansion into new products or geographic regions and, if not otherwise set out in that document, the names and titles of the individuals who prepared the document and the date on which it was prepared.

• (2) Instead of being supplied with a report or financial statement referred to in clause (1)(c)(iv)(A), the Commissioner may be supplied with the address of an Internet site from which a copy of those documents can be obtained without charge, which is operational at the time the address is supplied and which remains operational prior to the expiry of the period referred to in subsection 123(1) of the Act.

17 [Repealed, SOR/2010-22, s. 10]