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Canada Pension Plan Investment Board Regulations (SOR/99-190)

Regulations are current to 2021-04-20 and last amended on 2012-12-14. Previous Versions

Interpretation (continued)

 [Repealed, SOR/2012-296, s. 1]

 For the purposes of these Regulations, an entity is affiliated with another entity if the entity is controlled by the other entity or if both entities are controlled by the same person.

 For the purposes of these Regulations, a person has a substantial investment in

  • (a) an unincorporated entity if the person or an entity controlled by the person beneficially owns more than 25 per cent of the ownership interests in the unincorporated entity; and

  • (b) a corporation if

    • (i) the voting rights attached to voting shares of the corporation that are beneficially owned by the person, or by an entity controlled by the person, exceed 10 per cent of the voting rights attached to all of the outstanding voting shares of the corporation, or

    • (ii) shares of the corporation that are beneficially owned by the person, or by an entity controlled by the person, represent ownership of more than 25 per cent of the shareholders’ equity of the corporation.

 For the purposes of these Regulations, a person is associated with

  • (a) a corporation that the person controls and every affiliate of every such corporation;

  • (b) a person who controls the person;

  • (c) a partner who has a substantial investment in a partnership in which the person has a substantial investment;

  • (d) a trust or estate in which the person has a substantial investment or for which the person serves as trustee or in a similar capacity to a trustee;

  • (e) the spouse of the person; and

  • (f) a brother, sister or child or other descendant of the person, or the spouse of any of them.

PART 1Investments

 In selecting investments, the Board shall evaluate them having regard to the overall rate of return and risk of loss of the entire portfolio of investments held by the Board.

Statement of Investment Policies, Standards and Procedures

  •  (1) A written statement of the investment policies, standards and procedures in respect of the Board’s portfolio of investments, established under section 35 of the Act, shall include

    • (a) categories of investments;

    • (b) the use of options, futures and other derivatives;

    • (c) diversification of the investment portfolio;

    • (d) asset mix and rate of return expectations;

    • (e) policies for the management of credit, market and other financial risks;

    • (f) liquidity of investments;

    • (g) the lending of cash or securities;

    • (h) the retention or delegation of voting rights acquired through investments;

    • (i) the method of, and basis for, the valuation of investments that are not regularly traded at a public exchange; and

    • (j) related-party transactions permitted under section 17 and the criteria used to establish whether a transaction is nominal.

    • (k) [Repealed, SOR/2001-522, s. 1]

  • (2) The statement of investment policies, standards and procedures referred to in subsection (1) shall include a description of all factors that may affect the funding of the Canada Pension Plan and the ability of the Canada Pension Plan to meet its financial obligations and the relationship of those factors to those policies, standards and procedures.

  • (3) The board of directors shall review and confirm or amend the statement at least once each financial year.

  • SOR/2001-522, s. 1
  • SOR/2010-284, s. 3(F)

 [Repealed, SOR/2005-150, s. 1]

 [Repealed, SOR/2001-522, s. 2]

Quantitative Limits

  •  (1) The Board shall not directly or indirectly invest more than 10 per cent of the total book value of the Board’s assets in the securities of

    • (a) any one person;

    • (b) two or more associated persons; or

    • (c) two or more affiliated corporations.

  • (2) Subsection (1) does not apply in respect of investments in

    • (a) a subsidiary of the Board;

    • (b) securities issued or fully guaranteed by the Government of Canada, the government of a province, or an agency of either of them;

    • (c) a fund composed of mortgage-backed securities that are fully guaranteed by the Government of Canada, the government of a province, or an agency of either of them;

    • (d) a fund that replicates the composition of a widely recognized index of a broad class of securities traded on a public exchange; or

    • (e) a segregated fund or mutual or pooled fund that complies with the requirements applicable to a plan under the Pension Benefits Standards Regulations, 1985.

 [Repealed, SOR/2012-296, s. 2]

  •  (1) The Board shall not directly or indirectly invest in the securities of a corporation to which are attached more than 30 per cent of the votes that may be cast to elect the directors of the corporation.

  • (2) Subsection (1) does not apply in respect of investments in securities issued by a subsidiary of the Board.

 [Repealed, SOR/2007-13, s. 1]

Related Party Transactions

[SOR/2010-284, s. 3(F)]

 For the purposes of sections 16 and 17

  • (a) if a transaction is entered into by, or on behalf of, the Board with a person who the Board, or any person acting on the Board’s behalf, knows will become a related party to the Board, the person shall be considered to be a related party of the Board in respect of the transaction; and

  • (b) the fulfilment of an obligation under the terms of any transaction, including the payment of interest on a loan or deposit, is part of the transaction and not a separate transaction.

  • SOR/2010-284, s. 3(F)
  •  (1) Subject to sections 17 and 18, the Board shall not directly or indirectly enter into a transaction with a related party.

  • (2) Subject to sections 17 and 18, within the 12-month period after the day on which a person ceases to be a related party, the Board shall not directly or indirectly enter into a transaction with that person.

  • SOR/2010-284, s. 3(F)
  •  (1) The Board may enter into a transaction with a related party if

    • (a) the transaction is required for the operation or administration of the Board; and

    • (b) the terms and conditions of the transaction are not less favourable to the Board than market terms and conditions.

  • (2) The Board may invest the moneys of the Board in the securities of a related party if those securities are acquired at a public exchange.

  • (3) The Board may enter into a transaction with a related party if the value of the transaction is nominal.

  • (4) For the purposes of subsection (3), in assessing whether the value of a transaction is nominal, two or more transactions with the same related party shall be considered as a single transaction.

  • SOR/2010-284, s. 3(F)

 Sections 11 to 16 do not apply in respect of

  • (a) investments in a corporation that are held as a result of an arrangement, within the meaning of subsection 192(1) of the Canada Business Corporations Act, for the reorganization or liquidation of the corporation or for the amalgamation of the corporation with another corporation, if the investments are to be exchanged for shares or debt obligations; or

  • (b) assets that are acquired through the realization of a security interest held by the Board and that are held for a period not exceeding two years after the day on which the assets were acquired.

  • SOR/2001-522, s. 3
 
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