National Housing Act (R.S.C., 1985, c. N-11)

Marginal note:Obligation to retain information, books and records

• 21.1 (1) The Corporation shall keep and retain books and records, and retain information, in respect of its activities under this Part and Part I.1, including any books, records or information that are prescribed by regulation.

• Marginal note:Obligation to provide information or copies

  (2) At the request of the Minister of Finance, the Corporation shall, without delay, provide that Minister with any information or copies of any books or records that it is required to retain.

• Marginal note:Power to disclose

  (3) The Minister of Finance may disclose to the Superintendent, the Governor of the Bank of Canada, the Chief Executive Officer of the Canada Deposit Insurance Corporation and the Commissioner of the Financial Consumer Agency of Canada any information or copies of any books or records received under subsection (2).

• Marginal note:Public information

  (4) The Corporation shall make available to the public the books, records and information that are prescribed by regulation.

• Marginal note:Regulations

  (5) The Governor in Council may, on the Minister of Finance’s recommendation, make regulations respecting the manner in which books and records are to be kept and retained, the manner in which information is to be retained and the manner in which books, records and information are to be made available to the public.

Marginal note:Examination or inquiry

• 21.2 (1) The Superintendent, from time to time but at least once in each calendar year, shall make or cause to be made any examination or inquiry that the Superintendent considers to be necessary or expedient to determine whether the Corporation is carrying on any or all of its activities under this Part and Part I.1 in a safe and sound manner, including whether it is carrying on those activities with due regard to its exposure to loss.

• Marginal note:Access to records

  (2) For the purposes of the examination or inquiry, the Superintendent or a person acting under his or her direction

  • (a) has a right of access to any books or records that are held by or on behalf of the Corporation in respect of its activities; and

  • (b) may require the Corporation’s directors, officers and auditors to provide information and explanations to the Superintendent, to the extent that they are reasonably able to do so, in respect of the Corporation’s activities.

• Marginal note:Report to Corporation and Ministers

  (3) The Superintendent shall report the results of the examination or inquiry, including any recommendations, to

  • (a) the Corporation’s board of directors; and

  • (b) the Minister and the Minister of Finance.

• Marginal note:Proposal in corporate plan

  (4) The Corporation’s corporate plan that is required under section 122 of the Financial Administration Act must contain a proposal indicating how the Corporation will address the recommendations.

• Marginal note:Obligation to provide information or copies

  (5) At the request of the Superintendent, the Corporation shall, without delay, provide him or her with any information or copies of any books or records that it is required to retain in respect of its activities under this Part and Part I.1.

• Marginal note:Confidentiality

  (6) Subject to any other provision of this Act, all information in respect of the Corporation’s activities under this Part and Part I.1, including regarding a person dealing with the Corporation, that is obtained by the Superintendent or a person acting under his or her direction is confidential and shall be treated accordingly.

• Marginal note:Power to disclose

  (7) The Superintendent may disclose any information or copies of any books or records that are received under this Part or Part I.1 to

  • (a) the Minister and the Minister of Finance;

  • (b) the Governor of the Bank of Canada;

  • (c) the Chief Executive Officer of the Canada Deposit Insurance Corporation; and

  • (d) the Commissioner of the Financial Consumer Agency of Canada.

Marginal note:Superintendent to ascertain expenses

• 21.3 (1) The Superintendent shall, before December 31 in each year, ascertain the total amount of expenses incurred during the preceding fiscal year in connection with the administration of section 21.2.

• Marginal note:Obligation to pay

  (2) The Corporation shall pay the amount within 30 days after the day on which the Superintendent notifies it in writing of the amount.

• Marginal note:Fiscal year

  (3) For the purpose of subsection (1), the fiscal year is the period beginning on April 1 in one year and ending on March 31 in the next year.

Marginal note:Regulations

21.4 The Governor in Council may, on the Minister of Finance’s recommendation, make regulations respecting the Corporation’s activities under this Part, including regulations

• (a) respecting the conditions and limitations to which those activities are subject;

• (b) respecting the terms and conditions on which and manner in which the Corporation may exercise its powers under this Part; and

• (c) prescribing anything that is to be prescribed by this Part.

PART I.1Covered Bonds

Definitions

Marginal note:Definitions

21.5 The following definitions apply in this Part.

affiliate

affiliate means an affiliate as defined in section 2 of the Bank Act. (groupe)

covered bond

covered bond means, except in paragraph 21.53(b), a debt obligation in relation to which the principal and interest owing are guaranteed to be paid from the loans or other assets held by a guarantor entity. (obligation sécurisée)

covered bond collateral

covered bond collateral means the loans or other assets that secure the payment of principal, interest and any other amounts owing in relation to the covered bonds that are issued under a registered program. (garantie d’obligations sécurisées)

derivatives agreement

derivatives agreement means a financial agreement whose obligations are derived from, referenced to, or based on, one or more underlying reference items. (contrat dérivé)

guarantor entity

guarantor entity means an entity that is created and organized for the principal purpose of holding loans or other assets as the covered bond collateral for a registered program with the intention of legally isolating those loans or other assets from the registered issuer. (societé garante)

registered issuer

registered issuer means an institution that is registered in the registry under section 21.53. (émetteur inscrit)

registered program

registered program means a program that is registered in the registry under section 21.55. (programme inscrit)

registry

registry means the registry established under section 21.51. (registre)

Establishment of Legal Framework

Marginal note:Registry

• 21.51 (1) The Corporation must establish and maintain a registry containing

  • (a) the names and business addresses of registered issuers;

  • (b) a list of registered programs and information relating to those programs, including the name of each essential service provider to the guarantor entity;

  • (c) a list of registered issuers whose right to issue covered bonds is suspended under subsection 21.62(1) and the reasons for the suspension;

  • (d) any other information that, in the Corporation’s opinion, is necessary; and

  • (e) any prescribed information.

• Marginal note:Accessible to public

  (2) The Corporation must make the registry accessible to the public through the Internet and by any other means that it considers appropriate.

Marginal note:Application for registration of issuers

• 21.52 (1) Any of the following institutions may apply for registration as a registered issuer:

  • (a) a federal financial institution as defined in section 2 of the Bank Act; and

  • (b) a cooperative credit society that is incorporated and regulated by or under an Act of the legislature of a province.

• Marginal note:Requirements

  (2) The applicant must provide the Corporation, in the time, manner and form required by the Corporation, with the required fees and any information that, in the Corporation’s opinion, is required for the purposes of the registration.

Marginal note:Registration of issuers

21.53 The Corporation may register an institution in the registry if

• (a) in the Corporation’s opinion, all of the requirements under this Part have been met; and

• (b) the institution gives an undertaking to not issue any debt obligation that is commonly known as a covered bond except under a registered program.

Marginal note:Application for registration of program

• 21.54 (1) A registered issuer may apply for registration of a program under which covered bonds are to be issued.

• Marginal note:Requirements

  (2) The registered issuer must provide the Corporation, in the time, manner and form required by the Corporation, with the required fees and the information referred to in subsection (3).

• Marginal note:Contents of program

  (3) An application must contain a complete description of the program, including the following information:

  • (a) the name of the entity that will act as the guarantor entity and the type of entity;

  • (b) a description of the loans or other assets to be held as the covered bond collateral and their value;

  • (c) the minimum and maximum ratio required under the program of the value of the covered bonds to be issued to the value of the loans or other assets to be held as covered bond collateral;

  • (d) a description of the contractual relationships between the registered issuer and the entity that will act as the guarantor entity;

  • (e) the names of all essential service providers to the entity that will act as the guarantor entity, a description of the services to be provided and, if a registered issuer or one of its affiliates is acting as a service provider, the circumstances in which it must be replaced;

  • (f) the names of any parties to a derivatives agreement with the entity that will act as the guarantor entity; and

  • (g) any other information that, in the Corporation’s opinion, is required.

Marginal note:Registration of programs

21.55 The Corporation may register the program in the registry if, in the Corporation’s opinion, all of the requirements under this Part have been met.

Marginal note:Application — issuer or program

• 21.56 (1) The Corporation must notify the applicant in writing of its decision with respect to the application to register the applicant or the program.

• Marginal note:Withdrawal of application

  (2) An applicant may withdraw the application for registration by so notifying the Corporation in writing at any time before the day on which the applicant receives notice of the Corporation’s decision.

Marginal note:Deregistration of program

• 21.57 (1) The Corporation may deregister a registered program on the request of the registered issuer only if there are no covered bonds outstanding under the program.

• Marginal note:Deregistration of issuer

  (2) The Corporation may deregister a registered issuer on the request of the issuer only if the issuer has no registered programs.

Marginal note:Conditions and restrictions

21.58 The Corporation may, at any time, establish conditions or restrictions applicable to registered issuers and registered programs.

Marginal note:Fees

• 21.59 (1) The Corporation may establish fees for registration applications under subsection 21.52(1) and subsection 21.54(1) as well as other fees to be paid by registered issuers.

• Marginal note:Limitation

  (2) The fees must be established, in accordance with any regulations, to be commensurate with the costs incurred by the Corporation in exercising its powers and performing its duties and functions under this Part.

Marginal note:Eligible assets

• 21.6 (1) Only the following assets may be held as covered bond collateral:

  • (a) loans made on the security of residential property that is located in Canada and consists of not more than four residential units; or

  • (b) any prescribed assets.

• Marginal note:Substitute assets

  (2) Despite subsection (1), covered bond collateral may include securities that are issued by the Government of Canada and any prescribed assets.

• Marginal note:Maximum ratio

  (3) Unless regulations have been made under paragraph 21.66(g), the value of the assets described in subsection (2) must not exceed 10 per cent of the total value of the loans or other assets held as covered bond collateral.

• Marginal note:Exceptions

  (4) Despite subsections (1) and (2), the following loans must not be held as covered bond collateral:

  • (a) a loan made on the security of residential property if the loan is insured by the Corporation;

  • (b) a loan made on the security of residential property if the loan is insured and that insurance is protected under the Protection of Residential Mortgage or Hypothecary Insurance Act; and

  • (c) a loan made on the security of residential property if the amount of the loan, together with the amount then outstanding of any mortgage or hypothecary loan having an equal or prior claim against the property, exceeds 80 per cent of the value of the property at the time of the loan.