Entity Associated with a Foreign Bank Regulations

Marginal note:Exemption from associated status

2 For the purpose of the application of any provision of the Act that would otherwise apply to an entity associated with a foreign bank, the following classes of entities associated with a foreign bank are exempted from the status of being associated with a foreign bank:

• (a) entities each of which is the government of a foreign country, or of any political subdivision of a foreign country, that does not in Canada carry on a business that includes any of the activities referred to in paragraphs (a) to (g) of the definition “financial services entity” in subsection 507(1) of the Act;

• (b) entities each of which is controlled by the government of a foreign country, or of any political subdivision of a foreign country, and that

  • (i) is not a foreign bank,

  • (ii) is not controlled by a foreign bank,

  • (iii) does not engage in Canada in any of the activities referred to in paragraphs (a) to (h) of the definition “financial services entity” in subsection 507(1) of the Act, and

  • (iv) has not been deemed under subsection 507(3) of the Act to be associated with a foreign bank;

• (c) entities each of which is an entity that

  • (i) is associated with a foreign bank only because the entity controls the foreign bank, and

  • (ii) is an entity described in paragraphs 468(1)(a) to (f) of the Act;

• (d) entities each of which is an entity that is controlled by an entity exempted under paragraph (c) and that

  • (i) is not a foreign bank described in paragraph 508(1)(a) of the Act, or

  • (ii) is not controlled by a foreign bank described in paragraph 508(1)(a) of the Act;

• (e) entities each of which is a Canadian entity that

  • (i) is not described in paragraph (c) or (d),

  • (ii) is an entity associated with a foreign bank only because it controls the foreign bank, except where the foreign bank is described in paragraph 508(1)(a) of the Act and either the foreign bank or an entity controlled by it

    • (A) engages in or carries on business in Canada, otherwise than by holding, managing or otherwise dealing with real property,

    • (B) maintains a branch in Canada, other than an office referred to in section 522 of the Act,

    • (C) establishes, maintains or acquires for use in Canada an automated banking machine, a remote service unit or a similar automated service, or, in Canada, accepts data from such a machine, unit or service other than in circumstances described in section 511 or 512 of the Act,

    • (D) acquires or holds control of, or a substantial investment in, a Canadian entity, or

    • (E) acquires or holds any share or ownership interest in a Canadian entity that

      • (I) an entity associated with the foreign bank holds control of, or a substantial investment in, or

      • (II) the foreign bank, an entity associated with the foreign bank and one or more other entities associated with the foreign bank would, if they were one person, hold control of, or a substantial investment in, and

  • (iii) has not been deemed under subsection 507(3) of the Act to be associated with a foreign bank; and

• (f) entities each of which is an entity that is controlled by a Canadian entity exempted under paragraph (e) and

  • (i) is not a foreign bank described in paragraph 508(1)(a) of the Act, or

  • (ii) is not controlled by a foreign bank described in paragraph 508(1)(a) of the Act.