Specialized Financing (Banks) Regulations

Marginal note:Limit of 10% of regulatory capital

6 A bank shall not, by way of specialized financing activities, acquire control of, or hold, acquire or increase a substantial investment in, an entity if the sum of the following exceeds 10% of the bank’s regulatory capital:

• (a) the aggregate book value of the shares and ownership interests that the bank and its subsidiaries, whether individually or jointly, would acquire in the entity,

• (b) the aggregate value of outstanding loans made by the bank and its subsidiaries, whether individually or jointly, to the specialized financing entities of the bank, and

• (c) the aggregate book value of the shares and ownership interests held by the bank and its subsidiaries, whether individually or jointly, in the specialized financing entities of the bank, in the entities controlled by the bank by way of specialized financing activities, and in the entities in which the bank holds a substantial investment by way of specialized financing activities.