Specialized Financing (Foreign Banks) Regulations

Marginal note:Ownership restrictions — foreign banks

• 3 (1) A foreign bank shall not acquire or hold control of, or a substantial investment in, a specialized financing entity if

  • (a) the aggregate balance sheet value of the shares and the ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the foreign bank that it controls, that the following entities hold or would hold in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million, namely,

    • (i) the specialized financing entity,

    • (ii) the specialized financing entities of the foreign bank,

    • (iii) the specialized financing entities of the entities associated with the foreign bank,

    • (iv) the foreign bank, and

    • (v) the entities associated with the foreign bank; or

  • (b) the specialized financing entity controls or holds shares of, or ownership interests in,

    • (i) an entity referred to in any of paragraphs 468(1)(a) to (j) of the Act,

    • (ii) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle,

    • (iii) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property, or

    • (iv) an entity that acts as an insurance broker or agent in Canada.

• Marginal note:13 year limit

  (2) A foreign bank shall not hold control of, or a substantial investment in, a specialized financing entity of the foreign bank if either the specialized financing entity of the foreign bank or the specialized financing entity of the foreign bank and one or more of the following entities, one after another, have held control of, or a substantial investment in, an entity, other than an entity described in subsection (3), for more than 13 consecutive years:

  • (a) the foreign bank;

  • (b) an entity associated with the foreign bank;

  • (c) any other specialized financing entity of the foreign bank; or

  • (d) a specialized financing entity of an entity associated with the foreign bank.

• Marginal note:Exception

  (3) A specialized financing entity of the foreign bank controlled by the specialized financing entity of the foreign bank shall not be considered for the purpose of subsection (2).

• Marginal note:Prior periods not included

  (4) If a specialized financing entity of the foreign bank or an entity referred to in any of paragraphs (2)(a) to (d) held control of, or a substantial investment in, an entity for a period before becoming that entity, that period shall not be considered for the purpose of subsection (2).