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Money Market Mutual Fund Conditions Regulations (SOR/2001-475)

Regulations are current to 2020-11-17

Money Market Mutual Fund Conditions Regulations

SOR/2001-475

CANADIAN PAYMENTS ACT

Registration 2001-11-01

Money Market Mutual Fund Conditions Regulations

P.C. 2001-2019  2001-11-01

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 35(1)Footnote a of the Canadian Payments ActFootnote b, hereby makes the annexed Money Market Mutual Fund Conditions Regulations.

Interpretation

Marginal note:Definitions

  •  (1) The following definitions apply in these Regulations.

    approved credit rating

    approved credit rating, in respect of a security or instrument of a type described in the heading of column 2 or 3 of the schedule, means a rating that has been issued by an approved credit rating organization set out in column 1 of an item of the schedule and that is at or above the rating category set out for that type of security or instrument in column 2 or 3 of that item, or that is at or above a rating category that the approved credit rating organization has adopted to replace that rating category. (note approuvée)

    approved credit rating organization

    approved credit rating organization means

    • (a) Dominion Bond Rating Service Limited;

    • (b) Fitch, Inc.;

    • (c) Moody’s Investors Service, Inc.;

    • (d) Standard & Poor’s Corporation; or

    • (e) a successor of an organization named in any of paragraphs (a) to (d). (agence de notation agréée)

    Canadian financial institution

    Canadian financial institution means

    • (a) any of the following that is authorized to carry on business under the laws of Canada or a province, namely,

      • (i) a bank,

      • (ii) an authorized foreign bank,

      • (iii) a loan company,

      • (iv) a trust company,

      • (v) an insurance company to which the Insurance Companies Act applies,

      • (vi) an insurance corporation incorporated by or under an Act of the legislature of a province,

      • (vii) a central cooperative credit society,

      • (viii) a cooperative credit association, or

      • (ix) a local cooperative credit society;

    • (b) Alberta Treasury Branches, established under the Alberta Treasury Branches Act of the Province of Alberta; or

    • (c) the Fédération des caisses Desjardins du Québec. (institution financière canadienne)

    cash equivalent

    cash equivalent means an evidence of indebtedness that has a remaining term to maturity of 365 days or less and is issued, or fully and unconditionally guaranteed as to principal and interest

    • (a) by the Government of Canada or the government of a province;

    • (b) by the government of the United States, the government of one of the states of the United States, the government of another sovereign state or a permitted supranational agency, if the evidence of indebtedness has an approved credit rating; or

    • (c) by a Canadian financial institution, or by a financial institution that is not incorporated or organized under the laws of Canada or a province, if the evidences of indebtedness of that issuer or guarantor that are rated as short-term debt by an approved credit rating organization have an approved credit rating. (quasi-espèces)

    permitted supranational agency

    permitted supranational agency means

    • (a) the African Development Bank;

    • (b) the Asian Development Bank;

    • (c) the Caribbean Development Bank;

    • (d) the European Bank for Reconstruction and Development;

    • (e) the Inter-American Development Bank;

    • (f) the International Bank for Reconstruction and Development;

    • (g) the International Finance Corporation; or

    • (h) any person that is prescribed for the purpose of subparagraph (g)(v) of the definition foreign property in subsection 206(1) of the Income Tax Act. (organisme supranational accepté)

  • Marginal note:Approved credit rating

    (2) For the purposes of these Regulations, a security or an instrument is considered to have an approved credit rating only if

    • (a) an approved credit rating organization has issued an approved credit rating for the security or instrument;

    • (b) the approved credit rating organization has not made any announcement that the rating of the security or instrument may be downgraded to a rating category that would not be an approved credit rating; and

    • (c) no approved credit rating organization has rated the security or instrument in a rating category that is not an approved credit rating.

Conditions for Money Market Mutual Funds

Marginal note:Conditions

 A money market mutual fund must satisfy the following conditions:

  • (a) all of its assets must be invested in one or more of the following, namely,

    • (i) cash,

    • (ii) cash equivalents,

    • (iii) evidences of indebtedness, other than cash equivalents, that have remaining terms to maturity of 365 days or less, and

    • (iv) floating rate evidences of indebtedness not referred to in subparagraphs (ii) and (iii), if the principal amounts of the obligations will continue to have a market value of approximately par at the time of each change in the rate to be paid to the holders of the evidences of indebtedness;

  • (b) its portfolio of evidences of indebtedness must have a dollar-weighted average term to maturity not exceeding 90 days, calculated on the basis that the term of a floating rate obligation is the period remaining to the date of the next rate setting;

  • (c) not less than 95% of its assets must be invested in cash, cash equivalents or evidences of indebtedness denominated in a currency in which the net asset value per security of the mutual fund is calculated; and

  • (d) not less than 95% of its assets must be invested in one or more of the following, namely,

    • (i) cash,

    • (ii) cash equivalents, or

    • (iii) evidences of indebtedness of issuers whose commercial paper has an approved credit rating.

Coming into Force

Marginal note:Coming into force

 These Regulations come into force on November 7, 2001.

 
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