Information Technology Activities (Foreign Banks) Regulations

Marginal note:Prescribed activity

• 2 (1) For the purposes of paragraph 522.08(1)(f) of the Act and subject to subsections (2) to (4), a prescribed activity in relation to a Canadian entity is developing, designing, holding, managing, manufacturing, selling or otherwise dealing with any data transmission system, information site, communication device or information platform or portal that is used to provide information services.

• Marginal note:Limit on size of investment — foreign bank

  (2) A foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity described in subsection (1) if the sum of the following exceeds the lesser of 5% of the foreign bank’s regulatory capital and $1 billion:

  • (a) the aggregate balance sheet value of the shares and ownership interests that the foreign bank would acquire in the Canadian entity under paragraph 522.08(1)(f) of the Act;

  • (b) the aggregate balance sheet value of the shares and ownership interests held, whether individually or jointly, by the foreign bank and the entities associated with the foreign bank in Canadian entities engaging in an activity described in subsection (1) that the foreign bank or any entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act; and

  • (c) the aggregate value of outstanding loans made by the foreign bank and the entities associated with the foreign bank, whether individually or jointly, to Canadian entities engaging in an activity described in subsection (1) that the foreign bank or any entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act.

• Marginal note:Limit on size of investment — entity associated with a foreign bank

  (3) An entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity described in subsection (1) if the sum of the following exceeds the lesser of 5% of the foreign bank’s regulatory capital and $1 billion:

  • (a) the aggregate balance sheet value of the shares and ownership interests that the entity associated with the foreign bank would acquire in the Canadian entity under paragraph 522.08(1)(f) of the Act;

  • (b) the aggregate balance sheet value of the shares and ownership interests held, whether individually or jointly, by the entity associated with the foreign bank, the foreign bank and any other entity associated with the foreign bank in Canadian entities engaging in an activity described in subsection (1) that the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act; and

  • (c) the aggregate value of outstanding loans made by the entity associated with the foreign bank, the foreign bank and any other entity associated with the foreign bank, whether individually or jointly, to Canadian entities engaging in an activity described in subsection (1) that the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank holds control of, or a substantial investment in, under paragraph 522.08(1)(f) of the Act.

• Marginal note:Restricted activities

  (4) A foreign bank or an entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity engaging in an activity described in subsection (1) if the activities of the Canadian entity include

  • (a) activities that a bank is not permitted to engage in under any of sections 412, 417 and 418 of the Act;

  • (b) dealing in securities, except as may be permitted under paragraph 522.08(1)(e) of the Act or as may be permitted to a bank under paragraph 409(2)(c) of the Act;

  • (c) dealing in goods, wares or merchandise that a bank is not permitted to deal in under subsection 410(2) of the Act, other than as permitted under subsection (1);

  • (d) activities that a bank is not permitted to engage in under section 416 of the Act if the Canadian entity engages in the activities of a finance entity or of any other entity prescribed under paragraph 522.08(2)(c) of the Act;

  • (e) acquiring or holding control of, or a substantial investment in, another Canadian entity unless

    • (i) in the case of a Canadian entity that is controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under section 522.07, 522.08 or 522.1 or Division 8 of Part XII of the Act, or

    • (ii) in the case of a Canadian entity that is not controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under section 522.07 or 522.08, any of paragraphs 522.1(a) or (c) to (e) or Division 8 of Part XII of the Act; or

  • (f) any activity prescribed under paragraph 522.08(2)(e) of the Act.