Minority Investment (Banks) Regulations

Marginal note:Restriction concerning investments

3 Subject to sections 5 and 6, a bank must not acquire or increase a substantial investment in a designated entity under paragraph 2(a) or give up control of the designated entity while keeping a substantial investment in it under paragraph 2(b) if, after the acquisition, increase or giving up of control, the total value of the following would exceed 50% of the bank’s regulatory capital:

• (a) all shares, membership shares and ownership interests beneficially owned by the bank, and all shares, membership shares and ownership interests beneficially owned by entities controlled by the bank, in designated entities in which the bank has a substantial investment but over which it does not exercise control,

• (b) all loans held by the bank, and all loans held by entities controlled by the bank, that were made to designated entities in which the bank has a substantial investment but over which it does not exercise control, and

• (c) all outstanding guarantees given by the bank, and all outstanding guarantees given by entities controlled by the bank, on behalf of designated entities in which the bank has a substantial investment but over which it does not exercise control.