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Specialized Financing (Banks) Regulations

Version of section 7 from 2008-05-15 to 2024-02-06:


Marginal note:Limit of 25% of regulatory capital — investment in a specialized financing entity

  •  (1) A bank shall not, by way of specialized financing activities, acquire control of, or hold, acquire or increase a substantial investment in, an entity controlled by a specialized financing entity of the bank or an entity in which the specialized financing entity of the bank holds a substantial investment, if the sum of the following exceeds or would exceed 25% of the bank’s regulatory capital:

    • (a) the aggregate balance sheet value of the shares and ownership interests held by the bank and its subsidiaries, whether individually or jointly, in the specialized financing entity of the bank, in the entities controlled by the specialized financing entity of the bank and in the entities in which that specialized financing entity holds a substantial investment, and

    • (b) the aggregate value of outstanding loans that the bank and its subsidiaries, whether individually or jointly, have made to the specialized financing entity of the bank, to the entities controlled by the specialized financing entity of the bank and to the entities in which that specialized financing entity holds a substantial investment.

  • Marginal note:Limit of 25% of regulatory capital — investment in an entity

    (2) A bank shall not, by way of specialized financing activities, acquire control of, or hold, acquire or increase a substantial investment in, an entity, other than by way of an investment of a specialized financing entity controlled by the bank, if the sum of the following exceeds 25% of the bank’s regulatory capital:

    • (a) the aggregate balance sheet 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 balance sheet value of the shares and ownership interests held by the bank and its subsidiaries, whether individually or jointly, 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, other than entities that the bank has acquired control of, or a substantial investment in, by way of an investment of a specialized financing entity of the bank, and

    • (c) the aggregate value of outstanding loans that the bank and its subsidiaries, whether individually or jointly, have made to the entities controlled by the bank by way of specialized financing activities and to the entities in which the bank holds a substantial investment by way of specialized financing activities, other than entities that the bank has acquired control of, or a substantial investment in, by way of an investment of a specialized financing entity of the bank.

  • SOR/2008-168, s. 2

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