SOR/2003-6920032

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20196

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TRUST AND LOAN COMPANIES ACTInformation Technology Activities (Trust and Loan Companies) RegulationsP.C. 2003-18920032

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Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 459a and 531b of the Trust and Loan Companies Actc, hereby makes the annexed Information Technology Activities (Trust and Loan Companies) Regulations.aS.C. 2001, c. 9, s. 550bS.C. 2001, c. 9, s. 569cS.C. 1991, c. 45Interpretation

Definitions1The following definitions apply in these Regulations.Act  means the Trust and Loan Companies Act. (Loi)balance sheet value, in respect of the shares and ownership interests held by an entity, means the value reported on its balance sheet on an unconsolidated basis. (valeur au bilan)book value[Repealed, SOR/2008-168, s. 29]member of a company’s group has the same meaning as in subsection 449(2) of the Act. ( membre du groupe d’une société)SOR/2008-168, s. 29

Prescribed Purpose or Circumstance

Prescribed purpose or circumstance2For the purposes of subparagraph 410(1)(c.1)(iii) of the Act and subject to the approval required under paragraph 410(1)(c.1) of the Act, a company may develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used for a purpose or in a circumstance that is materially related to the provision of financial products or services by the company or a member of the company’s group.

Investments

Prescribed activity3(1)For the purposes of paragraph 453(2)(f) of the Act and subject to subsections (2) and (3), a prescribed activity in relation to an 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.Limit on size of investment(2)A company may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the sum of the following exceeds 5% of the company’s regulatory capital:(a)the aggregate balance sheet value of the shares and ownership interests that the company and its subsidiaries, whether individually or jointly, would acquire in the entity under paragraph 453(2)(f) of the Act,(b)the aggregate balance sheet value of the shares and ownership interests held by the company and its subsidiaries, whether individually or jointly, in entities engaging in an activity described in subsection (1) that the company holds control of, or a substantial investment in, under paragraph 453(2)(f) of the Act, and(c)the aggregate value of outstanding loans made by the company and its subsidiaries, whether individually or jointly, to entities engaging in an activity described in subsection (1) that the company holds control of, or a substantial investment in, under paragraph 453(2)(f) of the Act.Restricted activities(3)A company may not acquire control of, or hold, acquire or increase a substantial investment in, an entity engaging in an activity described in subsection (1) if the entity engages in the business of accepting deposit liabilities or if the activities of the entity include(a)activities that a company is not permitted to engage in under any of sections 417 and 418 of the Act;(b)dealing in securities, except as may be permitted under paragraph 453(2)(e) of the Act or as may be permitted to a company under paragraph 409(2)(c) of the Act;(c)dealing in goods, wares or merchandise that a company is not permitted to deal in under subsection 410(2) of the Act, other than as permitted under subsection (1);(d)acting as an executor, administrator or official guardian or as a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person;(e)being a trustee for a trust;(f)activities that a company is not permitted to engage in under section 416 of the Act if the entity engages in the activities of a finance entity or of any other entity prescribed under paragraph 453(3)(e) of the Act;(g)acquiring control of or acquiring or holding a substantial investment in another entity unless(i)in the case of an entity that is controlled by the company, the company itself would be permitted under Part IX of the Act to acquire a substantial investment in the other entity, or(ii)in the case of an entity that is not controlled by the company, the company itself would be permitted to acquire a substantial investment in the other entity under subsection 451(2), paragraph 451(3)(b) or (c) or subsection 451(4) or 453(1) or (2) of the Act; or(h)any activity prescribed under paragraph 453(3)(g) of the Act.SOR/2008-168, s. 30

Exemption from Restrictions on Investments

Exemption from restrictions4For the purposes of subparagraph 3(3)(g)(ii), subsections 453(4) to (6) of the Act do not apply in determining whether a company would be permitted to acquire a substantial investment in an entity under subsection 451(2), paragraph 451(3)(b) or (c) or subsection 451(4) or 453(1) or (2) of the Act.

Non-application of Subsection 453(5) of the Act

Non-application5Subsection 453(5) of the Act does not apply where, under paragraph 453(2)(f) of the Act, a company acquires control of, or acquires or increases a substantial investment in, an entity whose business is limited to activities described in subsection 3(1). Nothing in this section limits the operation of subsections 3(2) and (3).

Coming into Force

Coming into force6These Regulations come into force on the day on which they are registered.