Part XII: Acquisition of control of, or a substantial investment in, a limited commercial entity

Document Properties

  • Type of Publication: Transaction Instructions
  • Revised:  October 2017
  • Index A No: 7.4
  • Category: Non Deemed Approval

Legislative Authorities

  • Section 522.09 and paragraph 522.22(1)(g) of the Bank Act (the “Act”).

Information Requirements

The applicant is generally expected to provide:

  1. the name of the applicant, the address of its head office and its jurisdiction of incorporation;

  2. an analysis in support of the applicant’s conclusion that it is required to seek this approval, including an analysis supporting the applicant’s position that it is an entity to which Part XII appliesFootnote 1;

  3. a confirmation that the applicant currently has, or is currently deemed to have, a financial establishment in Canada (together with details in support of the confirmation)Footnote 2;

  4. the name or proposed name of the limited commercial entity (LCE);Footnote 3

  5. a detailed description of the LCE’s current or proposed business activities, including confirmation that:

    1. activities referred to in paragraphs 522.08(1)(a) to (f) of the Act and paragraphs (a) to (h) of the definition “financial services entity”Footnote 4 do not and will not exceed 10% of the business (i.e. total assets or revenues) of the LCE, calculated in accordance with the requirements of section 5 of the Manner of Calculation (Foreign Banks) Regulations,

    2. the LCE is not engaged in, and will not engage in, any leasing activitiesFootnote 5, and

    3. the LCE engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the applicant or an entity associated with the applicant;

  6. details regarding whether the applicant (or the LCE) requires any regulatory approval, other than under the Act, in connection with the transaction or is required to notify any regulator about the transaction, and where any of these requirements apply, information regarding the status of meeting them; and

  7. a description of the transaction that will result in the applicant acquiring control of, or a substantial investment in, the LCE, including the rationale for the transaction.

Administrative Guidance

  1. For further guidance on the concept of “financial establishment in Canada” and other elements of Part XII of the Act, refer to the Advisory No. 2006-01-R1 – Legislative Framework for Foreign Banks.

  2. Where the acquisition will result in more than one person, directly or indirectly, acquiring control of the LCE, any one of those persons may submit the application for approval on behalf of all others.  That person is expected to provide the name, head office address and jurisdiction of incorporation of all persons who will be acquiring control of the LCE.

  3. This approval is subject to a service charge.Footnote 6  A wire transfer, cheque or bank draft should be made payable to the Receiver General for Canada.

  4. The following email address should be used for the initial submission of documents in support of requests for approval(s) that are addressed in this document: Once the initial submission has been received, a case officer will be assigned to the matter. Thereafter, all case-related documents and correspondence should be directed to the case officer.

The information requirements and administrative guidance are intended to satisfy typical applications.  They have been derived from OSFI’s experience in assessing applications.  Applicants who provide all information and material requested can generally expect a more timely assessment of their applications.  As appropriate to the circumstances, OSFI may request additional information, take into account other matters, impose terms and conditions, or require undertakings.


Footnote 1

By virtue of section 508 of the Act.

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Footnote 2

ee subsections 507(15) and (16) of the Act.

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Footnote 3

As defined in subsection 507(1) of the Act.

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Footnote 4

See subsection 507(1) of the Act.

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Footnote 5

As defined in subsection 507(1) of the Act.

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Footnote 6

Please see Charges for Services Provided by the Office of the Superintendent of Financial Institutions Regulations 2002.

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