MATERIALITY CRITERIA FOR AN RE OR ITS SUBSIDIARIES TO HOLD SHARES OR OWNERSHIP INTERESTS IN A FRE OR A FRE’S CONTROLLING ENTITY

Document Properties

  • Publication Type: Transaction Instructions
  • Revised: April 2009
  • Index DA No: 3
  • Category: Deemed Approval

Legislative Authorities

Information Requirements

The applicant is generally expected to provide:

  1. details of transaction(s) and a description of shares or ownership interest to be acquiredFootnote 1;

  2. the criteria proposed by Federally Regulated Entity (FRE) for determining nominality or immateriality of shares to be held by way of security interest; and

  3. the impact, if any, of holding shares on regulatory capital of FRE.

Administrative Guidance

  1. An application under any of the legislative authorities:

    1. must, if involving related parties, conform to criteria established for FREs for determining nominality or immateriality of transactions with related parties; and

    2. must be consistent with OSFI capital guidelines and policies where shares to be held by way of security interest are to be afforded capital treatment.

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.

Footnotes

Footnote 1

Please note that an FRE that is either a bank holding company or an insurance holding company is not permitted, except for purposes of cancellation, to hold its own shares, or to hold an ownership interest in its controlling entity.

Return to footnote 1 referrer