Bill C-38 (the Bill), which was introduced to the Canadian
parliament in June, involves fundamental revision of financial
institutions legislation in Canada. Last month, the new
opportunities to own banks and insurance companies in Canada were
discussed. This month's article addresses the expanded investment
rules for financial institutions, the treatment of foreign banks
and branches, and new regulatory and consumer initiatives in the
Bill.
Investment rules for financial institutions and their
holding companies
Banks, life insurance companies and their holding companies will
be permitted greater flexibility and a broader scope for their
substantial investments - more than 10% of the investment's voting
shares or 25% of its shareholders' equity or ownership interests.
The amendments reflect the government's policy that a bank, life
insurance company, trust company or cooperative credit association
should be permitted to invest in any entity that provides a service
that the institution itself may provide. Therefore, as a general
principle, any activity carried on by...