Bank Act — B-1.01 468
bilities or if the activities of the entity include (a) activities that a bank is not permitted to engage in under any of sections 412, 417 and 418; (b) dealing in securities, except as may be permitted under paragraph (2)(e) or as may be permitted to a bank under paragraph 409(2)(c); (c) activities that a bank is not permitted to engage in under section 416 if the entity engages in the activities of a finance entity or of any other entity as may be prescribed; (d) 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 bank, the bank itself would be permitted under this Part to acquire a substantial investment in the other entity, or (ii) in the case of an entity that is not controlled by the bank, the bank itself would be permitted to acquire a substantial investment in the other entity under subsection (1) or (2), subsection 466(2), paragraph 466(3)(b) or (c) or subsection 466(4); or (e) any prescribed activity. Exception (3.1) Despite paragraph (3)(a), a bank may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied: (a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and (b) if the entity engages in other business, that business is limited to engaging in one or more of the following: (i) the activities of a mutual fund distribution entity, (ii) any activity that a bank is permitted to engage in under paragraph 410(1)(c.2), and (iii) the provision of investment counselling services and portfolio management services. Control (4) Subject to subsection (8) and the regulations, a bank may not acquire control of, or acquire or increase a substantial investment in, (a) an entity referred to in paragraph (1)(a) or (b), unless (i) the bank controls, within the meaning of paragraphs 3(1)(a) and (d), the entity or would thereby acquire control, within the meaning of those paragraphs, of the entity, or (ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment; (b) an entity referred to in any of paragraphs (1)(c) to (j), unless (i) the bank controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or (ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment; (c) an entity whose business includes one or more of the activities referred to in paragraph (2)(a) and that engages, as part of its business, in any financial intermediary activity that exposes the entity to material market or credit risk, including a finance entity, a factoring entity and a financial leasing entity, unless (i) the bank controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, or (ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment; or (d) an entity whose business includes an activity referred to in paragraph (2)(b), including a specialized financing entity, unless (i) the bank controls, within the meaning of paragraph 3(1)(d), the entity, or would thereby acquire control, within the meaning of that paragraph, of the entity, (ii) the bank is permitted by regulations made under paragraph 474(a) to acquire or increase the substantial investment, or (iii) subject to prescribed terms and conditions, if any are prescribed, the activities of the entity do not include the acquisition or holding of control of, or the acquisition or holding of shares or other ownership interests in, an entity referred to in any of paragraphs (a) to (c) or an entity that is not a permitted