Income Tax Act — I-3.3 (a)
excluded property , at any time for a trust governed by a registered plan, means (a) property described in paragraph 4900(1)(j.1) of the Income Tax Regulations; (b) an equity of a mutual fund corporation, mutual fund trust or registered investment if (i) either (A) the equity is equity of a mutual fund corporation or mutual fund trust that derives all or substantially all its value from one or more mutual funds that are subject to, and substantially comply with, the requirements of National Instrument 81–102 Mutual Funds , as amended from time to time, of the Canadian Securities Administrators, or (B) the corporation, trust or registered investment follows a reasonable policy of investment diversification, (ii) the time is (A) during the 24-month period that begins on the day on which the first taxation year of the corporation, trust or registered investment begins, (B) during the 24-month period that ends on the day on which the last taxation year of the corporation, trust or registered investment ends, or (C) where the equity is a share of the capital stock of a mutual fund corporation and the share derives all or substantially all its value from a particular mutual fund, (I) during the 24-month period that begins on the day on which the particular mutual fund is established, or (II) during the 24-month period that ends on the day on which the particular mutual fund is terminated, (iii) it is reasonable to conclude that none of the main purposes of the structure of the corporation, trust or registered investment, or of the terms and conditions of the equity, is to accommodate transactions or events that could affect the fair market value of the property held by the trust governed by the registered plan in a manner that would not occur in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and (iv) it is reasonable to conclude that none of the main purposes of the incorporation, establishment or operation of the corporation, trust or registered investment, or of the particular mutual fund, is to benefit from this paragraph; or (c) equity of a corporation, partnership or trust (in this paragraph referred to as the “investment entity”) if at that time (i) the fair market value of the equity (in this paragraph referred to as the “arm’s length equity”) of the investment entity that is owned by persons who deal at arm’s length with the controlling individual of the registered plan is at least 90% of the fair market value of all the equity of the investment entity, (ii) the total fair market value of the arm’s length equity and the debt of the investment entity that is owned by persons who deal at arm’s length with the controlling individual is at least 90% of the total fair market value of all the equity and debt of the investment entity, (iii) the controlling individual, either alone or together with persons with whom the controlling individual does not deal at arm’s length, does not have the right to cast at least 10% of the votes, if any, that could be cast regarding the governance of the investment entity, (iv) the specific terms and conditions of each share or unit of equity of the investment entity held by the trust governed by the registered plan are the same as, or substantially similar to, the terms and conditions of particular equity that is included in the arm’s length equity, (v) the fair market value of the particular equity referred to in subparagraph (iv) is equal to at least 10% of the total fair market value of all equity of the investment entity having the specific terms and conditions referred to in subparagraph (iv) or terms and conditions that are substantially similar to those terms and conditions, (vi) the controlling individual deals at arm’s length with the investment entity, and (vii) it is reasonable to conclude that none of the main purposes of the structure of the investment entity, or of the terms and condition