jswizzle3737/ontario_laws_and_regs huggingface dataset:
Recognition of Fee Income
67. (1) When a loan, mortgage or lease is renegotiated because of adverse circumstances of the debtor, mortgagor or lessee, or is otherwise restructured, any unamortized fees from the original loan, mortgage or lease shall be treated as loan fees for the renegotiated transaction. (2) If proceedings for foreclosure or under a power of sale in a mortgage are begun, any unamortized loan fees for the mortgage shall be netted against the outstanding balance of the mortgage. R.R.O. 1990, Reg. 733, s. 67.
Recognition of Fee Income
68. In any transaction in which a corporation acquires an asset, any fee received by the corporation from the vendor to complete the transaction shall be recorded as an adjustment to the purchase price of the asset. R.R.O. 1990, Reg. 733, s. 68. Troubled Loan Refinancing or Restructuring
Troubled Loan Refinancing or Restructuring
69. For the purposes of sections 70 to 75, a troubled loan refinancing or restructuring occurs when a corporation, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. R.R.O. 1990, Reg. 733, s. 69.
Troubled Loan Refinancing or Restructuring
70. (1) The amount of any loss resulting from a troubled loan refinancing or restructuring in which only the repayment terms of the loan are modified shall be determined by calculating the discounted value of the total future cash receipts for the loan under the modified terms, and subtracting that amount from the discounted value of the total future cash receipts for the loan under the original terms. (2) A loss determined under subsection (1) must be recorded as a loss in the income accounts at the time of the refinancing or restructuring and the book value of the loan adjusted accordingly. R.R.O. 1990, Reg. 733, s. 70.
Troubled Loan Refinancing or Restructuring
71. (1) If the discounted value of the total cash receipts for a loan under a troubled loan refinancing or restructuring is greater than the discounted value of the total cash receipts for the original loan, interest income for the refinanced or restructured loan shall be calculated in accordance with the effective interest rate determined under subsection (2). (2) For the purpose of subsection (1), the effective interest rate for the refinanced or restructured loan is the discount rate that equates the present value of future cash receipts under the refinanced or restructured loan with the amount of the recorded investment. R.R.O. 1990, Reg. 733, s. 71.
Troubled Loan Refinancing or Restructuring
72. (1) Any payment for a loan following a troubled loan refinancing or restructuring that is received, (a) within six months after the refinancing or restructuring, if the payment is collectible monthly; or (b) within one year after the refinancing or restructuring, if the payment is collectible other than monthly, shall be applied in reduction of the outstanding principal amount of the loan, and shall not be attributed to interest income. (2) After subsection (1) ceases to apply, interest income may be recorded at the effective interest rate of the loan, which is deemed to be the discount rate that equates the present value of the future cash receipts under the terms of the refinancing or restructuring with the amount of the outstanding principal. R.R.O. 1990, Reg. 733, s. 72.
Troubled Loan Refinancing or Restructuring
73. (1) If a troubled loan refinancing or restructuring involves the partial repayment of the loan by way of consideration other than cash and modifies the repayment terms of the loan, (a) the fair market value of the non-cash consideration must be determined and accounted for as a partial repayment of the loan; and (b) any loss resulting from the refinancing or restructuring shall be calculated in accordance with section 69. (2) For the purposes of subsection (1), no value shall be ascribed to any contingent consideration receivable such as rights to future profit participations. (3) No amount payable to the corporation as contingent consideration may be recognized as interest or other income until it is received. R.R.O. 1990, Reg. 733, s. 73.
Troubled Loan Refinancing or Restructuring
74. All legal fees and other costs incurred with respect to a troubled loan refinancing or restructuring shall be expensed as they are incurred. R.R.O. 1990, Reg. 733, s. 74.
Troubled Loan Refinancing or Restructuring
75. (1) All fees received by a corporation in respect of a troubled loan refinancing or restructuring shall be treated as deferred income until the loan is paid in full. (2) Despite subsection (1), if, under a troubled loan restructuring or refinancing, the borrower provides additional security having a market value at least equal to 50 per cent of the value of the security given under the original loan, the fees received by the corporation in respect of the refinancing or restructuring shall be accounted for as set out in sections 57 to 68. R.R.O. 1990, Reg. 733, s. 75. Favourable Rate Financing
Favourable Rate Financing
76. (1) This section applies in respect of a loan made by a corporation to a third party, (a) at an interest rate that is more than two percentage points below the corporation’s normal lending rate for comparable loans with similar collection risks; and (b) in connection with the disposition of real estate acquired by the corporation through a mortgage foreclosure or a loan restructuring. (2) The amount of the discount on a loan described in subsection (1) is the difference between, (a) the discounted value of the total future cash receipts for the loan, calculated using the corporation’s normal lending rate for comparable loans with similar collection risks in lieu of the contractual interest rate for the loan; and (b) the discounted value of the total future cash receipts for the loan at the contractual interest rate. (3) A discount on a loan determined under subsection (2) must be recorded as a loss in the income accounts at the time the loan is made and the book value of the loan adjusted accordingly. R.R.O. 1990, Reg. 733, s. 76. Provision for Losses
Provision for Losses
77. (1) Any accumulation for known, probable and possible losses shall be deducted from the applicable asset. (2) No sum in addition to provisions for known, probable and possible losses and bookable contingencies may be appropriated. (3) Any addition to an accumulation for known, probable and possible losses shall be created by a charge to the income accounts. R.R.O. 1990, Reg. 733, s. 77.
Provision for Losses
78. A loss of any nature shall be included in the income accounts when the loss is incurred. R.R.O. 1990, Reg. 733, s. 78. PART IX   TOTAL ASSETS
Provision for Losses
79. Subject to section 80, for the purpose of the definition of “total assets” in the Act, the assets of a registered corporation are calculated by, (a) adding the book value of all assets of the registered corporation; (b) subtracting from the amount determined in clause (a), (i) the book value of goodwill and other intangible assets including copyrights and patents, (ii) the book value of deferred charges, and (iii) the amount, if any, that is the excess of the aggregate book value over the aggregate market value of all assets that are securities and debt obligations issued or guaranteed by any government, including a municipal government, or by any government agency. R.R.O. 1990, Reg. 733, s. 79.
Provision for Losses
80. For the purposes of section 79, (a) provisions or allowances for losses of a general nature must be deducted from the most closely applicable class of assets; (b) cash deposits in financial institutions must be offset against overdrafts with financial institutions; (c) the equity method of accounting must be used when calculating the corporation’s investment in the shares of a subsidiary; (d) assets administered for estates, trusts and agencies must not be included in the calculation of total assets; and (e) the book value of an asset is the cost or amortized cost of the asset less accumulated depreciation, provisions or allowances for losses and received but unearned interest. R.R.O. 1990, Reg. 733, s. 80. PART X   SELF DEALING
Provision for Losses
81. For the purposes of clause 142 (1) (h) of the Act, a provincial corporation may enter into a transaction to sell or redeem its own subordinated indebtedness and its own shares to or from a restricted party. R.R.O. 1990, Reg. 733, s. 81; O. Reg. 413/97, s. 11.
Provision for Losses
82. For the purposes of clause 142 (3) (d) of the Act and subject to Part X of the Act, a provincial corporation or a subsidiary of a provincial corporation may enter into sales and purchases to or from a restricted party of, (a) treasury bills issued by the Government of Canada or the government of any province; (b) mortgage loans that are insured by the Canada Mortgage and Housing Corporation or Mortgage Insurance Corporation of Canada that are not in default; (c) bonds issued or guaranteed by the Government of Canada or the government of any province; and (d) certificates or notes issued or guaranteed by a financial institution that is not a restricted party of the provincial corporation, that are issued in Canada and have a term to maturity when issued of one year or less but not including stocks, bonds or subordinated debentures, that are undertaken at readily identifiable prevailing market rates if the instruments are transferable. R.R.O. 1990, Reg. 733, s. 82; O. Reg. 413/97, s. 12. PART XI   CLASSES OF ASSETS
Provision for Losses
83. Revoked: O. Reg. 413/97, s. 13.
Provision for Losses
84. A provincial corporation may not invest more than an amount equal to the proceeds of its borrowings raised outside Canada plus 5 per cent of its total assets in, (a) bonds, debentures or other forms of indebtedness of a body corporate incorporated outside of Canada; (b) shares of a body corporate incorporated outside of Canada unless the shares are listed on a recognized Canadian stock exchange; (c) real estate located outside of Canada; (d) loans on the security of real estate or leaseholds outside Canada; and (e) mutual fund shares or units that are traded only by dealers who are not registered with a securities commission in Canada. R.R.O. 1990, Reg. 733, s. 84; O. Reg. 413/97, s. 14. PART XI.1   PLEDGING ASSETS
Provision for Losses
84.1 For the purpose of subsection 159 (2) of the Act, a provincial corporation may pledge assets to the persons and with respect to the transactions described in this Part. O. Reg. 186/94, s. 1; O. Reg. 413/97, s. 14.
Provision for Losses
84.2 (1) A provincial corporation that is participating in services provided by CDS may pledge any of its assets to CDS, to another person who is participating in those services and to the Bank of Canada. O. Reg. 186/94, s. 1; O. Reg. 413/97, s. 14. (2) The pledge of assets, other than a pledge to the Bank of Canada, must be made in accordance with, (a) an agreement between the provincial corporation and CDS relating to the services; and (b) the rules established by CDS with respect to the services. O. Reg. 186/94, s. 1; O. Reg. 413/97, s. 14. (3) A provincial corporation shall provide written notice to the Superintendent seven days before entering into or amending an agreement with CDS relating to services provided by CDS. O. Reg. 186/94, s. 1; O. Reg. 413/97, s. 14. (4) In this section, “CDS” means The Canadian Depository for Securities Limited, incorporated under the Canada Business Corporations Act and designated as a recognized clearing agency by the Ontario Securities Commission under section 22 of the Securities Act and subsection 53 (1) of the Business Corporations Act. O. Reg. 186/94, s. 1. PART XII   LIQUIDITY
Provision for Losses
85. For the purposes of section 160 of the Act, (a) a provincial corporation shall maintain its liquid assets unencumbered in any of the forms described in section 86; and (b) a provincial corporation shall maintain liquid assets in the minimum amount of 20 per cent of the total amount of deposits and obligations of the provincial corporation that are payable in 100 days or less. O. Reg. 413/97, s. 15.
Provision for Losses
86. The total amount of liquid assets maintained by a provincial corporation shall be the amount which is the aggregate of the following amounts for the corporation: 1. The amount by which the aggregate of cash on hand and demand deposits in banks, registered corporations and, if approved by the Superintendent, other depositories, exceeds the aggregate of, i. overdrafts by the provincial corporation as shown in the accounting records, and ii. debt obligations owed to banks, registered corporations and other lending institutions excluding the Bank of Canada that are, A. repayable or callable at the option of the lender on demand or have a term to maturity when issued of seven days or less, and B. borrowed to enable the provincial corporation to meet its short term requirements for liquid funds. 2. Treasury bills of Canada or a province, at book value. 3. Banker’s acceptances with a remaining term to maturity of one year or less, at book value. 4. Term deposits, bearer deposit notes and similar instruments issued by banks, registered corporations and, if approved by the Superintendent, other depositories, that in each case either are callable on demand or mature within 100 days, at book value. 5. Bonds, debentures or other evidence of indebtedness that are issued or guaranteed by, or in respect of which the debt service is guaranteed by the Government of Canada, or the government of a province or a municipality, at market value. 6. Demand loans that are fully secured by assets of the classes specified in paragraphs 2 to 5 made to brokers, investment dealers and securities dealers registered in Canada, at book value. 7. Accrued interest due and receivable on the assets referred to in paragraphs 1 to 6. O. Reg. 413/97, s. 16.
Provision for Losses
87. The total amount of deposits and obligations of the provincial corporation that are payable in 100 days or less shall be the amount which is the aggregate of the following amounts for the corporation: 1. Demand deposits and savings accounts. 2. Deposits, debentures, certificates and similar instruments issued for a specified term but callable on demand at the holder’s option. 3. All other deposits, debentures, certificates and similar instruments coming due in 100 days or less, or on notice of 100 days or less. 4. Borrowings, other than those included in paragraphs 1 to 3, from banks and other lending institutions coming due in 100 days or less or repayable at the option of the lender within 100 days, other than the indebtedness referred to in subparagraphs (i) and (ii) of paragraph 1 of section 86. 5. Accrued interest on all liabilities due and payable within 100 days or less. O. Reg. 413/97, s. 16.
Provision for Losses
88. Revoked: O. Reg. 413/97, s. 16. PART XIII   SUBORDINATED INDEBTEDNESS
Provision for Losses
89. (1) For the purposes of the Act,  “subordinated indebtedness” means an instrument evidencing an indebtedness of a provincial corporation that by its terms provides that the indebtedness will, in the event of the insolvency or winding up of the corporation, be subordinate in right of payment to all deposit liabilities of the corporation and all other liabilities of the corporation except those that, by their terms, rank equally with or are subordinate to the indebtedness. (2) All subordinated indebtedness issued by a provincial corporation shall provide, (a) that the redemption or payment of the subordinated indebtedness at maturity, upon default or otherwise, will be suspended if there are reasonable grounds to believe that, (i) the corporation is, or after the redemption or payment would be, unable to pay its liabilities as they become due, (ii) after the redemption or payment, the realizable value of the corporation’s assets would be less than the aggregate of its liabilities, or (iii) the redemption or payment would cause the corporation to be in contravention of the Act or the regulations; (b) that, except in the event of the insolvency, bankruptcy or winding up of the corporation, the subordinated indebtedness will not be redeemed, paid or otherwise compromised by the corporation except on not less than 30 days written notice to the Superintendent by the corporation, a holder of the subordinated indebtedness or a trustee for the holders of the subordinated indebtedness; and (c) for a fixed maturity date. (3) Clause (2) (a) does not apply to an issue of subordinated indebtedness if, (a) not more than 10 per cent of the principal amount of the subordinated indebtedness is issued to and beneficially owned at the time of issue by one or more affiliates of the corporation, other than a securities dealer affiliate which acquires the subordinated indebtedness with a view to selling the subordinated indebtedness; (b) the subordinated indebtedness does not contain a special restrictive covenant or default clause which would allow the holder of the subordinated indebtedness in the event of the breach of the covenant or clause to require the corporation to accelerate the repayment of the subordinated indebtedness in circumstances other than the insolvency, bankruptcy or winding up of the corporation; and (c) the provincial corporation has delivered written notice to the Superintendent that the subordinated indebtedness is to be issued subject to this subsection. (4) On application to the Superintendent by the provincial corporation, a holder of the subordinated indebtedness or a trustee for the holders of the subordinated indebtedness, the period of the notice referred to in clause (2) (b) may be reduced by the Superintendent. O. Reg. 413/97, s. 17.
Provision for Losses
90. (1) Every instrument evidencing subordinated indebtedness issued by a provincial corporation shall include, (a) the terms of its subordination; (b) all restrictions applicable on redemption or payment of the subordinated indebtedness; and (c) a disclosure that the subordinated indebtedness is not a deposit of the issuing corporation and is not insured by the Canada Deposit Insurance Corporation or, if appropriate, any similar public agency. (2) No person shall, in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a provincial corporation, refer to the subordinated indebtedness otherwise than as subordinated indebtedness. O. Reg. 413/97, s. 17. PART XIV   COMMON TRUST FUNDS Common Trust Funds
Common Trust Funds
91. In this Part, “Fund” means a common trust fund; “investments” means bonds, debentures, guaranteed investment certificates, shares, warrants, rights to subscribe for or purchase shares, any title to or interest in the capital assets, property, profits, earnings or royalties of any undertaking or enterprise commonly evidenced by a certificate or a similar document or depository receipt; “participant” means any trust or estate the money of which has been invested in the Fund; “participation” means the interest of any participant in a Fund. R.R.O. 1990, Reg. 733, s. 91.
Common Trust Funds
92. (1) A Fund may not be established unless there is trust money therein aggregating at least $200,000 and unless a written plan of operation for the Fund complying with this section has been submitted to the Superintendent at least thirty days before the start of operation. (2) The Fund shall be maintained in accordance with the plan of operation and any amendment thereto must be filed with the Superintendent at least thirty days before it takes effect. (3) The plan of operation must set out the manner in which the Fund is to be operated and contain provisions as to, (a) the particulars of investment powers and restrictions of the Fund; (b) the computation and allocation of income and the distribution thereof; (c) the allocation of the profits and losses of the Fund; (d) the conditions governing admissions of trust money to and withdrawals of participations from the Fund; (e) the original unit of participation; (f) the form of documentation to be used as evidence of participation; (g) the auditing and settlement of accounts of the trust corporation with respect to the Fund; (h) the basis and method of valuing the assets of the Fund; (i) the basis upon which the Fund may be terminated; (j) the method by which the plan of operation may be amended; and (k) such other matters as may be necessary to define clearly the rights of participants. (4) The plan of operation must provide that it is subject to all applicable laws of the Province of Ontario pertaining to the operation of common trust funds. (5) The plan of operation must provide for, (a) the amortization of premiums and discounts on bonds or other obligations; and (b) the allocation of profits and losses and the apportionment thereof between principal and income. R.R.O. 1990, Reg. 733, s. 92. Units of Participation
Units of Participation
93. (1) A Fund shall be divided into units of equal value, and the proportionate interest of each participant is expressed by the number of such units allocated to it. (2) Upon the establishment of a Fund, a trust corporation shall divide the Fund into units of $5 or any multiple of $5, and allocate to each participant the number of units proportionate to its original investment in the Fund. (3) When additional money is admitted to the Fund, the amount so admitted must be equal to the then value of one or more of the units of the Fund, and the number of units increased accordingly. (4) Each unit of participation must have a proportionately equal beneficial interest in the Fund, and none may have priority or preference over any other. R.R.O. 1990, Reg. 733, s. 93.
Units of Participation
94. (1) No money from any participant may be accepted by a Fund if as a result the participant would have an interest in the Fund in excess of 10 per cent of the book value of the assets of the Fund. (2) In applying the limitation contained in this section, if two or more trusts are created by the same settlor or settlors and as much as one-half of the income or principal or both of each trust is payable or applicable to the use of the same person or persons, the trusts shall be treated as one. R.R.O. 1990, Reg. 733, s. 94. Management and Ownership of Assets in a Fund
Management and Ownership of Assets in a Fund
95. (1) A trust corporation has exclusive management and control of any Fund that it maintains. (2) No participant and no person having an interest in a participant may have individual ownership of any particular assets in a Fund. (3) All the assets of a Fund are at all times considered to be assets held in trust by the trust corporation, and title thereto is vested solely in the trust corporation as trustee. R.R.O. 1990, Reg. 733, s. 95. Admissions and Withdrawals of Participations
Admissions and Withdrawals of Participations
96. (1) No trust money may be admitted to and no participation may be withdrawn from a Fund except on the basis of the trust corporation’s valuation of the Fund and except as of a valuation date. (2) The value of the Fund and its units shall be determined within ten business days following the valuation date. (3) When a participation or any part thereof is withdrawn from a Fund, the amount withdrawn may, in the discretion of the trust corporation, be paid in cash or rateably in kind, or partly in cash and partly rateably in kind, but all payments or transfers as of any one valuation date must be made on the same basis. R.R.O. 1990, Reg. 733, s. 96 (1-3). (4) Revoked: O. Reg. 413/97, s. 18. (5) If, because of a change in circumstances, an investment held by a Fund does not continue to meet the eligibility criteria under the plan of operation of the Fund for a new investment, and the state of ineligibility continues for a period of six months, no admission to or withdrawal from the Fund may be made except as set out in subsection (6). (6) Admission to and withdrawal from a Fund in the circumstances set out in subsection (5) may be made, (a) when, because of a change in circumstances, the investment again meets the eligibility criteria under the plan of operation of the Fund for a new investment; or (b) when the investment is eliminated from the Fund by means of, (i) sale, (ii) distribution in kind to participants, or (iii) segregation in a liquidation account for the benefit rateably of all the participants in the Fund on the date of the segregation. (7) No participation may be withdrawn in part only unless the amount so withdrawn is equal to the value of one or more full units at the time of the withdrawal. R.R.O. 1990, Reg. 733, s. 96 (5-7). Participation Register
Participation Register
97. A register must be maintained for each fund during the existence of the Fund and for a period of six years after its termination showing with respect to each participant, (a) the date of each admission of trust money to the Fund, the number of units allotted and the value at which each unit is allocated; (b) the date of each withdrawal, the number of units redeemed and the amount paid on redemption to the participant; (c) the number of units currently held; and (d) the share in any liquidating account. R.R.O. 1990, Reg. 733, s. 97. Participation Certificates
Participation Certificates
98. Participations in a Fund may be evidenced by certificates, but no trust corporation maintaining a Fund may issue any document evidencing a direct or indirect interest therein in any form that purports to be negotiable or assignable. R.R.O. 1990, Reg. 733, s. 98.
Participation Certificates
99. (1) Not less frequently than once during each period of three months, every trust corporation must determine the value of each Fund that it maintains and of the units of participation thereof. (2) The investments held by a Fund shall be valued as set out in subsections (3) to (10). (3) A share that is listed on any stock exchange shall be valued at its closing sale price on the valuation date or, if there is no sale price for the share on the valuation date, at the more recent of, (a) the average of the most recent bid and asked prices for the share; and (b) the most recent sale price published for the share. (4) Despite subsection (3), if, in the opinion of the trust corporation, the value of a share that is determined under subsection (3) does not fairly indicate its market value, the trust corporation shall obtain from two members of a stock exchange a written estimate of the value of the share as of the valuation date, and the value of the share shall be deemed to be the average of the two estimates. (5) An investment, other than a mortgage, that is not listed on any stock exchange shall be valued as of the valuation date, (a) if bid and asked prices for the investment have been available to the public within sixty days before the valuation date, at the average of the most recent available bid and asked prices; or (b) at the average of the most recent available quotations of the price of the investment by two recognized dealers in the securities. (6) For the purposes of subsections (3) and (5), the sale price, bid and asked prices, and over-the-counter quotations for an investment that are published in any newspaper of general circulation in the City of Toronto, in any recognized financial journal or report, or by any quotation service or that are contained in the records of a stock exchange are sufficient evidence of the prices and quotations. (7) The value of an investment in a mortgage is the present value of the mortgage calculated using the current interest rate to the maturity of the mortgage. (8) If a dividend on a share has been declared but not received by the Fund, and the dividend is considered to be income under the plan of operation of the Fund, the amount of the dividend shall be deducted from the price of the share unless the share price is an exdividend price. (9) If the Fund has purchased an investment and has not paid for it pending delivery of the investment, the investment shall be valued as an investment held by the Fund and the cash accounts adjusted accordingly. (10) If the Fund has sold an investment and has not delivered it pending receipt of the sale proceeds, the investment shall be valued as an investment held by the Fund at the net sale price. R.R.O. 1990, Reg. 733, s. 99. Distributions of Income
Distributions of Income
100. (1) The income of a Fund and the apportionment thereof must be determined at each valuation date. (2) The income must be distributed to participants not less frequently than quarter-yearly. (3) For purposes of distribution to participants, the income may be computed at the option of the trust corporation either on the basis of income accrued or on the basis of income actually received. (4) To facilitate the distribution of accrued but uncollected income, the cash principal of a Fund may be used to the extent necessary. R.R.O. 1990, Reg. 733, s. 100. Investments
Investments
101. (1) The investments of a Fund must be kept separate from the trust corporation’s own property, and each investment must be so identified in the books of the corporation to show clearly the Fund to which it belongs. (2) Despite subsection (1), any money of the Fund awaiting investment or distribution may be held on deposit in the savings department of the trust corporation subject to payment thereon by the corporation of interest computed at the current rate and in the same manner as in the case of ordinary deposits. R.R.O. 1990, Reg. 733, s. 101 (1, 2). (3) The total investment of a Fund in, (a) guaranteed investment certificates of any trust corporation; (b) debentures of any loan corporation; (c) deposits in a bank or receipts, deposit notes, certificates of deposit, acceptances and other similar instruments issued or endorsed by a bank; or (d) bonds of, or guaranteed by, any municipal corporation, may not exceed, in each case, 10 per cent of the book value of the Fund. O. Reg. 413/97, s. 19 (1). (4) The total investment of the Fund in investments of or guaranteed by any one person, other than the obligations referred to in subsection (3), may not exceed 5 per cent of the book value of the Fund. (5) Subsections (3) and (4) do not apply to investment in obligations issued or guaranteed by the Government of Canada or the government of any province of Canada. (6) The total number of shares held by a Fund in any one class of shares of any one body corporate may not exceed 5 per cent of the number of such shares outstanding and, if the trust corporation maintains more than one Fund, no investment may be made that would cause the aggregate investment for all the Funds in any one class of shares of any one body corporate to exceed such limitation. R.R.O. 1990, Reg. 733, s. 101 (4-6). (7) The liquidity of a Fund shall be maintained in adequate amounts and appropriate forms. O. Reg. 413/97, s. 19 (2). Accounting Records and Register of Participants
Accounting Records and Register of Participants
102. A complete set of accounting records must be maintained for each Fund during the existence of the Fund and for six years after its termination and the records must clearly distinguish items of principal from items of income. R.R.O. 1990, Reg. 733, s. 102.
Accounting Records and Register of Participants
103. The register of participants and all accounting records pertaining to a Fund for the period after that covered by the last accounts passed by a court shall be open to inspection during the regular business hours of the trust corporation by any co-trustee or beneficiary of a participant. R.R.O. 1990, Reg. 733, s. 103. Audit Report and Financial Statements
Audit Report and Financial Statements
104. (1) Every trust corporation must, at least once during each period of twelve months, prepare financial statements for each of its Funds and cause an audit of each of its Funds to be made by an independent accountant. (2) The financial statements mentioned in subsection (1) must include, (a) a list of the investments comprising each Fund at the end of the period covered by the statements and the book value thereof as at the end of the period covered by the statements; (b) a statement of purchases, sales and any investment changes and of revenue and disbursements since the last statements; and (c) appropriate comments as to any investments in default as to payment of principal and interest. (3) The trust corporation must file a copy of the financial statements and audit report for an audit of each Fund under subsection (1) with the Superintendent within ninety days after the date of the audit report. (4) The trust corporation must, without charge, send a copy of the financial statements and audit report for a Fund, (a) to every co-trustee of a participant in the Fund; and (b) upon request, to every beneficiary of a participant in the Fund. (5) The reasonable expenses of an audit under subsection (1) shall be paid out of the Fund and charged to principal and income in such proportion as the trust corporation considers appropriate. R.R.O. 1990, Reg. 733, s. 104. Administration Fees and Expenses
Administration Fees and Expenses
105. (1) A Fund may not be treated as a separate trust Fund on which commissions or other compensation is allowable and no trust corporation maintaining a Fund may make any charge against it for the management thereof nor pay a fee, commission or compensation out of the Fund for management but may reimburse itself out of a Fund for all reasonable expenses incurred by it in the administration of the Fund. (2) In any trust or estate that has money participating in a Fund, the trust corporation is entitled to the management fee or other compensation to which it would otherwise be entitled in respect of such money. R.R.O. 1990, Reg. 733, s. 105. Publicity
Publicity
106. A trust corporation may not make representations as to the earnings realized on a Fund or the value of the assets thereof except as is permitted or required under this Part. R.R.O. 1990, Reg. 733, s. 106. PART XV   DEPOSIT AGENTS
Publicity
107. In this Part, “deposit agent” means a person who receives deposits for transmission to a registered corporation. R.R.O. 1990, Reg. 733, s. 107; O. Reg. 413/97, s. 20.
Publicity
108. Every deposit received by a deposit agent must be evidenced by a receipt issued to the depositor in the name of the corporation with a copy of the receipt provided to the corporation. R.R.O. 1990, Reg. 733, s. 108.
Publicity
109. Every deposit received by a deposit agent from or on behalf of a depositor must be payable to the registered corporation only or be accompanied by a written direction authorizing the deposit agent to deposit the funds with a registered corporation. R.R.O. 1990, Reg. 733, s. 109.
Publicity
110. Revoked: O. Reg. 413/97, s. 21.
Publicity
111. Revoked: O. Reg. 413/97, s. 21. PART XVI  Revoked: O. Reg. 413/97, s. 22. PART XVII   LOANS TO DIRECTORS, OFFICERS AND EMPLOYEES
Publicity
112. For the purposes of subclause 142 (1) (a) (i) of the Act, all mortgage loans are prohibited, except a mortgage loan secured upon improved real estate in Canada under which the amount paid for or advanced on the mortgage, together with the amount of indebtedness under any mortgage on the real estate ranking equally with or prior to the mortgage does not exceed the lending value of the real estate to which the mortgage relates unless, (a) the mortgage loan is approved or insured under the National Housing Act (Canada); or (b) the excess is guaranteed or insured through an agency of the Government of Canada or of a province or territory of Canada or is insured by a policy of mortgage insurance issued by an insurance company licensed or registered under the Insurance Companies Act (Canada) or the Insurance Act or similar legislation of any province or territory of Canada, provided that the insurance company is not a subsidiary of the corporation. O. Reg. 413/97, s. 23 (2).
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112.1 For the purposes of clause 142 (1) (b) of the Act, a loan is prohibited if at any time it exceeds the lesser of, (a) $250,000; and (b) one-tenth of 1 per cent of the total assets of the corporation. O. Reg. 413/97, s. 23 (2).
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113. For the purposes of subsection 142 (2) of the Act, a provincial corporation that has been in operation for five years may make loans to its employees. R.R.O. 1990, Reg. 733, s. 113; O. Reg. 413/97, s. 24.
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114. (1) The amount of a loan made under subsection 142 (2) of the Act shall not exceed, (a) $150,000 where the corporation has total assets exceeding $100,000,000; and (b) fifteen one-hundredths of 1 per cent of the total assets of a corporation with total assets of $100,000,000 or less. R.R.O. 1990, Reg. 733, s. 114 (1). (2) Despite subsection (1), a loan made under subsection 142 (2) of the Act that is secured by the principal residence of the employee or the employee’s spouse shall not exceed, (a) $300,000 where the corporation has total assets exceeding $100,000,000; and (b) three-tenths of 1 per cent of the total assets of a corporation with total assets of $100,000,000 or less. R.R.O. 1990, Reg. 733, s. 114 (2); O. Reg. 112/00, s. 1; O. Reg. 322/05, s. 1. PART XVIII   SUBSIDIARIES
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115. (1) For the purposes of subsection 163 (1) of the Act, a provincial corporation may establish or acquire, as a subsidiary, (a) a financial institution; (b) a factoring corporation; (c) a financial leasing corporation; (d) an information services corporation; (e) an investment counselling and portfolio management corporation; (f) a mutual fund corporation; (g) a mutual fund distribution corporation; (h) a real estate brokerage corporation; (i) a real estate corporation; (j) a service corporation; (k) a specialized financing corporation; (l) a financial holding corporation that does not have a substantial investment in any entity other than in, (i) a body corporate referred to in this subsection, (ii) a real estate holding vehicle, or (iii) any other entity in which a financial institution or specialized financing corporation controlled by the financial holding corporation has a substantial investment; (m) a body corporate whose activities are ancillary to the business of the corporation or of a financial institution that is its subsidiary; and (n) a body corporate that engages in two or more of the businesses or activities engaged in or carried on by bodies corporate referred to in any of clauses (b) to (m). O. Reg. 413/97, s. 26 (1). (2) Before making an application to incorporate a proposed subsidiary, or seven days before making an investment in the shares of a proposed subsidiary that is an existing corporation or company, a provincial corporation shall file with the Superintendent, (a) where it is investing in the shares of an existing corporation or company, a certified copy of the instrument of incorporation, by-laws and most recent financial statements of the corporation or company; and (b) an undertaking that the provincial corporation, (i) will ensure that the proposed subsidiary engages only in business activities related to the purposes for which it is incorporated or acquired and subject to any terms and conditions imposed by the Superintendent, (ii) will ensure that the proposed subsidiary makes only investments that satisfy the terms, conditions and restrictions that are applicable to investments made by the provincial corporation, (iii) will provide to the Superintendent copies of the financial statements of the proposed subsidiary and such other information concerning its affairs as the Superintendent may from time to time request, and permit the Superintendent or a person appointed by the Superintendent to visit the head office and other offices of the subsidiary at any time and examine its books, vouchers, securities and documents, (iv) will notify the Superintendent forthwith of its disposition of any shares of the proposed subsidiary, and (v) will not permit the proposed subsidiary to amalgamate with another corporation or company without giving the Superintendent at least 15 days notice of the proposed amalgamation and obtaining the Superintendent’s approval. R.R.O. 1990, Reg. 733, s. 115 (2); O. Reg. 413/97, s. 26 (2).
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116. Revoked: O. Reg. 413/97, s. 27.
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117. (1) Every provincial corporation that has established or acquired a specialized financing corporation as a subsidiary shall ensure that at the time the subsidiary is acquired or established and at any subsequent time, (a) the subsidiary does not hold shares or ownership interests in a financial institution, directly or indirectly; (b) the aggregate of the book value of the shares held by the provincial corporation and its prescribed subsidiaries in the subsidiary and in all specialized financing corporations and the amount of loans that the provincial corporation and its subsidiaries have made to the subsidiary and all specialized financing corporations that are outstanding does not exceed 5 per cent of the corporation’s capital base; (c) the aggregate amount of all loans that were made to the subsidiary by all entities and that are outstanding does not exceed twice the amount of the subsidiary’s shareholders’ equity; and (d) the subsidiary has not held a substantial investment in any entity for more than 10 years. (2) For the purposes of subsection (1), (a) the amount of the subsidiary’s debt and shareholders’ equity is the amount indicated on its balance sheet, prepared on an unconsolidated basis; and (b) the book value of the shares and ownership interests held by an entity is the book value indicated on the entity’s balance sheet. O. Reg. 413/97, s. 28. PART XIX   DUTIES Duties of an Audit Committee
Duties of an Audit Committee
118. (1) The duties of an audit committee under subsection 103 (1) of the Act are as set out in section 119. (2) Every audit committee shall perform the duties set out in section 119 at least once each year and the duties set out in clauses 119 (2) (d), (m), (n) and (o) at such additional times as any committee member considers necessary. R.R.O. 1990, Reg. 733, s. 118.
Duties of an Investment Committee
120. (1) The duties of an investment committee under subsection 103 (1) of the Act are as set out in section 121. (2) Any report or recommendation made by an investment committee under section 121 is made to the board of directors of the corporation. R.R.O. 1990, Reg. 733, s. 120.
Duties of an Investment Committee
121. (1) In this section,  “investment practices” means the guidelines established for making specified classes of investments and the investment decisions made in relation to the guidelines, including investment decisions respecting mortgage loans, acquisition, development and construction loans, personal loans, commercial loans, leasing loans, marketable securities, other financial instruments, real estate and other fixed assets. (2) The duties of an investment committee are to, (a) monitor the investment practices of the corporation to ensure that the corporation is adhering to prudent investment standards, and report its findings thereon; (b) monitor and recommend procedures to be used by the corporation to monitor the investment practices of every subsidiary of the corporation and every joint venture in which the corporation is a participant to ensure that they are adhering to prudent investment standards; (c) recommend an investment policy for the corporation that specifies the proportion of the assets of the corporation that shall be allocated to specified classes of investments, and recommend procedures for implementing the policy; (d) recommend such changes to the investment policy of the corporation as the committee from time to time considers necessary to meet changes in the investment climate; (e) recommend the duties and powers of investment subcommittees, if any, and officers and employees of the corporation to determine and implement the investment policy of the corporation for specific classes of investments; (f) review and report on the investment policy determined by, and the investment decisions made by investment subcommittees, officers and employees of the corporation, and on the competence demonstrated by the subcommittees, officers and employees; (g) recommend the duties and powers to be given to any investment counsellor or other professional advisor retained by the corporation in connection with the investment policy of the corporation, and monitor the decisions of the counsellor or advisor to ensure that they are consistent with the investment policy of the corporation; (h) review every valuation performed under clause 42 (5) (b) or subsection 42 (6), (i) to ensure that it was performed by a valuator who, in the opinion of the committee, has a demonstrated ability to evaluate investments with independence and proficiency, and (ii) by examining the valuation method used, to ensure that the valuation is based upon sufficiently current information; (i) report every deviation from the investment policy of the corporation at the first meeting of the board of directors after the committee becomes aware of the deviation; (j) review all management reports concerning compliance by the corporation and its directors, officers and employees with the Act and regulations; and (k) monitor the investment practices of the corporation to ensure that the investment limits established do not exceed the limits required under the Act and regulations, and report its findings thereon. R.R.O. 1990, Reg. 733, s. 121. PART XX   BORROWING OVER THE LIMIT Borrowing Over the Limit
Borrowing Over the Limit
122. For the purposes of subsection 157 (4) of the Act, the following are prescribed as the manners for investing amounts that exceed the limit on the borrowing multiple of a provincial corporation: 1. Cash on hand and demand deposits in banks, provincial corporations and, if approved by the Superintendent, other depositories. 2. Treasury bills of Canada or a province. 3. Banker’s acceptances with a remaining term to maturity of one year or less. 4. Term deposits, bearer deposit notes and similar instruments issued by banks, provincial corporations and, if approved by the Superintendent, other depositories that in each case either are callable on demand or mature within 100 days. 5. Bonds, debentures or other evidence of indebtedness that are issued or guaranteed by, or in respect of which the debt service is guaranteed by, the Government of Canada, or the government of a province or a municipality. 6. Demand loans that are fully secured by assets of the classes specified in paragraphs 2 to 5, made to brokers, investment dealers and securities dealers provincial in Canada. R.R.O. 1990, Reg. 733, s. 122; O. Reg. 413/97, s. 29.
Borrowing Over the Limit
123. Revoked: O. Reg. 413/97, s. 30. Leases and Conditional Sales Contracts
Leases and Conditional Sales Contracts
125. The date in subsection 227 (1) of the Act is changed from July 1, 1998 to July 1, 1999. O. Reg. 320/98, s. 1. PART XX.2   INVESTMENTS Interpretation