14 General
prohibition
15 Person
previously a related party
16 Exceptions
17 Form of
approval
18 Limits
19 Transactions
with Crown
20 Notice of
contravention
21 Onus
22 Conduct review
committee and procedures
23 Interpretation
23.1 Guidelines
23.2 Compliance with legislation and guidelines
24 Maintenance of
assets
25 Risk weighting
26 Partial guarantees
27 Privately
issued mortgage backed securities
28 Investments in
mutual fund units
29 Liquidity
investments
30 Transitional
31 Consequential
amendment
32 Coming into
force
Schedule
Definitions
1(1) In this Regulation,
(a) “ATB”
means Alberta Treasury Branches;
(a.1) “bank”,
without limiting section 28(1)(d) of the Interpretation Act, includes a
bank named in Schedule III to the Bank Act (Canada);
(a.2) “financial
futures agreement” means a contract to buy or sell a standard quantity of a specified
financial instrument on or before a specified future date at an agreed price;
(b) “financial
institution” means
(i) a bank,
(ii) a loan corporation or trust corporation incorporated or continued
by or under an Act of Canada or a province,
(iii) a credit union incorporated or continued by or under an Act of
Canada or a province,
(iii.1) an association or a central cooperative credit society within the
meanings of the Cooperative Credit Associations Act (Canada), including
(to avoid any doubt) a federation of credit unions, being a financial services
cooperative, referred to in An Act Respecting Financial Services
Cooperatives (Quebec) (R.S.Q, cC‑67.3) and La Caisse centrale
Desjardins du Québec (commonly called the “Caisse centrale Desjardins”),
(iii.2) a credit union central incorporated or continued by or under the Credit
Union Act,
(iv) a Canadian authorized company or an insurance company constituted
or continued by or under an Act of Canada or a province, and
(v) a securities dealer within the meaning of the Securities Act;
(b.1) “fiscal
year” means ATB’s fiscal year;
(c) “forward
contract” means a contract to buy or sell currency or a specified financial
instrument on or before a specified future date at an agreed price;
(c.1) “guidelines”
means guidelines made under section 23.1(1);
(d) “improved
real estate” means
(i) land on which there exists a building or on which a building is
being or is about to be constructed and the adjacent land used or to be used in
connection with the building,
(ii) land on which bona fide farming operations are being conducted,
and
(iii) vacant land that is restricted by law in its use to commercial,
industrial or residential purposes, whether by zoning or otherwise;
(e) “option
agreement” means a contract under which a person acquires the right to buy or
sell a particular security at a specified future date at an agreed price;
(f) “participating
share” means a share of a corporation that carries the right to participate in
the earnings of the corporation to an unlimited degree and to participate in a
distribution of the remaining property of the corporation on dissolution;
(g) “swap”
means an agreement between two parties to exchange cash flows in the future in
accordance with a prearranged formula.
(2) For
the purposes of section 19 of the Act and section 12 of the Act, where
applicable,
(a) “asset
management corporation” means a corporation that administers and disposes of
property acquired through realization of a security interest held by or for the
benefit of ATB;
(b) “factoring
corporation” means a corporation whose activities are limited to acting as a
factor in relation to accounts receivable, including the lending of money and
the raising of money for the purpose of financing those activities;
(c) “financial
leasing corporation” means a corporation that enters into or acquires
agreements as defined in section 5.1;
(d) “information
management corporation” means a corporation whose activities are limited to
(i) the collection, manipulation and transmission of information,
(ii) the design, development, marketing and sale of computer software,
(iii) the provision of advisory and other services related to the
design and development of information management systems,
(iv) the design, development, marketing and sale of equipment integral
to information management systems, and
(v) the design, development, management, manufacturing, marketing and
sale of data transmission services, information sites, communication devices
and information platforms or portals,
in respect of information
that is primarily financial or economic in nature or information that relates
to the business of ATB or of a corporation in which ATB beneficially owns
shares pursuant to section 19(4) of the Act;
(e) “insurer”
means a corporation that is an insurer within the meaning of the Insurance
Act and whose activities are limited to underwriting term‑life
insurance and annuities and providing risk management and financial advisory
services;
(f) “investment
counselling corporation” means a corporation that is registered as an
investment counsel under the Securities Act;
(g) “mutual
fund distribution corporation” means a corporation that is registered as a
mutual fund dealer under the Securities Act;
(h) “portfolio
management corporation” means a corporation that is registered as a portfolio
manager under the Securities Act;
(i) “real
property brokerage corporation” means a corporation whose activities are
limited to acting as agent for vendors or purchasers of real estate where the
real estate is owned or administered by ATB;
(j) “real
property corporation” means a corporation whose primary business activity
consists of holding, managing or otherwise dealing with
(i) real property, or
(ii) shares of a corporation (including another real property
corporation) or ownership interests in an unincorporated entity that is
primarily engaged in holding, managing or otherwise dealing with real property;
(k) “securities
dealer” means a corporation that is a dealer within the meaning of the Securities
Act;
(l) “service
corporation” means a corporation whose activities are limited to the provision
of management services to
(i) ATB,
(ii) a financial institution that is affiliated with ATB, or
(iii) a corporation in which ATB or a financial institution that is
affiliated with ATB, or both of them, holds or beneficially owns more than 50%
of the outstanding voting shares.
(3) For the purposes of section 14 of
the Act,
(a) “interest
payable” includes interest that has accrued but is not yet payable;
(b) “money
deposited” includes debt instruments issued by ATB that
(i) repealed AR 169/2006 s2,
(ii) have an original term to maturity of not more than 10 years, and
(iii) are not subordinate to any other money
deposited with ATB.
AR 187/97
s1;54/98;164/2002;110/2004;169/2006
Interpretation
2(1) For the purposes of the Act and this
Regulation,
(a) an
entity is affiliated with another entity if one of them is controlled by the
other or both of them are controlled by the same person, and
(b) the
affiliates of an entity are deemed to be affiliated with all other entities
with which the entity is affiliated.
(2) For
the purposes of the Act and this Regulation,
(a) a
person controls a corporation if securities of the corporation to which are
attached more than 50% of the votes that may be cast to elect directors of the
corporation are held or beneficially owned by the person and the votes attached
to those securities are sufficient, if exercised, to elect a majority of the
directors of the corporation;
(b) a
person controls a trust, partnership, fund or other unincorporated entity if
more than 50% of the beneficial interest, however designated, into which the
entity is divided is held or beneficially owned by that person and the person
is able to direct the affairs of the entity;
(c) notwithstanding
clauses (a) and (b), a person controls an entity if the person has, in relation
to the entity, any direct or indirect influence that, if exercised, would
result in control in fact of the entity;
(d) a
holding corporation is deemed to control any entity that is controlled or
deemed to be controlled by a subsidiary of the holding corporation;
(e) an
entity that controls another entity is deemed to control any entity that is
controlled or deemed to be controlled by the other entity;
(f) a
corporation is the holding corporation of all of its subsidiaries.
(3) For
the purposes of the Act and this Regulation, a corporation is a subsidiary of
another corporation if
(a) it
is controlled by
(i) that other,
(ii) that other and one or more corporations each of which is
controlled by that other, or
(iii) 2 or more corporations each of which is controlled by that other,
or
(b) it
is a subsidiary of a corporation that is that other’s subsidiary.
(4) For
the purposes of the Act and this Regulation, a person has, or a group of
persons have, a significant interest in a corporation if
(a) in
the case of a person, the person holds or beneficially owns, either directly or
indirectly, more than 10% of the outstanding shares of the corporation, or
(b) in
the case of a group of persons, they hold or beneficially own, either
individually or together and either directly or indirectly, more than 50% of
the outstanding shares of the corporation.
(5) For
the purposes of the Act and this Regulation, a person has, or a group of
persons have, a significant interest in an entity other than a corporation if,
(a) in
the case of a person, the person holds or beneficially owns, either directly or
indirectly, more than 10% of the beneficial interest, however designated, into
which the entity is divided, or
(b) in
the case of a group of persons, they hold or beneficially own, either
individually or together and either directly or indirectly, more than 50% of
the beneficial interest, however designated, into which the entity is divided.
(6) For
the purposes of the Act and this Regulation, a security or other interest is
beneficially owned by a person when it is held directly or through a personal
representative or other intermediary for the use or benefit of that person
otherwise than as a security interest.
(7) For
the purposes of the Act and this Regulation, a person shall be deemed to own
beneficially securities that are beneficially owned by a corporation that is
controlled by that person.
(8) For
the purposes of the Act and this Regulation, where a person beneficially owns
shares of a corporation, the person shall be deemed to beneficially own that
proportion of shares of every other corporation that is beneficially owned by
the first‑mentioned corporation that is equal to the proportion of shares
of the first‑mentioned corporation that is beneficially owned by the
person.
(9) Where
subsections (7) and (8) apply to a person, only the subsection under which the
person is deemed to beneficially own more securities applies to the person.
Corporations
prescribed for section 19(4)(l) of the Act
2.1 The following are the prescribed
corporations for the purposes of section 19(4)(l) of the Act:
(a) a
financial leasing corporation;
(b) a
mortgage broker within the meaning of the Real Estate Act that is a
corporation;
(c) a
loan servicing corporation, being a corporation that performs administrative
functions to carry out the obligations of a loan holder under a loan agreement;
(d) a payment processing corporation, being a
corporation that provides cheque clearing, remittance processing or similar
services or any 2 or all of them.
AR 164/2002
s3;110/2004;169/2006
Significant borrower
prescribed amounts
3(1) The prescribed amount of an entity’s
outstanding indebtedness for the purposes of section 4(1)(a) of the Act is an
amount equal to 25% of the equity of the entity.
(2) The
prescribed amount of an individual’s outstanding indebtedness for the purposes
of section 4(1)(b) of the Act is an amount equal to the greater of
(a) $200 000,
and
(b) 25%
of the individual’s net worth.
Trustee powers
4 The following are the prescribed
transactions in respect of which ATB may act as a trustee for a trust:
(a) a
self‑directed registered income fund under the Income Tax Act
(Canada);
(b) a
self‑directed registered education savings plan under the Income Tax
Act (Canada);
(c) a
self‑directed registered retirement savings plan under the Income Tax
Act (Canada);
(d) a mutual fund trust that ATB manages and for
which a prospectus or simplified prospectus has been filed and a final receipt
has been issued under the Securities Act.
AR 187/97 s4;110/2004
Limitation on real
estate investments
5(1) All subsidiaries of ATB, except subsidiaries
that are financial institutions, are prescribed subsidiaries for the purposes
of section 17 of the Act.
(2) The
prescribed amount for the purposes of section 17 of the Act is 3.5% of the
assets of ATB and its prescribed subsidiaries.
(3) An interest in real property that is acquired
through realization of a security interest is exempt from the application of
section 17 of the Act for a period of 7 years after the date of its
acquisition.
AR 187/97 s5;110/2004
Leasing and related
agreements
5.1(1) In this section,
(a) “agreement”
means
(i) a security agreement as defined in the Personal Property
Security Act, or
(ii) a financial lease agreement, being an agreement for a lease of
personal property in which credit is extended by the lessor to the lessee for
the purpose of enabling the lessee to meet the lessee’s obligations under the
lease;
(b) “property”
means the personal property to which an agreement relates.
(2) ATB
may not beneficially own shares in a financial leasing corporation unless
(a) the
aggregate of
(i) the book value of all of the property that is subject to
agreements held by the corporation, and
(ii) all amounts owing as receivables in respect of such agreements
is equal to at least 80% of
the assets of the corporation, and
(b) the
corporation meets the requirements of the agreements.
(3) A
financial leasing corporation may enter into or acquire agreements only if the
following requirements are met:
(a) the
corporation shall not direct its customers or potential customers to particular
dealers in the property;
(b) at
no time may the aggregate of the estimated residual values of all the property
of the corporation, excluding motor vehicles, leased under the financial lease
agreements exceed 10% of the aggregate of the costs of acquisition of that
leased property to the corporation;
(c) the
estimated residual value of property leased under a financial lease agreement
must not exceed 20% of its cost of acquisition to the corporation;
(d) the
agreement must be entered into or acquired for the purpose of extending credit
to the lessee or purchaser;
(e) the
property that is the subject of the agreement must be selected by the lessee or
buyer and
(i) must be acquired by the corporation at the request of the lessee
or buyer, or
(ii) must have been acquired by the corporation through the operation
of an earlier agreement;
(f) the
agreement must yield a return that
(i) will compensate the corporation for not less than its full
investment in the property,
(ii) is reasonable, taking into account
(A) the term of agreement and the other terms
and conditions of it,
(B) the technological obsolescence of the
property, and
(C) the rate of return sought by the other
lessors in respect of similar agreements in respect of similar property and
under the same terms and conditions,
and
(iii) is calculated by taking into account
(A) rental charges paid by the lessee or
purchaser,
(B) estimated tax benefits of the agreement to
the corporation, including tax credits and capital cost allowance claims, and
(C) the amount of,
(I) where the lessee or purchaser or a third
party who is dealing at arm’s length with the corporation has, on or before the
commencement of the agreement, contracted to purchase the property or
unconditionally guaranteed the resale value of the property at the date of
expiry of the agreement, the purchase price or the resale value so guaranteed,
or
(II) in any other case, but subject to clause
(c), the estimated residual value of the property;
(g) the
agreement must contain a provision
(i) assigning and conveying to the lessee or purchaser the benefit of
all warranties, guarantees or other undertakings made by a manufacturer or
supplier relating to property, or
(ii) setting out the responsibilities of the corporation with regard
to the warranties, guarantees or other undertakings referred to in subclause
(i);
(h) the
agreement must substantially transfer to the lessee or purchaser the benefits
and risks incidental to the operation of the property and must not place responsibility
on the part of the corporation to install, promote, service, clean, maintain or
repair the property;
(i) where
the lessee or purchaser defaults in the manner set out in the agreement and the
default is not waived or the agreement, including any renewals or extensions of
it, expires, the corporation shall
(i) liquidate its interest in the property, or
(ii) enter into a new agreement in respect of that property within 2
years of that default or expiry or, where proceedings in respect of that property
have prevented the corporation from complying with that requirement within that
period, within 2 years of the completion of those proceedings.
(4) An
agreement may be renewed on its expiry and may be extended during its terms.
(5) The
financial leasing corporation shall not enter into an agreement in respect of
(a) a
motor vehicle whose estimated residual value exceeds 50% of the cost of its
acquisition, or
(b) personal
household property.
(6) For
the purposes of subsection (5),
(a) repealed
AR 169/2006 s4;
(b) “personal household property” means personal
property that is leased by an individual pursuant to a financial lease
agreement or purchased by an individual pursuant to a conditional sales
agreement and intended primarily for the personal use or enjoyment of the
lessee or purchaser or of an individual who is not dealing at arm’s length with
the lessee or purchaser.
AR 164/2002
s4;110/2004;169/2006
Limitation on equity
investments
6(1) In this section and section 7 “subsidiary” does
not include a financial institution.
(2) For
the purposes of this section,
(a) a
purchase or acquisition by a subsidiary of ATB is considered to be a purchase
or acquisition by ATB;
(b) in
calculating beneficial ownership of participating shares in a corporation, no
regard shall be taken of the ownership of shares in a corporation referred to
in section 19(4) of the Act.
(3) Subject
to section 7, ATB shall not
(a) beneficially
own participating shares of a corporation or an ownership interest in an
unincorporated entity, or
(b) acquire
control of a corporation that beneficially owns shares or ownership interests
referred to in clause (a),
if, as a result of the transaction, the aggregate value of
all such shares and ownership interests beneficially owned by ATB and its
subsidiaries would exceed 3.5% of the assets of ATB and its subsidiaries.
AR 187/97 s6;110/2004
Combined limitation
7 Where ATB or its subsidiaries, or both of
them, have investments referred to in section 17 of the Act and investments
referred to in section 6 of this Regulation,
(a) the
aggregate value calculated under section 17 of the Act and section 5(2) of this
Regulation, plus
(b) the
aggregate value calculated under section 6 of this Regulation
shall not exceed 5% of the assets of ATB and its
subsidiaries.
AR 187/97
s7;110/2004;169/2006
Connected persons
8(1) For the purposes of section 18(1) of the Act a
person is connected to another person
(a) if
the person is an affiliate of the other person, or
(b) if,
in respect of a loan to or an investment in those persons,
(i) the loan or investment is for the same purpose in whole or in
part,
(ii) the expected source of repayment of the loan or investment is the
same in whole or in part, or
(iii) the security for the loan or investment is the same in whole or
in part.
(2) For
the purposes of section 18 of the Act, this section, section 10(5) and section
30(2), references to the making of a loan are to be taken to include references
to the guaranteeing of persons’ obligations and for the purposes of section
18(2)(c) of the Act “investment” includes anything into which money may be
placed as a result of subsection (5)(m).
(3) Notwithstanding
subsection (1), persons who are financially independent of each other to a
material extent are not connected persons for the purposes of section 18 of the
Act.
(4) The
prescribed amount for the purposes of section 18(1)(a) of the Act is the
aggregate of
(a) the
outstanding balance of principal and interest owing under loans other than
guarantees,
(b) the
face value of guarantees, and
(c) the
book value of investments
in an amount equal to
25% of ATB’s capital within the meaning of section 24(1)(a).
(5) The
following are prescribed as investment vehicles for the purpose of section
18(2)(c) of the Act:
(a) loans
to or investments in subsidiaries of ATB;
(b) an
investment that is authorized under section 19(4) of the Act;
(c) securities
that are issued by a university, a municipality or a hospital or school board
in Canada;
(d) loans
to the Government of Canada or the government of a province or to any of their
agencies, or to a university, a municipality or a hospital or school board in
Canada;
(e) loans
that are guaranteed by the Government of Canada or the government of a
province;
(f) securities
on which payment is ensured by rates or by the levy of a tax by a school or
municipal corporation under a law of Canada or a province on property situated
in the territory of the school or municipal corporation;
(g) a
residential mortgage loan referred to in section 9;
(h) securities
on which payment of principal and interest is guaranteed by the grant of a
subsidy by the Government of Canada or the government of a province that is
payable out of sums voted each year for that purpose;
(i) debt
securities including banker’s acceptances, (other than subordinated debt
securities) that are issued or guaranteed by a financial institution that is
authorized to take deposits in Canada;
(j) deposits
with financial institutions that are authorized to take deposits in Canada;
(k) demand
loans at book value, other than loans to an individual, that are fully secured
by any of the following securities:
(i) at market value, Treasury Bills of the Government of Canada or of
a province;
(ii) at book value, term deposits or other similar instruments issued
by a financial institution that mature within 100 days after the applicable
date;
(iii) at market value, bankers acceptances that mature within one year
from the date of issue and bearer deposit notes;
(iv) at market value, commercial paper that matures within 100 days
from the date of its issue and has at least a rating of P‑1 from Moody’s
Investors Service or the equivalent rating from another approved rating
organization, as that term is defined in the relevant Multilateral Instrument
issued by the Canadian Securities Administrators;
(v) at market value, securities, other than securities referred to in
clause (i), that are issued or guaranteed by the Government of Canada, the
government of a province or a municipality;
(l) a
line of credit to a participant in the Large Value Transfer System that has at
least a rating referred to in clause (k)(iv);
(m) investments in notes issued by master asset
partnerships, as contemplated in the Framework Agreement executed by ATB and
other members of the Pan‑Canadian Third Party Asset‑Backed
Commercial Paper Investors Committee that became effective on December 23,
2007, including the results of participation in any related margin funding
facility or other actions or agreements to be entered into in furtherance of
the proposed restructuring contemplated in that Agreement, as approved by the
board.
AR 187/97
s8;164/2002;110/2004;169/2006;59/2008
Mortgage investments
9(1) Subject to this section, ATB may
(a) purchase
a mortgage, or
(b) make
a loan on the security of a mortgage,
in this section called
the “investment mortgage”, on improved real estate in Alberta.
(2) Where
the investment mortgage is a residential mortgage, the amount paid for or
advanced on the investment mortgage, together with the amount of indebtedness
under any other mortgage on the improved real estate that ranks equally with or
prior to the investment mortgage, must not exceed 80% of the market value of
the real estate at the time the investment mortgage is purchased or granted, as
the case may be, unless the excess amount is guaranteed or insured by the
Government of Alberta, the Government of Canada, the government of another
province, an agency of any of those governments or an insurance policy issued by
an insurance corporation authorized to carry on business in Canada.
(3) Where
the excess amount referred to in subsection (2) is guaranteed or insured by an
agency of the Government of Alberta, the guarantee or insurance must be on the
same basis and subject to the same conditions that would apply if the excess
amount were guaranteed or insured under the National Housing Act
(Canada).
(4) Subsection (2) does not apply where ATB makes a
loan to the purchaser of improved real estate that ATB acquired to protect its
investment and is disposing of.
AR 187/97
s9;110/2004;111/2007
Mortgage loans re
eligible borrowers
9.1(1) In this section,
(a) “eligible
borrower” means
(i) a corporation that is incorporated or continued under the Business
Corporations Act or the Business Corporations Act (Canada) and has
its head office located in Alberta,
(ii) an entity (other than a corporation
