S-29.02, r. 1 - Regulation under the Trust Companies and Savings Companies Act

Updated to 1 October 2024

This document has official status.

chapter S-29.02, r. 1

Regulation under the Trust Companies and Savings Companies Act

Trust Companies and Savings Companies Act

(chapter S-29.02, ss. 277 and 278; S.Q. 2018, c. 23, s. 812).

The former alphanumerical designation of this Regulation was chapter S-29.01, r. 1.

The fees prescribed in the Regulation have been indexed as of 1 January 2024 pursuant to the notice published in Part 1 (French) of the Gazette officielle du Québec of 30 December 2023, page 908. (s. 20)

DIVISION I ESTABLISHMENT OF SECURITY

1. In its investment activities, a Québec company may, for the acquisition or improvement of an immovable, hypothecate the immovable.

O.C. 719-88, s. 1.

DIVISION II BONDS, DEBT SECURITIES AND SUBORDINATED LOANS

2. The issue of bonds and debt securities or the acceptance of subordinated loans covered by the Trust Companies and Savings Companies Act (chapter S-29.02) must be previously authorized by the Autorité des marchés financiers.

Every company shall submit to the Authority an application for authorization accompanied by:

(1)  a certified true copy of the resolution of its board of directors respecting such issue or acceptance;

(2)  a specimen of the bonds or other debt securities it proposes to issue;

(3)  a copy of the subordinated loan contracts it proposes to accept.

Such issue or acceptance may only be carried out after authorization by the Authority.

O.C. 719-88, s. 2.

3. The resolution of the board of directors shall indicate:

(1)  the aggregate amount of bonds, debt securities or subordinated loans that may be issued or accepted;

(2)  the rate of interest and the term that must be fixed or could be fixed and any right to redemption before term;

(3)  any privilege of conversion or exchange into shares of the company, where bonds or other debt securities are involved;

(4)  any right to redemption in shares of the company where subordinated loans are involved;

(5)  any conditions for redemption.

O.C. 719-88, s. 3.

4. A bond, another debt security or a subordinated loan covered by section 193 of the Act may be issued or accepted by a company only if it is stipulated that redemption is subject to prior written authorization by the Authority.

O.C. 719-88, s. 4.

5. A bond or other debt security covered by section 193 of the Act may be issued only for an amount of at least $100,000, and on the condition that redemption may not be sought before a 5-year term unless it is stipulated that the company may at its option repay the creditor before the term.

O.C. 719-88, s. 5.

6. Such bonds or other debt securities must also indicate expressly:

(1)  that they do not constitute a deposit guaranteed by the Régie de l’assurance-dépôts du Québec;

(2)  the rights, privileges, conditions and restrictions attached thereto.

O.C. 719-88, s. 6.

DIVISION III

(Revoked)

O.C. 719-88, Div. III; S.Q. 2008, c. 7, s. 171.

7. (Revoked).

O.C. 719-88, s. 7; O.C. 1702-91, s. 1; S.Q. 2008, c. 7, s. 171.

8. (Revoked).

O.C. 719-88, s. 8; O.C. 1702-91, s. 2; S.Q. 2008, c. 7, s. 171.

DIVISION IV

(Revoked)

O.C. 719-88, Div. IV; S.Q. 2008, c. 7, s. 171.

9. (Revoked).

O.C. 719-88, s. 9; O.C. 1702-91, s. 3; S.Q. 2008, c. 7, s. 171.

10. (Revoked).

O.C. 719-88, s. 10; S.Q. 2008, c. 7, s. 171.

DIVISION V SUBSIDIARIES

11. A Quebec company may have a subsidiary only if it restricts itself to activities it is legally authorized to carry out.

O.C. 719-88, s. 11.

12. A Quebec company may have a subsidiary only if its investments in the subsidiary and the guarantees it has provided with respect to the subsidiary’s bonds do not have the effect of increasing the aggregate of such investments and guarantees to:

(1)  more than 2% of its assets for the aggregate of the subsidiaries that are not companies within the meaning of the Act and whose principal activity is not that of securities broker or insurer;

(2)  more than 5% of its assets for the aggregate of the subsidiaries that are not companies.

Such investments and guarantees shall be evaluated at their book value.

O.C. 719-88, s. 12.

13. A Quebec company may have a subsidiary only if, 15 days before applying for its incorporation or acquiring the subsidiary, it files with the Authority:

(1)  a commitment to the effect that:

(a)  the subsidiary will make only investments and loans in accordance with the standards applicable to investments and loans of the company;

(b)  within 2 years of its acquisition by the company the subsidiary will make its investments and loans comply with the standards applicable to the investments and loans of the company;

(c)  the subsidiary will not carry on activities other than those planned at the time of its incorporation or those carried on at the time of its acquisition by the company except with prior authorization in writing from the Authority;

(d)  it will inform the Authority of its intention of parting with any shares of the subsidiary;

(e)  the subsidiary will not amalgamate with another legal person except with prior authorization in writing from the Authority;

(f)  the subsidiary will remit to the Authority any document he may require respecting its activities and annually a copy of its audited financial statement;

(2)  a summary of the activities planned for the subsidiary that the company wishes to incorporate and, when available, a copy of the deed of incorporation and the by-laws of the subsidiary;

(3)  a copy of the deed of incorporation, the by-laws and the most recent audited financial statements of the subsidiary that the company wishes to acquire, and a summary of its activities.

Subparagraphs a, b and c of paragraph 1 of the first paragraph do not apply to subsidiaries that are themselves companies within the meaning of the Act or whose principal activity is that of securities broker or insurer.

O.C. 719-88, s. 13.

DIVISION VI FEES PAYABLE

14. (Revoked).

O.C. 719-88, s. 14; O.C. 273-93, s. 1; O.C. 280-2000, s. 1; S.Q. 2010, c. 7, s. 280.

15. (Revoked).

O.C. 719-88, s. 15; O.C. 273-93, s. 2; O.C. 280-2000, s. 1; S.Q. 2010, c. 7, s. 280.

16. (Revoked).

O.C. 719-88, s. 16; O.C. 273-93, s. 3; O.C. 280-2000, s. 1; S.Q. 2010, c. 7, s. 280.

17. (Revoked).

O.C. 719-88, s. 17; O.C. 273-93, s. 4; O.C. 280-2000, s. 1; S.Q. 2010, c. 7, s. 280.

18. (Revoked).

O.C. 719-88, s. 18; S.Q. 2010, c. 7, s. 280.

19. (Revoked).

O.C. 719-88, s. 19; S.Q. 2010, c. 7, s. 280.

20. The fees exigible for the issuance of a licence are $1,042.

O.C. 719-88, s. 20; O.C. 273-93, s. 5; O.C. 280-2000, s. 2.

20.01. (Revoked).

O.C. 273-93, s. 6; O.C. 280-2000, s. 2; O.C. 309-2002, s. 1.

DIVISION VII MISCELLANEOUS

20.1. For the application of subparagraph 5 of section 129 of the Act, the following matters may be the subject of contracts between a company or its subsidiary and an interested person:

(1)  the disposition of elements of the assets acquired before the coming into force of the Act which it is forbidden to hold;

(2)  the acquisition or the disposal of a subsidiary of the company within a corporate reorganization.

Such contracts are invalid without prior authorization by the Authority.

O.C. 1702-91, s. 4.

21. For the application of section 212 of the Act, the expression “overdue loan” means:

(1)  a loan on which the interest is 90 days or more overdue;

(2)  a loan on which the interest is overdue and ultimate recovery is uncertain;

(3)  a loan of which the initial contractual provisions were altered by reason of the debtor’s default.

The expression does not include a loan that is a mortgage loan of which the repayment is approved or insured within the meaning of the National Housing Act (R.S.C. 1985, c. N-11) or guaranteed or insured by the Government of Québec, another Canadian province, Canada, a territory of Canada or one of their agencies, or under a mortgage insurance policy issued by an insurance company authorized to carry on its activities in Canada.

O.C. 719-88, s. 21.

22. For the application of section 212 of the Act, the expression “unproductive investment” means:

(1)  a debt security other than a loan on which the interest is in arrears;

(2)  preferred shares of a legal person in default of payment of the prescribed dividends on those shares;

(3)  an immovable on which there is a hypothec or other charge in favour of a company that acquired it to protect its interests.

O.C. 719-88, s. 22.

23. For the application of section 406 of the Act, the gross revenues of a company in Québec during a year represent the aggregate of the fees and commissions earned for its activities in Québec and revenues from its activity as a financial agent carried on in Québec.

For the purposes of the calculation referred to in the first paragraph, the amount of a commission derived from a real estate broker’s activity shall be reduced by the sum paid to the agent who participated in the transaction.

O.C. 719-88, s. 23.

24. For the purposes of the calculation referred to in section 23, revenues derived from activity as a financial agent shall be determined by deducting investment revenues, interest on deposits and borrowings and adding or subtracting any gains or losses on investments and gains or losses on term contracts and options.

That part of such revenues earned in Québec shall be calculated by multiplying the amount resulting from the calculation made under the first paragraph by the average balance of deposits accepted in Québec and dividing the result by the average balance of the total deposits. The average balance of deposits shall be calculated by dividing by 2 the balance of deposits at the end of the preceding year and the balance of deposits at the end of the current year.

O.C. 719-88, s. 24.

DIVISION VIII INFRACTIONS

25. Any infringement of sections 2 to 6, 10 and 11 to 13 constitutes an offence.

O.C. 719-88, s. 25.

26. (Omitted).

O.C. 719-88, s. 26.

REFERENCES

O.C. 719-88, 1988 G.O. 2, 2124

O.C. 1702-91, 1991 G.O. 2, 4977

O.C. 273-93, 1993 G.O. 2, 1816

O.C. 280-2000, 2000 G.O. 2, 1366

O.C. 309-2002, 2002 G.O. 2, 1671

S.Q. 2004, c. 37, s. 91

S.Q. 2008, c. 7, s. 177

S.Q. 2010, c. 7, s. 280

S.Q. 2018, c. 23, s. 811