C-2 - Act respecting the Caisse de dépôt et placement du Québec

Updated to 18 December 2003

This document has official status.

chapter C-2

Act respecting the Caisse de dépôt et placement du Québec

DIVISION I CONSTITUTION OF THE FUND

1. A body is constituted under the name of “Caisse de dépôt et placement du Québec”.

It is designated in this Act by the word “Fund”.

1965 (1st sess.), c. 23, s. 1; 1977, c. 5, s. 14.

2. The head office of the Fund shall be in the territory of Ville de Québec.

1965 (1st sess.), c. 23, s. 2; 1996, c. 2, s. 102; 1999, c. 40, s. 42; 2000, c. 56, s. 224.

3. The Fund is a legal person.

1965 (1st sess.), c. 23, s. 3; 1999, c. 40, s. 42.

4. The Fund shall be a mandatary of the State.

The property belonging to the Fund shall be the property of the State, but the performance of the obligations of the Fund may be levied against such property. The Fund may bind itself in any way whatsoever, in particular by borrowing, using the property as security or encumbering it as though it were not the property of the State.

The Fund binds only itself when it acts in its own name.

Legal persons all of whose shares are held directly or indirectly by the Fund are mandataries of the State and the provisions of this section are applicable to them.

1965 (1st sess.), c. 23, s. 4; 1970, c. 18, s. 1; 1992, c. 22, s. 1; 1999, c. 40, s. 42.

DIVISION II ADMINISTRATION

5. The Fund shall be administered by a board of directors consisting of the general manager of the Fund, the president of the Régie des rentes du Québec and nine other members appointed for three years by the Government which shall fix, as the case may be, the salary, additional salary, fees or allowances of each of them.

Of such nine members, two shall be chosen from among the officers of the Government or the directors of a government agency, another shall be chosen from among the representatives of associations of employees and another shall be chosen from among the directors of cooperative associations. At least seven of such nine members must be resident in Québec.

A government agency mentioned in the second paragraph is one to which the majority of its members are appointed by the Government or a minister, or at least one half of whose capital stock is derived from the consolidated revenue fund.

1965 (1st sess.), c. 23, s. 5; 1977, c. 5, s. 14; 1977, c. 62, s. 1; 1990, c. 84, s. 1; 1995, c. 9, s. 1; 1997, c. 88, s. 1.

6. There shall also be three associate members of the board of directors of the Fund who shall sit thereon without the right to vote: the Deputy Minister of Finance, one senior officer of Hydro-Québec attached to the finance branch and one member of the Commission municipale du Québec or an officer of the Ministère des Affaires municipales, du Sport et du Loisir, designated by the Government.

1965 (1st sess.), c. 23, s. 6; 1969, c. 27, s. 1; 1977, c. 5, s. 14; 1977, c. 62, s. 2; 1999, c. 43, s. 13; 2003, c. 19, s. 250.

7. The general manager of the Fund shall be the chairman of the board of directors, and the president of the Régie des rentes du Québec the vice-chairman.

1965 (1st sess.), c. 23, s. 7; 1977, c. 5, s. 14; 1990, c. 84, s. 2; 1995, c. 9, s. 2.

8. The general manager shall be appointed by the Government for a term of ten years, and the Government shall fix his salary, which may not be reduced.

He may be removed from office only by a resolution of the National Assembly.

In the case of absence or inability to act of the general manager, the Government may appoint a substitute. The board of directors of the Fund may designate a member of the personnel of the Fund to exercise the powers of the general manager until a substitute is appointed.

1965 (1st sess.), c. 23, s. 8; 1968, c. 9, s. 84; 1990, c. 84, s. 3; 1995, c. 9, s. 3; 1999, c. 40, s. 42.

8.1. (Repealed).

1990, c. 84, s. 3; 1995, c. 9, s. 4.

9. Each member of the board of directors, including the general manager, shall remain in office after the expiry of his term of office until replaced or reappointed.

1965 (1st sess.), c. 23, s. 9; 1990, c. 84, s. 4; 1995, c. 9, s. 5.

10. Any vacancy occurring during the term of office of a member appointed under section 5 shall be filled for the unexpired portion of the term of office of the member to be replaced.

1965 (1st sess.), c. 23, s. 10.

11. (Repealed).

1965 (1st sess.), c. 23, s. 11; 1997, c. 88, s. 2.

12. No member of the board of directors shall have an interest in a securities business.

If upon his appointment a member of the board of directors has such an interest or if he acquires the same subsequently by succession, gift or otherwise, he must dispose thereof promptly.

1965 (1st sess.), c. 23, s. 12; 1977, c. 62, s. 3.

13. The board of directors shall make the regulations of the Fund.

Such regulations, except those made under section 15, shall be submitted to the Government for approval, and published in the Gazette officielle du Québec.

They shall be laid before the National Assembly within 15 days if then in session; if not, they shall be laid before it within 15 days after the opening of the next session.

1965 (1st sess.), c. 23, s. 13; 1968, c. 9, s. 90; 2000, c. 8, s. 106.

14. The general manager shall be responsible for the administration and direction of the Fund within the scope of its regulations, and shall assume such other responsibilities as are assigned to him by the board of directors.

1965 (1st sess.), c. 23, s. 14; 1990, c. 84, s. 5; 1995, c. 9, s. 6.

14.1. (Repealed).

1990, c. 84, s. 5; 1995, c. 9, s. 7.

15. The officers and other employees of the Fund shall be appointed in the manner provided in its regulations and in accordance with the staff requirements established thereunder.

Subject to the provisions of a collective agreement, the Fund shall determine, by resolution of the board of directors, the standards and scales of remuneration, employee benefits and other conditions of employment of the officers and other employees of the Fund in accordance with the conditions defined by the Government.

1965 (1st sess.), c. 23, s. 15; 1965 (1st sess.), c. 14, s. 81; 1977, c. 62, s. 4; 2000, c. 8, s. 107.

15.1. The officers and other employees of the Fund who have been appointed on a permanent basis under the Civil Service Act (1965, 1st session, chapter 14) before 22 December 1977 shall not be dismissed or removed except under section 33 of the Public Service Act (chapter F-3.1.1). They retain their right to be kept available or to be transferred to a position in the civil service requiring the same classification as they held on that date.

1977, c. 62, s. 4; 1983, c. 55, s. 161.

15.2. The following apply to the officers and other employees of the Fund:

(a)  the Act respecting the Civil Service Superannuation Plan (chapter R-12) for those appointed before 1 July 1973, except those having elected for the plan mentioned in paragraph b, and for those appointed after that date if it applied to them on their appointment;

(b)  the Act respecting the Government and Public Employees Retirement Plan (chapter R-10) for those not mentioned in paragraph a.

The Fund may, however, in the cases and on the conditions prescribed by regulation, authorize any exception to the application of the first paragraph.

1977, c. 62, s. 4; 1992, c. 22, s. 2.

16. The general manager and the other members of the board of directors of the Fund, and the officers and employees thereof, cannot be sued for any official act performed in good faith in the exercise of their functions.

1965 (1st sess.), c. 23, s. 16; 1990, c. 84, s. 6; 1995, c. 9, s. 8.

17. No extraordinary recourse contemplated in articles 834 to 850 of the Code of Civil Procedure shall be exercised and no injunction shall be granted against the Fund or against the members of its board of directors acting in their official capacity.

Article 33 of the Code of Civil Procedure shall not apply to the Fund.

A judge of the Court of Appeal, upon motion, may annul summarily any writ, order or injunction issued or granted contrary to this section.

1965 (1st sess.), c. 23, s. 17; 1969, c. 27, s. 2; 1979, c. 37, s. 43.

DIVISION III DEPOSITS

18. The Fund shall receive on deposit all moneys whereof such deposit is provided for by law.

1965 (1st sess.), c. 23, s. 18; 1969, c. 27, s. 3; 1969, c. 50, s. 4.

19. The Fund shall administer on behalf of the Commission de la santé et de la sécurité du travail the securities of the Fonds de la santé et de la sécurité du travail established under section 136.1 of the Act respecting occupational health and safety (chapter S-2.1) in accordance with the terms and conditions fixed by the Government.

1972, c. 41, s. 1 (part); 1977, c. 5, s. 14; 1978, c. 57, s. 92; 1979, c. 63, s. 329; 2002, c. 76, s. 36.

20. The Fund may receive on deposit sums of money derived from

(a)  a supplemental pension plan to which contributions are made by a school board or a body which derives more than one-half of its resources from the consolidated revenue fund;

(b)  the Commission de la construction du Québec under the Act respecting labour relations, vocational training and manpower management in the construction industry (chapter R-20);

(c)   the Government and Public Employees Retirement Plan established by the Act respecting the Government and Public Employees Retirement Plan (chapter R-10) and the Pension Plan of Management Personnel established by the Act respecting the Pension Plan of Management Personnel (chapter R-12.1).

The Fund shall not exercise the powers provided in paragraph a except with the approval of the Government and upon such conditions as it determines.

The Fund shall use the sums it has received under paragraph c in accordance with the retirement plan contemplated therein.

1969, c. 50, s. 5; 1973, c. 11, s. 10; 1973, c. 12, s. 184; 1975, c. 19, s. 7; 1986, c. 89, s. 50; 1988, c. 84, s. 700; 2001, c. 31, s. 213.

20.1. The Fund may also, on the conditions prescribed by regulation, receive on deposit any sum of money from a public body designated by regulation or belonging to a category of public bodies authorized by regulation, or from a pension fund of such a public body.

The following are public bodies: government agencies, municipal bodies, school bodies and health and social services institutions.

1992, c. 22, s. 3; 1992, c. 21, s. 375.

20.2. Government agencies are

(a)  agencies of which the Government or a minister appoints the majority of the members or directors;

(b)  agencies to which, by law, the personnel is appointed in accordance with the Public Service Act (chapter F‐3.1.1);

(c)  agencies whose property or capital stock forms part of the domain of the State;

(d)  agencies at least one-half of whose operating costs are borne directly or indirectly by the Consolidated Revenue Fund or by other funds administered by a public body, or by both at the same time;

(e)  legal persons of which at least one-half of the voting shares form part of the domain of the State or are held by a public body.

1992, c. 22, s. 3; 1999, c. 40, s. 42; 2000, c. 8, s. 242.

20.3. Municipal bodies are: local municipalities, mandatary bodies of a local municipality within the meaning of section 18 of the Act respecting the Pension Plan of Elected Municipal Officers (chapter R-9.3) and supramunicipal bodies within the meaning of sections 18 and 19 of that Act.

1992, c. 22, s. 3.

20.4. School bodies are: school boards, the Comité de gestion de la taxe scolaire de l’île de Montréal, general and vocational colleges, institutions accredited for purposes of subsidies under the Act respecting private education (chapter E-9.1), institutions of higher education more than one-half of whose operating expenses are paid out of the appropriations which appear in the budget estimates tabled in the National Assembly, and any faculty, school or institute of any such institution.

1992, c. 22, s. 3; 1992, c. 68, s. 156, s. 157; 2002, c. 75, s. 33.

20.5. Health and social services institutions are: public institutions contemplated by the Act respecting health services and social services (chapter S‐4.2), private institutions within the meaning of that Act which operate with sums of money from the consolidated revenue fund, regional boards established under that Act and the Corporation d’hébergement du Québec, and public institutions contemplated by the Act respecting health services and social services for Cree Native persons (chapter S‐5), private institutions within the meaning of that Act which operate with sums of money from the consolidated revenue fund, and regional health and social services boards established under that Act.

1992, c. 22, s. 3; 1992, c. 22, s. 29; 1992, c. 21, s. 375; 1994, c. 23, s. 23; 1999, c. 34, s. 53.

21. The administrator of a plan contemplated in section 20 may, with the approval of the Government and upon such conditions as it determines, delegate all or part of his functions to the Fund as regards the administration of the patrimony of such plan and the latter shall have the powers required to exercise such functions.

The Fund shall manage the investments of any plan contemplated by section 20 in accordance with the Supplemental Pension Plans Act (chapter R-15.1), or Division IV of this Act, and, in the case of the investments of the plan contemplated by paragraph c of the said section, taking into account the general standards, if they have been prescribed, made by the pension committee in respect of the funds referred to in paragraph 2 of section 165 of the Act respecting the Government and Public Employees Retirement Plan (chapter R-10).

However, in the case of funds derived from a plan established by decree in the construction industry, priority must be given to investments promoting such industry.

1969, c. 50, s. 5; 1973, c. 12, s. 185; 1983, c. 24, s. 80; 1989, c. 38, s. 267; 1992, c. 22, s. 4.

22. For the management of deposits and investments, and for the purpose of determining the respective rights of the depositors, the Fund shall establish common funds comprising a general fund, segregated funds and specific investment portfolios, and separate funds comprising individual funds and portfolios under separate management.

The general fund, individual funds and portfolios under separate management contain diversified investments; the segregated funds and specific investment portfolios contain only one category of investment.

The segregated funds, specific investment portfolios and individual funds receive only participation deposits; the general fund receives demand deposits, term deposits and participation deposits.

Participation deposits do not bear interest; they constitute a participation of their holders in the net equity and in the net revenues of the fund or portfolio in which they are made, calculated after deduction of the reserves, charges and fees which the Fund considers appropriate, and the holders of participation deposits share the net equity and net revenues so calculated.

Demand deposits and term deposits bear interest and constitute an indebtedness of the Fund to the depositors.

Specific investment portfolios may receive no deposits other than a deposit from a fund.

The general fund may receive demand deposits and term deposits from the Fund’s various funds, portfolios and subsidiaries.

1965 (1st sess.), c. 23, s. 19; 1969, c. 27, s. 4; 1969, c. 50, s. 6; 1977, c. 62, s. 6; 1992, c. 22, s. 5.

23. The Fund shall establish by regulation

(a)  the rules relating to its internal management and its commercial affairs;

(b)  the cases and conditions of the exceptions authorized under section 15.2;

(c)  the public bodies or categories of public bodies and the pension funds of such bodies from which it may receive sums of money on deposit under section 20.1;

(d)  the terms and conditions of the various types of deposits it offers, in particular the method of calculating the rates of interest payable on demand deposits and term deposits;

(e)  the terms and conditions of the various funds and portfolios;

(f)  the method of calculating the charges, fees and reserves;

(g)  the instruments and contracts of a financial nature authorized under paragraph d of section 33.1, and the framework for using the instruments and contracts referred to in section 33.1;

(h)  (paragraph repealed);

(i)  the other provisions of this Act to which the legal persons mentioned in the first paragraph of section 37.1 are not subject;

(j)  the structures referred to in the last paragraph of section 37.1.

1965 (1st sess.), c. 23, s. 20; 1969, c. 27, s. 4; 1977, c. 62, s. 7; 1992, c. 22, s. 6; 1997, c. 88, s. 3.

DIVISION IV INVESTMENTS

24. The Fund may, without restriction, acquire and hold:

(a)  bonds issued or guaranteed by Québec;

(b)  bonds issued or guaranteed by the Government of Canada or of any province of Canada;

(c)  bonds issued by any other government;

(d)  bonds of the International Reconstruction and Development Bank, the European Reconstruction and Development Bank, the Inter-American Development Bank and the Asian Development Bank.

For the purposes of this section, all securities issued or guaranteed by any government, including treasury bonds, short-term notes and deposit certificates, whether negotiable or not, shall be regarded as bonds.

1965 (1st sess.), c. 23, s. 21; 1969, c. 27, s. 5; 1992, c. 22, s. 7.

25. The Fund may also, without restriction, acquire and hold:

(a)  bonds secured by the transfer to a trustee of an undertaking of the Gouvernement du Québec to pay sufficient annual subsidies for the payment of interest and capital at maturity, and

(b)  bonds of a public authority having as its object the operation of a public service and entitled to impose a tariff for such service.

1965 (1st sess.), c. 23, s. 22; 1977, c. 5, s. 14.

26. The Fund may acquire and hold, upon the following conditions, bonds or other evidences of indebtedness issued or guaranteed by a public body:

(a)  it shall not acquire more than 50% of any issue of a municipal body, a school body or a health or social services institution at the time such issue is put on the market;

(b)  notwithstanding paragraph a, the Fund may acquire up to 100% of an issue where that issue is made following a call for bids to several financial intermediaries.

1965 (1st sess.), c. 23, s. 23; 1969, c. 27, s. 6; 1972, c. 60 s. 47; 1976, c. 39, s. 13; 1977, c. 5, s. 14; 1988, c. 84, s. 700; 1992, c. 22, s. 8; 1992, c. 21, s. 375.

27. The Fund may acquire and hold bonds or other evidences of indebtedness issued by a legal person:

(a)  if they are fully secured by hypothec on landed property and equipment or by hypothec on evidences of indebtedness acceptable as investments for the Fund; or

(b)  if they are secured by hypothec on equipment and the legal person has paid in full the interest on its other debts during the ten years preceding the acquisition; or

(c)  if they are issued or fully guaranteed by a legal person whose common or preferred shares may be acquired and held by the Fund under section 30 or 31.

1965 (1st sess.), c. 23, s. 24; 1969, c. 27, s. 7; 1992, c. 22, s. 9; 1992, c. 57, s. 450; 1999, c. 40, s. 42.

28. The Fund may, without restriction, acquire and hold hypothecs upon landed property if payment of the capital and interest is insured by the Government of Canada or of Québec.

The acquisition of other hypothecs shall be subject to the following restrictions:

(a)  the Fund may not acquire or hold a conventional hypothecary debt the amount of which exceeds 75 % of the value of the landed property securing payment thereof, after deduction of the other claims secured by that landed property which have the same rank as or a prior rank to the Fund’s hypothec, except in the following cases:

i.  the excess amount is guaranteed or insured by the government of Québec, of Canada or of a province, the Canadian Mortgage and Housing Corporation, the Société d’habitation du Québec or an insurance company authorized to issue hypothecary insurance policies;

ii.  the excess amount is secured by hypothec or another charge on a security which the Fund may otherwise acquire or hold;

(b)  the amount of each hypothec on an immovable constituting a single undertaking shall not exceed 1 % of the total assets of the Fund;

(c)  (subparagraph repealed).

1965 (1st sess.), c. 23, s. 25; 1969, c. 27, s. 8; 1992, c. 22, s. 10; 1995, c. 33, s. 20; 1999, c. 40, s. 42.

29. The Fund may acquire and hold immovables upon the following conditions:

(a)  the total investment in each immovable constituting a single undertaking shall not exceed 1% of the total assets of the Fund;

(b)  (paragraph repealed);

(c)  the total investment of the Fund in immovables and in hypothecs referred to in section 28 outside the territory of the member countries of the North American Free Trade Agreement shall not exceed, in net value, 5% of its total assets.

1965 (1st sess.), c. 23, s. 26; 1969, c. 27, s. 9; 1970, c. 18, s. 2; 1992, c. 22, s. 11; 1997, c. 88, s. 4.

30. The Fund may acquire and hold preferred shares of a legal person whose common shares are a qualified investment under section 31.

1965 (1st sess.), c. 23, s. 27; 1970, c. 18, s. 3; 1987, c. 83, s. 1; 1992, c. 22, s. 12.

31. The Fund may also acquire and hold common shares of

(a)  a legal person whose principal object is to invest in immovable property or to carry on one or more activities or operate businesses relating to immovable property, or whose principal object is to acquire and hold, directly or indirectly, the shares and other securities of such legal persons;

(b)  a legal person whose shares have a potential for yield or growth;

(c)  (subparagraph replaced);

(d)  (subparagraph replaced).

The Fund may acquire and hold units of indexed funds.

1965 (1st sess.), c. 23, s. 28; 1970, c. 18, s. 4; 1987, c. 83, s. 2; 1992, c. 22, s. 13; 1997, c. 88, s. 5.

31.1. In the investments referred to in sections 27 to 32, the Fund shall, in respect of all the assets, act as a prudent and reasonable person would have done in similar circumstances.

1984, c. 50, s. 1; 1992, c. 22, s. 14; 1997, c. 88, s. 6.

32. The acquisition by the Fund of shares and of evidences of indebtedness in legal persons shall be subject to the following restrictions:

(a)  it may not hold more than 30% of the common shares or of a class of common shares of one legal person, except in the case of a legal person to which subparagraph a of the first paragraph of section 31 applies;

(b)  it may not invest more than 70% of its total assets in units of indexed funds and common shares;

(c)  it may not acquire securities which increase its total investment in shares and evidences of indebtedness issued by the same legal person to more than 5% of its total assets, except in the case of a legal person to which subparagraph a of the first paragraph of section 31 or the first paragraph of section 37.1 applies.

For the purposes of the 30% limit fixed in paragraph a, the investments, operations or loans made under section 34 are subject to that limit only from the time they are converted into common shares.

1965 (1st sess.), c. 23, s. 29; 1969, c. 27, s. 10; 1970, c. 18, s. 5; 1992, c. 22, s. 15; 1997, c. 88, s. 7.

33. The Fund may make loans secured by hypothec on securities which it may acquire and hold.

1965 (1st sess.), c. 23, s. 30; 1992, c. 57, s. 451; 1997, c. 88, s. 8.

33.1. The Fund may, within the framework for use determined by regulation and with no other restriction, acquire, hold, sell, invest in or conclude

(a)  options and futures contracts;

(b)  currency exchange agreements;

(c)  interest rate exchange agreements;

(d)  any other instrument or contract of a financial nature determined by regulation.

The Fund may dispose of the instruments, contracts and investments referred to in this section or terminate, according to their terms, contracts or agreements concluded in accordance with this section upon such conditions and for such amounts as it considers most advantageous.

1992, c. 22, s. 16.

33.2. The Fund may, without restriction, make deposits with financial institutions.

1992, c. 22, s. 16.

34. The Fund may make any investments, operations or loans other than those which it is authorized to make under the preceding sections, subject to the following restrictions:

(a)  the total amount invested in investments, operations and loans under this section shall not exceed 10 % of the Fund’s total assets;

(b)  under this section, the Fund may not invest more than 1 % of its total assets in one legal person, in an immovable constituting a single undertaking, in a debt secured by any such immovable or in a loan secured by securities of one legal person or by a debt secured by an immovable constituting a single undertaking;

(c)  the Fund may not, under this section, derogate from section 32.

1965 (1st sess.), c. 23, s. 31; 1969, c. 27, s. 11; 1987, c. 83, s. 3; 1992, c. 22, s. 17.

35. The Fund may receive and hold a hypothec on any securities as a guarantee for the performance of a contractual obligation other than the repayment of a loan or as an additional security for the repayment of a loan it makes; if it realizes upon its security and if such securities are securities which it may not hold under sections 27 to 33, it may not hold them for more than four years without regarding them as investments made under section 34.

1970, c. 18, s. 6; 1992, c. 57, s. 452; 1997, c. 88, s. 9.

36. A security held by the Fund as a result of the reorganization or winding-up of a legal person, the amalgamation of legal persons or the realization of a security securing an investment of the Fund, and that could not otherwise be held by the Fund under this Act, may not be held by the Fund for more than four years.

As well, a security held by the Fund as a result of the exercise or realization, on the initiative of the Fund or otherwise, of contractual rights or obligations, and that could not otherwise be held by the Fund under this Act, may not be held by the Fund for more than four years.

1965 (1st sess.), c. 23, s. 32; 1980, c. 11, s. 36; 1992, c. 22, s. 18; 1997, c. 88, s. 10.

36.1. For the purposes of the acquisition, holding or disposal of investments under this Act, the Fund is authorized to engage in any activity or operation that allows the value of the investment to be protected or enhanced, or that is aimed at deriving the best possible financial return from the investment.

1997, c. 88, s. 11.

36.2. The Fund shall, annually, adopt an investment policy under which the distribution of assets among shares and titles of indebtedness of legal persons is in keeping with the practices of major North American pension funds.

The policy must also take into account the financing needs of the public sector and economic development of Québec.

1997, c. 88, s. 11.

37. (Repealed).

1965 (1st sess.), c. 23, s. 33; 1969, c. 27, s. 12; 1988, c. 64, s. 587; 1992, c. 22, s. 19.

DIVISION IV.1 SPECIALIZED ENTITIES

1992, c. 22, s. 20.

37.1. The Fund may, without restriction, acquire and hold any or all of the shares or other securities of a legal person

(a)  whose principal activity consists in acquiring, holding or investing in mineral, oil or gas resources, in administering such resources and in developing them through third persons;

(b)  whose principal activity consists in acquiring or managing investments in risk capital;

(c)  whose principal activity consists in acquiring, guaranteeing and holding securitized assets and derived products, in mounting asset securitization operations or in offering, managing or distributing securitized assets;

(d)  whose principal activity consists in holding shares or other securities of a legal person described in this section, or in holding international investments, capital interests or private investments, which may include securities listed on a stock exchange, to the extent that the Fund is authorized to hold such investments directly;

(e)  whose principal activity consists in acquiring, holding and administering hypothecary claims, portfolios of hypothecary claims or interests in such claims or portfolios, in addition to guaranteeing them;

(f)  whose principal activity consists in investing in legal persons or entities that offer, sell or distribute financial products or services, as well as in any legal person or entity that holds or manages such legal persons or entities;

(g)  whose principal activity consists in offering and providing fund management services, by engaging in any form of investment or type of investment activity;

(h)  whose principal activity consists in offering and providing investment-related services with respect to funds from outside Québec, such as risk management, specific risk management, calculation of return and asset distribution.

Where the Fund holds more than 30 % of their common shares, the legal persons mentioned in the first paragraph may not acquire or hold investments which the Fund may not acquire or hold under the provisions of Division IV; where all their common shares are held by the Fund, such legal persons are subject to the provisions of this Act, with the necessary modifications, except the provisions of sections 1, 2 and 5 to 14.1, Division III, Division VI and any other provision prescribed by regulation.

Where the Fund holds more than 30 % of their common shares, all the legal persons to which subparagraph a of the first paragraph applies may not acquire or hold resources which represent more than 3 % of its total assets.

For the purposes of section 32, the Fund shall include in its own investments the proportion attributable to it of the common shares and other securities of a legal person held by a legal person mentioned in the first paragraph where more than 30 % of the common shares of that legal person are held by the Fund, or of the common shares and other securities of a legal person held by a legal person held by another legal person to which subparagraph d of the first paragraph applies and in which the Fund holds more than 30 % of the common shares.

Notwithstanding the second and fourth paragraphs of this section, paragraph a of section 32 does not apply where the investment in common shares or other securities is made as part of a start-up or pre-start-up phase, to ensure or maintain operations, or to foster continuity, transition, reorganization or growth prior to a public issue. It also does not apply in respect of any new investment holding structure or fund management structure provided for by regulation. The investments made under this paragraph must be consistent with the policy established by the Fund in their regard. The investments shall be made for a period not exceeding five years and the Fund’s policy shall establish the conditions and authorizations to be obtained beyond that period. The policy and any amendment to it must be made public by the Fund within 30 days.

1992, c. 22, s. 20; 1997, c. 88, s. 12.

DIVISION V CONFLICTS OF INTEREST

38. The Fund shall not make a loan to a member of its board of directors or to any of its officers or to the spouse or child of any of them.

1965 (1st sess.), c. 23, s. 34.

39. The Fund shall not make a loan to any legal person of which a director is a member of the National Assembly, or acquire, hold or take as security any securities issued by any such legal person.

This section shall not apply to the acquisition of shares and bonds of a legal person whose shares are listed on a recognized stock exchange.

1965 (1st sess.), c. 23, s. 35; 1968, c. 9, s. 85, s. 90; 1992, c. 22, s. 21.

40. The Fund shall not make any financial transaction with an enterprise to which any of its officers or employees, any member of its board of directors, or any member of the National Assembly is related.

For the purposes of this section, the following shall be related persons:

(a)  individuals connected by blood relationship, marriage, civil union, de facto union or adoption;

(b)  a partnership and an individual who is a member thereof or with whom one or more partners are so connected or by whom more than one-half of its available property has been advanced;

(c)  a legal person and an individual who directly or indirectly controls it or who holds more than one-half of its capital stock or who has provided it, by loan or otherwise, with more than one-half of the property which it has available for its business;

(d)  legal persons directly or indirectly controlled by the same person or group of persons;

(e)  a legal person and a person who is one of several related persons by whom such legal person is directly or indirectly controlled.

For the purposes of this section:

(a)  persons are connected by blood relationship if one is the descendant of the other, or is his brother or sister;

(b)  persons are connected by marriage, a civil union or a de facto union if one is connected with the other or with a person who is connected with the other by blood relationship or by adoption; and

(c)  persons are connected by adoption if one has been adopted, legally or de facto, and would be connected with the other by blood relationship if his filiation by adoption were filiation by blood.

1965 (1st sess.), c. 23, s. 36; 1968, c. 9, s. 86, s. 90; 1982, c. 17, s. 39; 1992, c. 22, s. 22; 2002, c. 6, s. 87.

41. No officer or employee of the Fund, member of its board of directors, or person who performs services for it or is associated with its activities, shall make use, for trading in securities or carrying out any other financial transaction on his own account, of any information received respecting the operations of the Fund.

The Fund may, by regulation, prescribe accessory provisions or means of verification in order to ensure compliance with this section.

1965 (1st sess.), c. 23, s. 37.

42. Every member of the board of directors shall, at the time he assumes his duties and every year thereafter, forward to the Minister of Finance and to the board of directors a list of his interests in any legal persons and a list of such interests as his spouse may have together with a statement of all transactions which have changed such lists during the year.

Every officer of the Fund shall be subject to this section in cases provided for by the regulations of the Fund or on written application of the General Manager.

Information furnished under this section shall be privileged and no one shall communicate such information or allow it to be communicated to any person not legally entitled thereto.

1965 (1st sess.), c. 23, s. 38; 1992, c. 22, s. 23.

DIVISION VI ANNUAL REPORT

43. The fiscal year of the Fund shall be the calendar year.

1965 (1st sess.), c. 23, s. 39.

44. The Fund shall, before 15 April each year, submit to the Minister of Finance a report on its operations for the previous year.

Such report shall be forthwith laid before the National Assembly, if in session, or, if not, within 15 days after the opening of the next session.

1965 (1st sess.), c. 23, s. 40; 1968, c. 9, s. 90; 1992, c. 22, s. 24; 1997, c. 88, s. 13.

45. Not later than two weeks after the tabling of its annual report, the Fund shall also submit to each depositor and to each administrator of a supplemental pension plan contemplated in section 21, a detailed report of the management of its patrimony for the preceding year.

Not later than two weeks after the tabling of its annual report, it must also submit to the Commission de la construction du Québec a detailed report of the management of its assets for the preceding year.

The Commission de la construction du Québec may give its opinion to the Fund on any question respecting the application of sections 20 and 21; the Commission de la construction du Québec may exercise any other attributions of a consultative nature in such matters as the Government may confer on it.

1969, c. 50, s. 7; 1975, c. 19, s. 8; 1986, c. 89, s. 50; 1992, c. 22, s. 25.

46. The annual report of the Fund shall contain:

(a)  a summary of operations and a statement of policies pursued;

(b)  audited financial statements drawn up in accordance with generally accepted accounting principles;

(c)  a detailed statistical statement respecting each class of securities, showing the average yield for each class;

(d)  an annual statement of each immoveable acquired or held by the Fund;

(e)  the annual average yield of participation deposits;

(f)  a description of the operations carried out in respect of the management of depositors’ funds;

(g)  a list of the securities held by the Fund pursuant to section 36 for more than two years;

(h)  a statement of the investments of which a proportion is attributable to the Fund pursuant to the fourth paragraph of section 37.1;

(i)  a statement of the investments made under the last paragraph of section 37.1.

1965 (1st sess.), c. 23, s. 41; 1969, c. 27, s. 13; 1969, c. 50, s. 8; 1977, c. 62, s. 12; 1992, c. 22, s. 26; 1997, c. 88, s. 14.

47. For the purposes of the limits expressed as a percentage of the total assets of the Fund, investments shall be entered at cost price.

1965 (1st sess.), c. 23, s. 42; 1992, c. 22, s. 27.

48. The Auditor General shall audit that Fund’s accounts and his report shall accompany the annual report of the Fund.

The Auditor’s report shall mention every investment and financial transaction which is not in compliance with this Act.

1965 (1st sess.), c. 23, s. 43; 1970, c. 17, s. 102.

49. The Fund shall furnish the Minister of Finance with any information respecting its operations which he may require.

1965 (1st sess.), c. 23, s. 44.

DIVISION VII MISCELLANEOUS

50. Every person who knowingly contravenes any provision of sections 38 to 42 is liable to a fine of $200 to $10 000.

1965 (1st sess.), c. 23, s. 45; 1990, c. 4, s. 117.

51. No provision of this Act shall invalidate the Fund’s title to any property.

1965 (1st sess.), c. 23, s. 46.

52. (This section ceased to have effect on 17 April 1987).

1982, c. 21, s. 1; U. K., 1982, c. 11, Sch. B, Part I, s. 33.

REPEAL SCHEDULE

In accordance with section 17 of the Act respecting the consolidation of the statutes (chapter R-3), chapter 23 of the statutes of 1965 (1st session), in force on 31 December 1977, is repealed, except sections 47 and 48, effective from the coming into force of chapter C-2 of the Revised Statutes.