ATB Financial Regulation (Alta. Reg. 187/1997)

Alta. Reg. 187/1997

Alberta — Regulations

© Published by Alberta King’s Printer Alberta King’s Printer Suite 700, Park Plaza 10611 - 98 Avenue Edmonton, AB T5K 2P7 Phone: 780-427-4952 E-mail: kings-printer@gov.ab.ca Shop on-line at kings-printer.alberta.ca Province of Alberta Office Consolidation Alberta Regulation 187/1997 With amendments up to and including Alberta Regulation 2/2025 Current as of January 29, 2025 ATB FINANCIAL ACT ATB FINANCIAL REGULATION

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Note All persons making use of this consolidation are reminded that it has no legislative sanction, that amendments have been embodied for convenience of reference only. The official Statutes and Regulations should be consulted for all purposes of interpreting and applying the law.

(Consolidated up to 2/2025) ALBERTA REGULATION 187/97 ATB Financial Act ATB FINANCIAL REGULATION Table of Contents 1

Definitions 2

Interpretation 2 . 1 Corporations prescribed for

section 19(4)(

l) of the Act 3 Significant borrower prescribed amounts 4 Trustee powers 5 Limitation on real e state investments 5 . 1 Leasing and related agreements 6 Limitation on equity investments 7 Combined limitation 8 Connected persons 9 Mortgage investments 9 . 2 Extra-provincial sy ndicated loan agreements 9.3 Special purpose vehicles 1 0 Hedging agreements 1 1 Deposit guarantee fee 11.1 Financial charges by Crown 11.2 Business charges 11.3 Aspects of and charges for general supervision 11.4 Requirements for payment of charges 1 2

Definitions 1 3 Related party status 1 4 General prohibition 1 5 Person previously a related party 1 6 Exceptions 1 7 Form of approval 1 8 Limits 1 9 Transactions with Crown 2 0 Notice of contravention 2 1 Onus 2 2 Conduct review committee and procedures 23.1 Guidelines 23.2 Compliance with legisl ation and guidelines 2 9 Liquidity investments

Section 1 AR 187/97 ATB FINANCIAL REGULATION 2 29.1 Treatment of larger unclaimed balances 29.2 Treatment of small unclaimed balances 30.1 Transitional — unclaimed balances 3 1 Consequential amendment 31.1 E x p i r y 3 2 Coming into force

Definitions 1(1) In this Regulation, (a) “ATB” means ATB Financial; (a.1) “bank”, without limiti ng

section 28(1)(

d) of the

Interpretation Act, includes a bank named in

Schedule III to the Bank Act (Canada); (a.2) “financial futures agreem ent” 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 b a n k , (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 cen tral 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 i ncorporated 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

Section 1 AR 187/97 ATB FINANCIAL REGULATION 3 (

v) a securities dealer within the meaning of the Securities Act; (b.1) “fiscal year” m eans ATB’s fiscal year; (c) “forward contract” mean s 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 gu idelines 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 restr icted 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 agreeme nt 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

Section 1 AR 187/97 ATB FINANCIAL REGULATION 4 the raising of money for the purpose of financing those activities; (c) “financial leasing corpora tion” 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 th at 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 th e 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;

Section 1 AR 187/97 ATB FINANCIAL REGULATION 5 (h) “portfolio management corp oration” means a corporation that is registered as a portfolio manager under the Securities Act; (i) “real property broker age 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) A T B , (ii) a financial institution that is affiliated with ATB, or (iii) a corporation in which A TB 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

Section 2 AR 187/97 ATB FINANCIAL REGULATION 6 (iii) are not subordinate to any other money deposited with ATB. AR 187/97 s1;54/98;164/2002;110/2004;169/2006;240/2020

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 wi th 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 d eemed to control any entity that is controlled or deemed to be controlled by a subsidiary of the holding corporation; (

e) an entity that controls ano ther 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,

Section 2 AR 187/97 ATB FINANCIAL REGULATION 7 (ii) that other and one or more corporations each of which is controlled by that other, or (iii) 2 or more corporations eac h of which is controlled by that other, o r (

b) it is a subsidiary of a cor poration 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 beneficial ly 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 beneficial ly 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, unless otherwise expressly provided in this Regulation.

(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

Section 2.1 AR 187/97 ATB FINANCIAL REGULATION 8 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. AR 187/97 s2;155/2020 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(1) The following are the prescribed transactions in respect of which ATB may act as a trustee for a trust: (

a) a self-directed registe red income fund under the Income Tax Act (Canada);

Section 5 AR 187/97 ATB FINANCIAL REGULATION 9 (

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; (

e) a self-directed registered tax-free savings account under the Income Tax Act (Canada); (

f) a self-directed registered first home savings account under the Income Tax Act (Canada); (

g) any other self-di rected registered fund, plan, account or product that falls under Division G of

Part I of the Income Tax Act (Canada).

(2) The Minister may make guidelines for ATB in respect of a self-directed registered fund, plan, account or product referred to in subsection (1). AR 187/97 s4;110/2004;215/2008;129/2023 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 or by means of a loan workout procedure 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;155/2020 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 agreem ent, 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

Section 5.1 AR 187/97 ATB FINANCIAL REGULATION 10 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 recei vables 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 d irect 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 valu e 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 ente red 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

Section 5.1 AR 187/97 ATB FINANCIAL REGULATION 11 (

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, a n d (iii) is calculated by taking into account (

A) rental charges paid b y 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 responsib ilities of the corporation with regard to the warranties, guarantees or other undertakings referred to in subclause (i);

Section 6 AR 187/97 ATB FINANCIAL REGULATION 12 (

h) the agreement must substanti ally 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 purchas er 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 es timated 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,

Section 7 AR 187/97 ATB FINANCIAL REGULATION 13 (

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 share s 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 or a special purpose vehicle within the meaning of

section 9.3.

(3) Subject to

section 7, ATB shall not (

a) beneficially own participatin g 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;155/2020 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 calculate d under

section 17 of the Act and

section 5(2) of this Regulation, plus (

b) the aggregate value calcula ted 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 affilia te 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,

Section 8 AR 187/97 ATB FINANCIAL REGULATION 14 (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 amount prescribed for the purposes of

section 18(1)(

a) of the Act is such amount as would make ATB’s exposure to the relevant person or connected persons equal to 25% of ATB’s capital within the meaning of the guidelines under

section 20 of the Act.

(4.1) In subsection (4), “ATB’s exposure” to the relevant person or connected persons means the aggregate of (

a) the outstanding balance of principal and interest owing under all loans made by ATB to or in respect of that person or those connected persons, and (

b) the book value of all investments made by ATB in that person or in those connected persons and still held by ATB, but excluding investments referred to in

section 18(2)(

a) and (

b) of the Act and subsection (5) of this section.

(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 th e 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;

Section 8 AR 187/97 ATB FINANCIAL REGULATION 15 (

e) loans that are guaranteed by the Government of Canada or the government of a province; (

f) securities on which payment i s 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 b anker’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 t o 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, banke rs 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;

Section 9 AR 187/97 ATB FINANCIAL REGULATION 16 (

l) a line of credit to a partic ipant 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;63/2009;239/2009 Mortgage investments 9(1) In this section, (a) “alternative finance mortga ge lender” means a subsidiary of ATB that is a corporation referred to in

section 19(4)(j.1) of the Act; (b) “mortgage” means a mortga ge on improved real estate.

(2) Subject to subsections (3) and (4), ATB or an alternative finance mortgage lender may do either of the following: (

a) purchase a mortgage; (

b) make a loan on the security of a mortgage.

(3) An alternative finance mortgage lender may not purchase a mortgage or make a loan on the security of a mortgage unless the mortgage is a residential mortgage.

(4) Where a mortgage is a residential mortgage, the amount paid for or advanced on the mortgage, together with the amount of indebtedness under any other mortgage on the improved real estate that ranks equally with or prior to the mortgage, must not exceed 80% of the market value of the real estate at the time the mortgage is purchased or granted, as the case may be, unless the excess amount is guaranteed or insured by one of the following: (

a) the Government of Alberta; (

b) the Government of Canada; (

c) the government of another province; (

d) an agency of a government referred to in clauses (

a) to (c );

Section 9.2 AR 187/97 ATB FINANCIAL REGULATION 17 (

e) an insurance policy issued by an insurance corporation authorized to carry on business in Canada.

(5) Where the excess amount referred to in subsection (4) 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). (6) Subsection (4) does not apply to a loan made on the security of a mortgage to the purchaser of improved real estate that ATB or an alternative finance mortgage lender, as the case may be, (

a) acquired for the purpose of protecting its investment, and (

b) in respect of which it is disposing. AR 187/97 s9;110/2004;111/2007;41/2022;2/2025 9.1 Repealed AR 41/2022 s3. Extra-provincial syndicated loan agreements 9.2(1) In this section, “Canadian corporation” means a corporation (

a) incorporated or continued in a jurisdiction in Canada, outside of Alberta, and (

b) whose head office is outside of Alberta.

(2) Subject to subsection (3), ATB may enter into a syndicated loan agreement with one or more financial institutions in respect of a Canadian corporation if the corporation operates in Alberta.

(3) ATB’s participation in syndicated loan agreements under subsection (2) must not exceed in the aggregate 10% of the total amount of commercial loans made by ATB at any one time. AR 164/2002 s6;110/2004 Special purpose vehicles 9.3(1) In this section, “special purpose vehicle” means a subsidiary of ATB referred to in subsection (2).

(2) ATB may establish and operate subsidiaries as special purpose vehicles for the purpose of holding and disposing of property acquired through realization of a security interest or by means of a loan workout procedure.

(3) Notwithstanding

section 19(1) of the Act, ATB may beneficially own shares to which are attached more than 10% of the

Section 10 AR 187/97 ATB FINANCIAL REGULATION 18 voting rights attached to all of the issued and outstanding voting shares of a special purpose vehicle.

(4) Section 19(2) of the Act does not apply in respect of a special purpose vehicle.

(5) Section 2(7) does not apply in respect of a special purpose vehicle. AR 155/2020 s5 Hedging agreements 10(1) ATB may not enter into derivative contracts, including exchange agreements, financial futures agreements, option agreements and rate agreements or engage in any other similar transactions unless the purpose of the transaction is to manage risks associated with interest rates, exchange rates, equity prices, commodity prices, credit risk or similar risks associated with specific assets or liabilities or groups of assets or liabilities of ATB or its customers.

(2) The board shall establish policies and procedures with respect to the transactions referred to in subsection (1) and shall review those policies and procedures at least once a year. AR 234/99 s2;164/2002;110/2004;169/2006;59/2008;240/2020 Deposit guarantee fee 11(1) In this section, “deposits” means (

a) money whose repayment, taking into account

section 1(3), is guaranteed by

section 14(1) of the Act, and (

b) negotiable instruments specified by notice in writing given by the Minister to ATB for the purposes of this subsection.

(2) ATB shall, before July 1 in each year, pay to the Minister in respect of the previous fiscal year the fee required by

section 14(2) of the Act, in the aggregate of the following amounts based on deposits held by ATB: (

a) for deposits that do not exceed $100 000 or for those portions of deposits exceeding $100 000 that do not exceed $100 000, the lesser of (

i) an amount equal to the total of those deposits or those portions of those deposits multiplied by Canada Deposit Insurance Corporation’s rate for a deposit-taking institution with a similar risk profile as ATB, as determined by the Minister, and

Section 11.1 AR 187/97 ATB FINANCIAL REGULATION 19 (ii) an amount equal to 1/6 of 1% of all those deposits or those portions of those deposits; (

b) for those portions of deposits exceeding $100 000 that do exceed $100 000, an amount equal to 1/6 of 1% of all those excess portions.

(3) For the purposes of subsection (2), the amounts of the respective deposits are to be (

a) based on the amount repor ted in ATB’s audited annual financial statements except that the Minister may, for those purposes, accept estimates prepared by ATB of the amounts of the deposits to the extent that they are not so reported, and (

b) subject to clause (a), cal culated in accordance with methodology approved by the Minister.

(4) Repealed AR 63/2009 s3.

(5) A notice under subsection (1)(

b) is deemed to be a document incorporated in this Regulation for the purposes of

section 1(1)(

f) of the Regulations Act, but the Minister shall ensure that its contents are given publicity in such a form as the Minister considers likely to make it available, generally, to all persons likely to be affected by it. AR 187/97 s11;164/2002;110/2004;169/2006;63/2009 Financial charges by Crown 11.1 The charges referred to in

section 14.1(1) of the Act and sections 11.2 and 11.3 (in those sections referred to as “charges”) are payable with respect to (

a) ATB’s conducting its businesses generally, and (

b) the Minister’s gene ral supervision of ATB. AR 239/2009 s3 Business charges 11.2 The charges under

section 11.1(

a) are to be in an amount equal to 23% of ATB’s consolidated net income as reported in its audited annual financial statements for each fiscal year, and are payable before July 1 in the fiscal year following that in respect of which each charge is payable. AR 239/2009 s3

Section 11.3 AR 187/97 ATB FINANCIAL REGULATION 20 Aspects of and charges for general supervision 11.3 The Minister is authorized to do any of the things mentioned in

section 34(1)(k.1) of the Act and ATB shall, each fiscal year before such date as is directed by the Minister, pay the Crown such amount for charges under

section 11.1(

b) as the Minister directs it in writing representing the costs incurred by the Minister in exercising the Minister’s general supervision of ATB and shall make the payment in the manner directed by the Minister. AR 239/2009 s3 Requirements for payment of charges 11.4 The charges must, as directed by the Minister, be paid in the form of (

a) subordinated debt issued by ATB, or (

b) cash. AR 239/2009 s3;240/2020

Definitions 12 In sections 13 to 22, (a) “fair market rate” means (

i) in respect of a guarantee, investment in securities or other transaction for which there is a competitive or open market, the most probable price in terms of money that should be obtained for that guarantee, investment in securities or other transaction under all conditions requisite to a fair transaction, with both the seller and buyer acting prudently and knowledgeably, or (ii) in respect of a guarantee , investment in securities or other transaction for which there is not an open and competitive market, a consideration that might reasonably be expected to be obtained for that guarantee, investment in securities or other transaction in an arm’s length transaction between willing parties to a similar transaction; (b) “senior officer” of a corporation means (

i) a person who is both a director and a full-time employee of the corporation, (ii) the chief executive offi cer, chief operating officer, president, secretary, treasurer, controller, chief

Section 13 AR 187/97 ATB FINANCIAL REGULATION 21 financial officer, chief inspector or chief actuary of the corporation, (iii) an individual who per forms functions for the corporation similar to those performed by a person referred to in subclause (ii), (iv) the head of the stra tegic planning unit of the corporation, (

v) the head of the unit of the corporation that provides legal services or human resources services to the corporation, or (vi) any other officer who reports directly to the corporation’s board of directors, chief executive officer or chief operating officer. Related party status 13(1) For the purposes of the Act and this Regulation and subject to this section, a person is a related party with respect to ATB if that person (

a) is a director or se nior officer of ATB, (

b) holds or is a beneficial ow ner of shares of an affiliate of ATB to which are attached 10% or more of the voting rights attaching to all of the outstanding voting shares of the affiliate, (

c) is the Auditor General or a senior or executive manager employed in the Office of the Auditor General who is actually engaged in auditing ATB or any of its affiliates, (

d) is an individual who is the agent of the Auditor General o r a partner in a firm that is agent of the Auditor General, if that person is actually engaged in auditing ATB or any of its affiliates, (

e) is a spouse or adult interd ependent partner of a person referred to in clause (a), (

f) is a relative of, or a relative of the spouse or adult interdependent partner of, a person referred to in clause (a), who has the same home as that person, (

g) is a trust or estate in whi ch a person referred to in clause (a), (

e) or (

f) has a 10% or greater beneficial interest or in respect of which the person serves as a trustee or in a similar capacity,

Section 13 AR 187/97 ATB FINANCIAL REGULATION 22 (

h) is a corporation in which an individual referred to in clause (

a) is the holder or beneficial owner of shares to which are attached 10% or more of the voting rights attaching to all of the outstanding voting shares of the corporation, (

i) is a corporation that is co ntrolled by a person referred to in clause (c), (

d) or (e), (

j) is a corporation in which ATB holds or beneficially owns shares to which are attached 10% or more of the voting rights attaching to all of the outstanding voting shares of the corporation, (

k) is the auditor of a corporation referred to in clause (

j) or is a partner in the firm that is the auditor of the corporation, if that person is actually engaged in auditing the corporation, (

l) i s (

i) a partner of ATB and has a 10% or greater beneficial interest in the partnership, or (ii) a party to and has a 10% or greater beneficial interest in a joint venture agreement to which ATB is also a party, where ATB has a 10% or greater beneficial interest in the partnership or joint venture, as the case may be, (

m) is an affiliate of ATB or a director or senior officer of an affiliate of ATB, or (

n) is designated as a related party under subsection (2).

(2) The Minister may designate any person as a related party of ATB if the Minister is of the opinion that (

a) the person is acting or has acted jointly or in concert with a related party of ATB with respect to the giving of a guarantee, the making of an investment in securities or the entering into of another transaction that would be prohibited or restricted under this

Part if given, made or entered into by or with respect to that related party, or (

b) there exists or has existed between the person and ATB an interest or relationship that might reasonably be expected to affect or that has affected the exercise by ATB of its best judgment with respect to a guarantee, investment in securities or other transaction.

Section 14 AR 187/97 ATB FINANCIAL REGULATION 23

(3) The Minister may, of his own motion or on application by ATB or the related party affected by a designation made under subsection (2), revoke the designation. AR 187/97 s13;109/2003;110/2004 General prohibition 14(1) Except as provided in the Act or this Regulation, (

a) neither ATB nor its subsidi ary shall, directly or indirectly, give any guarantee on behalf of a related party of ATB, (

b) neither ATB nor its subsidi ary shall, directly or indirectly, make an investment in any securities of a related party of ATB, (

c) neither ATB nor its subsidi ary shall, directly or indirectly, enter into any other transaction with a related party of ATB, and (

d) no related party of ATB shall, directly or indirectly, ent er into any other transaction with ATB or its subsidiary. (2) Subsection (1) does not apply to (

a) the payment of remuneration (

i) to the Auditor General, or (ii) to the directors of ATB or its subsidiary if the remuneration has been approved by the Lieutenant Governor in Council, in the case of remuneration paid to a director of ATB, or by ATB, in the case of remuneration paid to a director of its subsidiary, o r (

b) the granting of indemnifi cation in accordance with

section 28 of the Act. AR 187/97 s14;110/2004 Person previously a related party 15(1) Neither ATB nor its subsidiary shall, directly or indirectly, during the 12-month period after a person ceases to be a related party of ATB, (

a) give any guarantee on behalf of, (

b) make an investment in any securities of, or (

c) enter into any other transaction with,

Section 16 AR 187/97 ATB FINANCIAL REGULATION 24 that person that would have been prohibited or that would have required an approval in accordance with procedures required under this Regulation had that person been a related party of ATB at the time of the guarantee, investment or other transaction, unless the proposed guarantee, investment or other transaction is at fair market rate.

(2) A person referred to in subsection (1) shall disclose in writing to ATB the nature of the person’s interest in that guarantee, investment or other transaction forthwith after becoming aware of the facts that bring the person within the application of that subsection. AR 187/97 s15;110/2004 Exceptions 16(1) Subject to the Act and regulations, ATB or its subsidiary may give a guarantee on behalf of, make an investment in the securities of or enter into any other transaction with a related party of ATB if the transaction is at fair market rate and has prior approval of the board.

(2) Subject to the Act and regulations, ATB or its subsidiary may (

a) make a loan to (

i) a director or seni or officer of ATB, (ii) the spouse or adult interdependent partner of a director or senior officer of ATB, or (iii) a relative of, or a rel ative of the spouse or adult interdependent partner of, a director or senior officer of ATB who has the same home as the director or senior officer on the security of the residence of the person to whom the loan is made if the loan qualifies under

section 9 and, except in the case of a loan to a senior officer of ATB, the loan is at fair market rate, (

b) make a personal loan to (

i) a senior officer of ATB, (ii) the spouse or adult interdependent partner of a senior officer of ATB, or (iii) a relative of, or a rel ative of the spouse or adult interdependent partner of, a senior officer of ATB who has the same home as the senior officer,

Section 17 AR 187/97 ATB FINANCIAL REGULATION 25 if, except in the case of a loan to a senior officer of ATB, the loan is at fair market rate, and (

c) enter into an employment contract with a senior officer of ATB or its subsidiary. AR 187/97 s16;109/2003;110/2004 Form of approval 17 Where this Regulation requires that a guarantee, investment in securities or other transaction have the prior approval of the board, the approval (

a) must be given (

i) in writing, (ii) in accordance with the pro cedures established under this Regulation, and (iii) by a person authorized b y the board of directors to give such an approval, a n d (

b) may be given with resp ect to a specific guarantee, investment or transaction or with respect to a class of guarantees, investments or transactions. Limits 18(1) The aggregate of (

a) the outstanding principal and interest owing on all loans to related parties of ATB, (

b) the book value of all curr ent investments in securities of related parties of ATB, and (

c) the contracted amount of all outstanding guarantees on behalf of related parties of ATB, entered into, made or given by ATB and its subsidiaries shall not exceed 2% of the assets of ATB.

(2) Neither ATB nor its subsidiary shall make a loan to or give a guarantee on behalf of a senior officer of ATB or any of its subsidiaries if the aggregate of the outstanding principal and interest owning on all such loans and the contracted amount of all outstanding guarantees to or on behalf of that senior officer would exceed the greater of

Section 19 AR 187/97 ATB FINANCIAL REGULATION 26 (a) $100 000, and (

b) twice the annual salar y of that senior officer.

(3) A loan under

section 16(2)(

a) shall not be counted for the purposes of calculating the limit under subsection (2) of this section.

(4) Neither ATB nor its subsidiary shall give a guarantee on behalf of or make a loan to or an investment in the securities of a related party of ATB who is (

a) a person referred to in

section 21 of the Act, or (

b) a senior officer of ATB or any of its subsidiaries, if the aggregate of (

c) the outstanding principal and interest owing on all loans by ATB and its subsidiaries to all such related parties, (

d) the book value of all current investments by ATB and its subsidiaries in securities of all such related parties, and (

e) the contracted amount of all outstanding guarantees by ATB and its subsidiaries on behalf of all such related parties, would exceed one half of 1% of the assets of ATB. AR 187/97 s18;110/2004 Transactions with Crown 19 Neither ATB nor its subsidiaries shall enter into a business transaction with the Crown in right of Alberta unless the transaction is at fair market rate.

AR 187/97 s19;110/2004 Notice of contravention 20 Where ATB or its subsidiary has given a guarantee, made an investment in securities or entered into any other transaction contrary to this Regulation, ATB shall, forthwith on becoming aware of that fact, notify the Auditor General and the Minister of that fact. AR 187/97 s20;110/2004 Onus 21 For the purposes of the Act and this Regulation, the onus is on the related party and ATB or its subsidiary, as the case may be, to

Section 22 AR 187/97 ATB FINANCIAL REGULATION 27 establish that a particular guarantee, investment in securities or other transaction is in compliance with the Act and this Regulation. AR 187/97 s21;110/2004 Conduct review committee and procedures 22(1) The board shall establish a Governance and Conduct Review Committee consisting of not fewer than 3 members of the board.

(2) At least 2/3 of the members of the Committee must be unaffiliated directors.

(3) The Committee shall not transact any business unless a majority of the members present are unaffiliated directors.

(4) The Committee shall develop for the consideration of the board written review and approval procedures to be followed by ATB to ensure compliance with sections 13 to 21, including procedures respecting the obligations of related parties to disclose information to ATB and procedures respecting approvals under this Regulation.

(5) The procedures may be passed as a by-law under

section 8 of the Act and shall be published in The Alberta Gazette.

(6) The procedures shall, at least once each year, be reviewed by the Committee.

(7) The Auditor General is entitled to attend and be heard at all meetings of the Committee. AR 187/97 s22;110/2004 23 Repealed AR 63/2009 s4. Guidelines 23.1(1) The Minister may make guidelines for ATB on any matter referred to in

section 34(1)(h.2) of the Act and shall make such guidelines on an identified subject-matter where a provision of this Regulation requires guidelines on that subject-matter in order to ensure the efficacy of the provision.

(2) Guidelines (

a) must not be inconsistent with this Regulation, (

b) are deemed to be regulations for the purposes, and only for the purposes, of

section 33 of the Act, and

Section 23.2 AR 187/97 ATB FINANCIAL REGULATION 28 (

c) must contain a commencement date from which they come into effect. AR 164/2002 s9;110/2004 Compliance with legislation and guidelines 23.2(1) ATB shall provide to the Minister a report, in a form satisfactory to the Minister, on its compliance with the Act, the regulations and the guidelines (

a) for the fiscal year to whic h the financial statements submitted under

section 23 of the Act relate, within 90 days after the date on which it submits those financial statements, and (

b) for any other period speci fied by the Minister, if so required by the Minister, on or before the date specified by the Minister.

(2) The Minister shall annually specify subjects on which compliance by ATB with the Act, the regulations and the guidelines is to be the subject of an examination by the person and in the manner decided by the Minister. AR 110/2004 s9 24 to 28 Repealed AR 63/2009 s4. Liquidity investments 29 ATB shall have and keep available unencumbered liquid assets in accordance with the guidelines whose primary subject-matter is liquidity. AR 187/97 s29;54/98;164/2002;110/2004 Treatment of larger unclaimed balances 29.1(1) This

section and

section 29.2 apply with respect to deposits in the form of deposit accounts, bank drafts, certified cheques, money orders or term deposits.

(2) Where (

a) within the past 12 months a customer of ATB (in this

section referred to as “the customer”) has neither transacted any business through an account of that customer held with ATB (in this

section referred to as “the account”) nor provided written acknowledgment to ATB of the balance in the account, and (

b) the balance of the acc ount equals or exceeds $250,

Section 29.1 AR 187/97 ATB FINANCIAL REGULATION 29 ATB shall make reasonable endeavours to locate the customer.

(3) If ATB cannot locate the customer under subsection (2), it shall, within 2 years after the last transaction of any business through the account or the last written acknowledgment of the balance of the account, change the status of the account to “unclaimed”.

(4) ATB shall maintain a record, in relation to the account whose status has changed, of (

a) the name and last-known address of the customer, (

b) the balance of the account, (

c) the type of account, (

d) the date of the change in status, (

e) the branch location of ATB, and (

f) the date of the last tra nsaction or acknowledgment referred to in subsection (3).

(5) The maturing of a deposit placed for a specific term or that matures at a specific date does, and the application of earnings or a service charge to the account by ATB does not, constitute the transaction of business for the purposes of subsections (2) to (4).

(6) At approximately the 2nd and 5th anniversaries of the change in the status of the account under subsection (3), ATB shall make reasonable endeavours to locate the customer if the customer has not been repaid.

(7) For conducting each search under subsections (2) and (6), ATB may impose a reasonable charge against the customer’s balance.

(8) Subject to subsection (7), ATB may only impose those charges in respect of the balance held in the account that would be chargeable to the customer if the account were still active.

(9) ATB shall continue to pay interest on the account at the same rate as would have applied had the account still been active or, if that type of account is no longer offered, the rate for the most closely comparable account currently offered, on the balance transferred for the whole of the period that the money is in the account designated “unclaimed”, but ATB is not required to pay or credit the interest until a claim is paid out or until it has to transfer the money under subsection (12)(b).

(10) Where the balance in the account is claimed by the person entitled to it, ATB shall, if the claim is substantiated by evidence

Section 29.2 AR 187/97 ATB FINANCIAL REGULATION 30 satisfactory to ATB, pay the claimant the amount due on that balance.

(11) ATB shall ensure that details of the payment are recorded and that the payment is authorized in writing by at least 2 officers of ATB.

(12) Before April 30 in the applicable year, if no valid claim has been made, ATB shall (

a) identify the amount that has or should have been held in the account designated “unclaimed” for 10 years following the change in status under subsection (3), and (

b) transfer that amount and the records referred to in subsection (4) to the Minister responsible for the Unclaimed Personal Property and Vested Property Act for administration in accordance with that Act.

(13) To the extent that money is transferred under subsection (12)(b), ATB may not be sued for any claims for that money made after the transfer.

(14) This

section does not apply to any money that is (

a) lawfully retained by ATB under any lien, right of set-off or specific charge, or (

b) retained in a plan registered under the Income Tax Act (Canada).

(15) ATB shall comply with

section 7 of the Unclaimed Personal Property and Vested Property Act. AR 239/2009 s4;240/2020 Treatment of small unclaimed balances 29.2(1) Where (

a) within the past 2 years a cu stomer of ATB (in this

section referred to as “the customer”) has neither transacted any business through an account of that customer held with ATB (in this

section referred to as “the account”) nor provided written acknowledgment to ATB of the balance in the account, and (

b) the balance of the account is less than $250, ATB shall make reasonable endeavours to locate the customer, following which ATB shall comply with

section 29.1 in respect of that balance, hold the balance for the customer as if business were

Section 30.1 AR 187/97 ATB FINANCIAL REGULATION 31 being regularly transacted on the account or proceed in accordance with this section.

(2) Subject to this section, where subsection (1)(

a) and (

b) apply, ATB may, if a valid claim has not been made for the balance, transfer the balance to income of ATB.

(3) Section 29.1(4), (5), (7) and (14) apply to balances transferred to income under subsection (2).

(4) Where a balance that has been transferred to income under subsection (2) is subsequently claimed by the person entitled to it, ATB shall pay the claimant the amount due on that balance with interest at a rate that is not less than that prescribed in

section 29.1(9) for the whole of the period that the money was subject to the transfer.

(5) If the balance transferred to income is not claimed by the person entitled to it within 5 years after the last transaction or acknowledgment referred to in subsection (1), ATB may retain the money and may not be sued for any claims for the money made after the expiration of that period.

(6) Where ATB opts, pursuant to subsection (1), to comply with

section 29.1, the provisions of that section, except

section 29.1(15), apply. AR 239/2009 s4 30 Repealed AR 41/2022 s3. Transitional — unclaimed balances 30.1(1) Notwithstanding

section 29.1(3), the initial date before which a change in the status of an account must be made under that subsection is April 1, 2010.

(2) Notwithstanding

section 29.2(1), the initial date before which there must be compliance with that subsection is April 1, 2010.

(3) The reference in

section 29.2(5) to 5 years after the last transaction or acknowledgment referred to in

section 29.2(1) is to be deemed, initially after the commencement of that subsection, to refer instead to April 1, 2015. AR 239/2009 s5 Consequential amendment 31 The Loan and Trust Corporations Regulation (AR 171/92) is amended in

section 14 by adding the following after clause (b):

Section 31.1 AR 187/97 ATB FINANCIAL REGULATION 32 (

c) Alberta Treasury Branches in respect of its acting as trustee in accordance with the Alberta Treasury Branches Act and regulations. Expiry 31.1 For the purpose of ensuring that this Regulation is reviewed for ongoing relevancy and necessity, with the option that it may be repassed in its present or an amended form following a review, this Regulation expires on January 31, 2030. AR 2/2025 s3 Coming into force 32 This Regulation comes into force on the date the Alberta Treasury Branches Act, Statutes of Alberta, 1997,

chapter A-37.9 comes into force.

Schedule Repealed AR 63/2009 s5.

Printed on Recycled Paper *9780779851447*

Document details

Collection	Alberta — Regulations
Citation	Alta. Reg. 187/1997
Type	regulation
Volume / chapter	1997 187
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	1058f5556494691a89196d80b534a246c37ccdf7

Source file is stored in the law ingest library (pdf).