S.18(6) would not apply where a non-resident corporation ("NRP") acquired a security that was not a debt obligation of a Canadian bank or a person not dealing at arm's length with that bank pledged the security to the Canadian bank to secure a guarantee by NRP of a loan made by the Canadian bank to a Canadian subsidiary of NRP. If NRP made additional deposits with a foreign bank as security for a guarantee by that foreign bank of a loan to be made to the Canadian subsidiary by the Canadian bank, such deposits would be considered to be loans to the foreign bank which would not have been made if the Canadian bank did not make its loan, with the result that s. 18(6) would apply. Where the security for such inter-bank guarantee comprised preexisting term deposits which were subsequently "renewed" because the terms of the inter-bank guarantee so required, s. 18(6) would generally apply at the time of the renewal.
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