Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
APFF - 1995
Question 32
FAPI rules
The new definition of "investment business" found in subsection 95(1) of the Act excludes a business operated by an affiliate as a foreign bank, a trust company, a credit union, an insurance corporation or a trader or dealer in securities, the activities of which are regulated in the country in which the business is principally carried on (subparagraph 95(1)(a)(i) of the definition of "investment business").
What type of regulation does Revenue Canada require in order for an affiliate to qualify for the exemption provided in paragraph 95(1)(a) of the Act?
Answer by the Department of Revenue
We note that the Act does not specify the type of regulation, stating simply that the activities must be regulated in the country where the business operates. Since the legislation is very recent (Bill C-70 received assent only on June 22, 1995), we have not had an opportunity to consider the various types of regulation than can be found in various countries. In general, we do not expect that foreign regulations governing the activities of the financial institutions operating in a given jurisdiction will be contested. However, it is not possible to confirm that all so-called regulations will be recognized as such.
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© Her Majesty the Queen in Right of Canada, 1995
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