CRA states that a s. 149(1)(o.2)(iii) corporation is not generally precluded by the permitted investment rule from putting more than 10% of its assets in a single investment

A s. 149(1)(o.2)(iii) corporation is not permitted to make investments that are not permitted under the Pension Benefits Standards Act, 1985 (or similar provincial legislation). For PBSA purposes, the prohibition against a pension plan investing more than 10% of its assets in any one investment is applied at the level of the pension plan, rather than of a subsidiary pension corporation. CRA has determined that the policy intent of the permitted investment rule in s. 149(1)(o.2)(iii) (as well as of similar rules in ss. 149(1)(o.2)(ii)(B) and 149(1)(o.2)(ii.1)(B)(IV)) “is to defer to the investment requirements of the PBSA.” Accordingly, the same approach is to be followed under such s. 149(1)(o.2) provisions, i.e., the pension corporation is not precluded from investing more than 10% of its assets in a single investment.

Neal Armstrong. Summary of 21 December 2016 Internal T.I. 2013-0508321I7 under s. 149(1)(o.2)(iii).