Order in Council (O.C. 1519-2024) amends Quebec’s financial regulations, specifically impacting the rules governing ownership and securities holding for various financial institutions. This order amends regulations tied to several legislative acts, including the Insurers Act, Act respecting financial services cooperatives, Deposit Institutions and Deposit Protection Act, and the Trust Companies and Savings Companies Act. These adjustments primarily allow increased ownership and control flexibility under specific conditions for authorized Quebec financial institutions like insurers, deposit institutions, and cooperatives.

The prior regulatory framework imposed a limit on the acquisition and holding of capital securities by these financial entities, generally capping their ownership at 30% of the securities or participations’ value or voting rights. Similarly, these institutions were not permitted to own more than a 30% share of property ownership rights. However, this restriction included a provision to allow ownership up to 50% under specific conditions, such as jointly with affiliated groups. These regulations aimed to prevent excessive market control by any single financial institution, ensuring a stable and balanced financial ecosystem.

Under the updated amendments, Quebec’s authorized financial institutions now have pathways to hold and control up to 100% ownership in certain entities, properties, or securities when they gain full operational control. Specifically, an insurer or financial institution can now acquire full control of a legal person, partnership, or trust if it holds majority ownership and can exert comprehensive control over these entities. Similar exceptions apply to immovable property where institutions may own over 50% if they control the operational use or development of the property.

In addition to ownership limits, the amendments specify operational domains where increased ownership is permissible. An institution can fully acquire companies offering services such as actuarial consulting, IT support, or real estate management. Moreover, financial institutions can now wholly own businesses involved in real estate transactions, such as residential development projects or the leasing of commercial property, promoting growth in Quebec’s real estate sector. Public utility projects are also emphasized, allowing institutions to invest fully in infrastructure beneficial to the community, thus encouraging public-private partnerships and enhancing social services.

These updates are intended to provide greater flexibility for Quebec’s authorized financial institutions in their ownership stakes, aligning with modern financial practices and expanding growth opportunities. These adjustments enable financial institutions to maintain diversified investment portfolios while supporting Quebec’s broader economic development goals.

Quebec (O.C. 1519-2024) October 30, 2024