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ARTICLE · 24 NOVEMBER 2008

OSFI Ruling Regarding A Canadian Subsidiary Assisting A Foreign Bank’s Portfolio Management Services

Borden Ladner Gervais LLP
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The Office of the Superintendent of Financial Institutions (Canada) ("OSFI") has published a ruling that BLG obtained for one of its foreign bank clients that confirms that a Canadian entity that provides back office services to a foreign portfolio manager does not carry on a financial services business within the foreign bank regulation context (the "Ruling").

CanadaFinance and Banking
Rebecca Chan
Rebecca Chan
Andrew Harrison
Andrew Harrison
Donna Spagnolo
Donna Spagnolo
Stephen Redican
Stephen Redican
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The Office of the Superintendent of Financial Institutions (Canada) ("OSFI") has published a ruling that BLG obtained for one of its foreign bank clients that confirms that a Canadian entity that provides back office services to a foreign portfolio manager does not carry on a financial services business within the foreign bank regulation context (the "Ruling").1 This Ruling is of interest to foreign bank groups and their Canadian subsidiaries that wish to provide services to investment funds inside or outside Canada and that wish to have back office services provided from within Canada.

Issue And Implications

The issue was whether the provision of back office services by a Canadian subsidiary of a foreign bank ("FB") to the FB in its offshore portfolio management services to investment funds would deem the subsidiary to be a "financial services entity" pursuant to the Bank Act (Canada). If so, this would subject the FB group to further scrutiny and heavier

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