Money Market Mutual Fund Conditions Regulations

Money Market Mutual Fund Conditions Regulations Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 35(1)a of the Canadian Payments Actb, hereby makes the annexed Money Market Mutual Fund Conditions Regulations. S.C. 2001, c. 9, s. 243 S.C. 2001, c. 9, s. 218 Definitions The following definitions apply in these Regulations. approved credit rating, in respect of a security or instrument of a type described in the heading of column 2 or 3 of the schedule, means a rating that has been issued by an approved credit rating organization set out in column 1 of an item of the schedule and that is at or above the rating category set out for that type of security or instrument in column 2 or 3 of that item, or that is at or above a rating category that the approved credit rating organization has adopted to replace that rating category. (note approuvée) approved credit rating organization means Dominion Bond Rating Service Limited; Fitch, Inc.; Moody’s Investors Service, Inc.; Standard & Poor’s Corporation; or a successor of an organization named in any of paragraphs (a) to (d). (agence de notation agréée) Canadian financial institution means any of the following that is authorized to carry on business under the laws of Canada or a province, namely, a bank, an authorized foreign bank, a loan company, a trust company, an insurance company to which the Insurance Companies Act applies, an insurance corporation incorporated by or under an Act of the legislature of a province, a central cooperative credit society, a cooperative credit association, or a local cooperative credit society; Alberta Treasury Branches, established under the Alberta Treasury Branches Act of the Province of Alberta; or the Fédération des caisses Desjardins du Québec. (institution financière canadienne) cash equivalent means an evidence of indebtedness that has a remaining term to maturity of 365 days or less and is issued, or fully and unconditionally guaranteed as to principal and interest by the Government of Canada or the government of a province; by the government of the United States, the government of one of the states of the United States, the government of another sovereign state or a permitted supranational agency, if the evidence of indebtedness has an approved credit rating; or by a Canadian financial institution, or by a financial institution that is not incorporated or organized under the laws of Canada or a province, if the evidences of indebtedness of that issuer or guarantor that are rated as short-term debt by an approved credit rating organization have an approved credit rating. (quasi-espèces) permitted supranational agency means the African Development Bank; the Asian Development Bank; the Caribbean Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; the International Bank for Reconstruction and Development; the International Finance Corporation; or any person that is prescribed for the purpose of subparagraph (g)(v) of the definition foreign property in subsection 206(1) of the Income Tax Act. (organisme supranational accepté) Approved credit rating For the purposes of these Regulations, a security or an instrument is considered to have an approved credit rating only if an approved credit rating organization has issued an approved credit rating for the security or instrument; the approved credit rating organization has not made any announcement that the rating of the security or instrument may be downgraded to a rating category that would not be an approved credit rating; and no approved credit rating organization has rated the security or instrument in a rating category that is not an approved credit rating. Conditions A money market mutual fund must satisfy the following conditions: all of its assets must be invested in one or more of the following, namely, cash, cash equivalents, evidences of indebtedness, other than cash equivalents, that have remaining terms to maturity of 365 days or less, and floating rate evidences of indebtedness not referred to in subparagraphs (ii) and (iii), if the principal amounts of the obligations will continue to have a market value of approximately par at the time of each change in the rate to be paid to the holders of the evidences of indebtedness; its portfolio of evidences of indebtedness must have a dollar-weighted average term to maturity not exceeding 90 days, calculated on the basis that the term of a floating rate obligation is the period remaining to the date of the next rate setting; not less than 95% of its assets must be invested in cash, cash equivalents or evidences of indebtedness denominated in a currency in which the net asset value per security of the mutual fund is calculated; and not less than 95% of its assets must be invested in one or more of the following, namely, cash equivalents, or evidences of indebtedness of issuers whose commercial paper has an approved credit rating. Coming into force These Regulations come into force on November 7, 2001.