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Principal Protected Notes Regulations

Version of section 1 from 2011-11-01 to 2022-06-28:

Marginal note:Definitions

 The following definitions apply in these Regulations.


institution means


interest, in relation to a principal protected note, includes any return payable under the note by an institution in respect of the principal. (intérêt)

principal protected note

principal protected note means a financial instrument that is issued in Canada by an institution to an investor and that

  • (a) provides for one or more payments to be made by the institution that is determined, in whole or in part, by reference to an index or reference point, including

    • (i) the market price of a security, commodity, investment fund or other financial instrument, and

    • (ii) the exchange rate between any two currencies; and

  • (b) provides that the principal amount that the institution is obligated to repay at or before the note’s maturity is equal to or more than the total paid by the investor for the note.

A principal protected note does not include a financial instrument that specifies that the interest or return on the instrument is solely determined on the basis of a fixed rate of interest or return or a variable rate of interest or return that is calculated from the institution’s prime lending rate or bankers’ acceptance rate. (billet à capital protégé)

  • SOR/2011-98, s. 10

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