Article 4 Classification of a society’s participation in syndicated lending

This article makes provision with respect to the classification, for the purposes of the requirements of Part III for the structure of commercial assets, of a society’s participation under section 14A in syndicated lending.

An advance made by a society as a member of a lending syndicate shall be classified as Class 1 or 2 in accordance with Part III as modified by article 5 below.

Where a society relies on article 3(8) above in determining whether an advance made by it as a member of a lending syndicate is appropriately secured, that advance shall be classified as a Class 2 advance.

A society’s rights as a sub-participant shall be classified as Class 1 or 2 according to whether the corresponding advance made by the participating member of the lending syndicate (as defined in article 3(4) above) would be classified as Class 1 or 2 under Part III (as modified by article 5 below) if it had been made by the society itself as a member of the syndicate.

For the purposes of paragraph (4) above, an advance made by the participating member of the lending syndicate shall be treated as an “advance secured on land” and where any provision of Part III (as modified by article 5 below) requires a society to be satisfied in respect of any matter for the purpose of classifying an advance, the sub-participating society must be so satisfied.