C-37 1 39 55-56 Elizabeth II 2006-2007

An Act to amend the law governing financial institutions and to provide for related and consequential matters

Financial institutions and to provide for related and consequential matters,

An Act to amend the law governing

Financial Institutions 2007 3 29 6 2007 90390

SUMMARY

This enactment amends a number of Acts governing financial institutions. It also amends legislation related to the regulation of financial institutions. Notable among the amendments are the following:

(

a) amendments to the Bank Act , the Cooperative Credit Associations Act , the Insurance Companies Act , and the Trust and Loan Companies Act aimed at achieving three key objectives:

(

i) enhancing the interests of consumers,

(ii)

increasing legislative and regulatory efficiency, and

(iii)

adapting those Acts to new developments;

(

b) amendments to the Bills of Exchange Act to provide for the introduction of electronic cheque imaging; and

(

c) technical amendments to the Bank Act , the Cooperative Credit Associations Act , the Insurance Companies Act , the Trust and Loan Companies Act , the Bank of Canada Act , the Bills of Exchange Act , the

Canada Business Corporations Act , the Canada Deposit Insurance Corporation Act , the Canadian Payments Act , the Financial Consumer Agency of Canada Act , the Green Shield Canada Act , the Investment Canada Act , the National Housing Act , the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act .

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

PART 1

1991, c. 46

AMENDMENTS TO THE BANK ACT

1999, c. 28, s. 1(5)

The

definitions authorized foreign bank and Canadian entity in

section 2 of the Bank Act are replaced by the following:

authorized foreign bank

banque étrangère autorisée

authorized foreign bank means a foreign bank that is the subject of an order under subsection 524(1);

Canadian entity

entité canadienne

Canadian entity means an entity that is incorporated or formed by or under

an Act of Parliament or of the legislature of a province, or otherwise formed in Canada, and that carries on business in Canada;

Section 9 of the Act is amended by adding the following after subsection (4):

Contravention

(5) A person contravenes a provision of

Part VII or Division 7 of

Part XV if the person agrees to act jointly or in concert with one or more other persons in such a manner that a deemed single person contravenes the provision.

Subsection 14(2) of the Act is amended by striking out the word “or” at the end of paragraph ( f ), by adding the word “or” at the end of paragraph (

g) and by adding the following after paragraph ( g ):

(

h) a bank is continued, or amalgamated and continued, as a body corporate to which another Act of Parliament applies,

2001, c. 9, s. 44; 2006, c. 4, s. 199

Section 21 of the Act is replaced by the following:

Sunset provision

(1) Subject to subsections (2) and (3), banks shall not carry on business, and authorized foreign banks shall not carry on business in Canada, after the day that is the fifth anniversary of the day on which this

section comes into force.

Extension

(2) The Governor in Council may, by order, extend by up to six months the time during which banks may continue to carry on business and authorized foreign banks may continue to carry on business in Canada. No more than one order may be made under this subsection.

Exception

(3) If Parliament dissolves on the fifth anniversary of the day on which this

section comes into force, on any day within the three-month period before that anniversary or on any day within an extension under subsection (2), banks may continue to carry on business, and authorized foreign banks may continue to carry on business in Canada, for 180 days after the first day of the first session of the next Parliament.

Paragraph 39(1)(

f) of the Act is replaced by the following:

(

f) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

2001, c. 9, s. 50

Sections 39.1 and 39.2 of the Act are replaced by the following:

Transferring to other federal Acts

39.1

(1) A bank may

(

a) apply, with the approval in writing of the Minister, under the

Canada Business Corporations Act for a certificate of continuance as a corporation under that Act;

(

b) apply, with the approval in writing of the Minister, under the Canada Cooperatives Act for a certificate of continuance, or a certificate of continuance and a certificate of amalgamation, as a cooperative under that Act;

(

c) apply, under the Cooperative Credit Associations Act , for letters patent continuing the bank as an association under that Act, or amalgamating and continuing the bank as an association under that Act;

(

d) apply, under the Insurance Companies Act , for letters patent continuing the bank as a company (other than a mutual company) or an insurance holding company under that Act, or amalgamating and continuing the bank as a company (other than a mutual company) or an insurance holding company under that Act; or

(

e) apply, under the Trust and Loan Companies Act , for letters patent continuing the bank as a company under that Act, or amalgamating and continuing the bank as a company under that Act.

Conditions for approval

(2) The approval referred to in paragraph (1)(

a) or (

b) may be given only if the Minister is satisfied that

(

a) the bank has published, once a week for four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the bank is situated, a notice of its intention to apply for the approval;

(

b) the application has been authorized by a special resolution; and

(

c) the bank does not hold deposits, other than deposits that are made by a person who controls the bank or by a person who has a significant interest in a class of shares of the bank and that are not insured by the Canada Deposit Insurance Corporation.

Withdrawing application

(3) If a special resolution authorizing the application for the certificate or letters patent so states, the directors of the bank may, without further approval of the shareholders, withdraw the application before it is acted on.

Restriction on other transfers

(4) A bank may not apply to be continued, or to be amalgamated and continued, as the case may be, as a body corporate other than one referred to in subsection (1).

Act ceases to apply

39.2

If a bank applies for a certificate or letters patent referred to in

section 39.1 in accordance with that

section and the certificate is given or the letters patent are issued, this Act ceases to apply to the bank as of the day the certificate or the letters patent take effect.

2001, c. 9, s. 52

Section 41 of the Act is replaced by the following:

Affiliated bank

Despite

section 40, a bank that is affiliated with another entity may, with the consent of that entity, be incorporated with, or change its name to, substantially the same name as that of the affiliated entity.

2005, c. 54, s. 8(2)

Subsection 62(5) of the English version of the Act is replaced by the following:

Material to Superintendent

(5) If the directors exercise their authority under paragraph (1)( b ), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.

The Act is amended by adding the following after

section 72:

Exception — conditions before acquisition

72.1

(1) A bank may permit any of its subsidiaries to acquire shares of the bank through the issuance of those shares by the bank to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares.

Conditions after acquisition

(2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met.

Non-compliance with conditions

(3) If a bank permits any of its subsidiaries to acquire shares of the bank under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite

section 16 and subsection 66(2), the bank must comply with the prescribed requirements.

Section 75 of the Act is amended by adding the following after subsection (4):

Exception

(4.1) Subsection (4) does not apply if

(

a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 308(4); and

(

b) there is to be no return of capital to shareholders as a result of the reduction.

2001, c. 9, s. 61(1)

(1) Subsections 79(1) and (2) of the Act are replaced by the following:

Declaration of dividend

(1) The directors of a bank may declare and a bank may pay a dividend by issuing fully paid shares of the bank or options or rights to acquire fully paid shares of the bank and, subject to subsection (4), the directors of a bank may declare and a bank may pay a dividend in money or property, and if a dividend is to be paid in money, the dividend may be paid in a currency other than the currency of Canada.

Notice to Superintendent

(2) The directors of a bank shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment.

2001, c. 9, s. 61(2)

(2) Subsection 79(5) of the Act is repealed.

2001, c. 9, s. 69

Subsection 159(2) of the Act is replaced by the following:

Residency requirement

(2) At least one half of the directors of a bank that is a subsidiary of a foreign bank and a majority of the directors of any other bank must be, at the time of each director’s election or appointment, resident Canadians.

2001, c. 9, s. 82(2)

Subsection 217(3) of the Act is replaced by the following:

Effective date of by-law

(3) A by-law, or an amendment to or a repeal of a by-law, made under subsection (1) is not effective until it is confirmed or confirmed as amended by the shareholders under subsection (2) and, in the case of a by-law respecting a change to the name of the bank, approved by the Superintendent.

Letters patent

(4) If the name of a bank or the province in Canada in which the head office of the bank is situated is changed under this section, the Superintendent may issue letters patent to amend the bank’s incorporating instrument accordingly.

Effect of letters patent

(5) Letters patent issued under subsection (4) become effective on the day stated in the letters patent.

Section 225 of the Act is replaced by the following:

Approval of agreement by Superintendent

An amalgamation agreement must be submitted to the Superintendent for approval and any approval of the agreement under subsection 226(4) by the holders of any class or series of shares of an applicant is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing.

Paragraph 231(1)(

f) of the Act is replaced by the following:

(

f) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

Section 233 of the Act is replaced by the following:

Agreement to Superintendent

A sale agreement must be sent to the Superintendent before it is submitted to shareholders of the selling bank under subsection 234(1).

2005, c. 54, s. 52(1)

Section 245 of the Act is replaced by the following:

Requirement to maintain copies and process information in Canada

(1) If the Superintendent is of the opinion that it is incompatible with the fulfilment of the Superintendent’s responsibilities under this Act for a bank to maintain, in another country, copies of records referred to in

section 238 or of its central securities register or for a bank to process, in another country, information or data relating to the preparation and maintenance of those records or of its central securities register — or if the Superintendent is advised by the Minister that, in the opinion of the Minister, it is not in the national interest for a bank to do any of those activities in another country — the Superintendent shall direct the bank to not maintain those copies, or to not process the information or data, as the case may be, in that other country or to maintain those copies or to process the information or data only in Canada.

Bank to comply

(2) A bank shall without delay comply with any direction issued under subsection (1).

1991, c. 46, s. 577

Paragraph 300(

a) of the Act is replaced by the following:

(

a) a trust company pursuant to subsection 57(2) of the Trust and Loan Companies Act ; or

2001, c. 9, s. 98

(1) The portion of subsection 373(1) of the French version of the Act before paragraph (

a) is replaced by the following:

Restrictions à l’acquisition

(1) Sous réserve des autres dispositions de la présente partie, il est interdit à une personne — ou à l’entité qu’elle contrôle — d’acquérir, sans l’agrément du ministre, des actions d’une banque ou le contrôle d’une entité qui détient de telles actions si l’acquisition, selon le cas :

2001, c. 9, s. 98

(2) Subsection 373(2) of the Act is replaced by the following:

Amalgamation, etc., constitutes acquisition

(2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of a bank, the entity is deemed to be acquiring a significant interest in that class of shares of the bank through an acquisition for which the approval of the Minister is required under subsection (1).

2001, c. 9, s. 98

Sections 377.1 and 378 of the Act are replaced by the following:

Restriction on control

377.1

(1) No person shall, without the approval of the Minister, acquire control, within the meaning of paragraph 3(1)( d ), of a bank with equity of less than eight billion dollars.

Amalgamation, etc., constitutes acquisition

(2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)( d ), a bank with equity of less than eight billion dollars, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the bank through an acquisition for which the approval of the Minister is required under subsection (1).

Former

Schedule I banks with equity of less than five billion dollars

(1) A bank that was named in

Schedule I as that

Schedule read immediately before October 24, 2001 and that had equity of less than five billion dollars on that day is deemed, for the purposes of sections 138, 156.09, 374, 376, 376.01, 376.1, 376.2, 377, 380 and 382, subsection 383(2),

section 385 and subsection 396(2), to be a bank with equity of eight billion dollars or more.

Application — amalgamation

(2) If a bank to which subsection (1) applies is an applicant for letters patent of amalgamation and the letters patent are issued in respect of the application, the amalgamated bank is deemed to be a bank to which that subsection applies.

Non-application of subsection (1)

(3) Subsection (1) ceases to apply to a bank with equity of less than eight billion dollars if the Minister specifies that it no longer applies to the bank.

2001, c. 9, s. 98

Subsection 398(1) of the French version of the Act is replaced by the following:

Accusé de réception

(1) Lorsque, à son avis, la demande faite dans le cadre de la présente

partie est complète, le surintendant la transmet sans délai au ministre et adresse au demandeur un accusé de réception précisant la date où elle a été reçue.

1991, c. 46, s. 579

Section 402.1 of the Act is replaced by the following:

Permission to become another body corporate

402.1

If subsection 402(1) applies, the Minister may, on application by the bank, permit the bank to apply to be continued as a body corporate under any Act of Parliament referred to in subsection 39.1(1) instead of, or in addition to, issuing an order under subsection 402(1).

(1) Subsection 413(1) of the Act is amended by striking out the word “or” at the end of paragraph ( a ), by adding the word “or” at the end of paragraph (

b) and by adding the following after paragraph ( b ):

(

c) the order approving the commencement and carrying on of business by the bank authorizes it to accept deposits solely in accordance with subsection (3).

1997, c. 15, s. 43

(2) Subsection 413(3) of the Act is replaced by the following:

Deposits that fall below $150,000

(3) A bank referred to in paragraph (1)(

b) or (

c) shall ensure that, on each day that is at least 30 days after the bank receives the authorization referred to in that paragraph,

A/B ≤ 0.01 where A

is the sum of all amounts each of which is the sum of all the deposits held by the bank at the end of a day in the preceding 30 days each of which deposits is less than $150,000 and payable in Canada; and

is the sum of all amounts each of which is the sum of all deposits held by the bank at the end of a day in those preceding 30 days and payable in Canada.

1997, c. 15, s. 43; 2001, c. 9, s. 103(1)

Subsections 413.1(1) and (2) of the Act are replaced by the following:

Notice before opening account or providing prescribed product

413.1

(1) Before a bank referred to in paragraph 413(1)(

b) or (

c) opens a deposit account in Canada or provides in Canada a prescribed product that relates to a deposit, the bank shall, in the prescribed manner, give the person requesting the opening of the account or the provision of the product

(

a) a notice in writing that deposits to the deposit account, or that the deposit that relates to the prescribed product, as the case may be, will not be insured by the Canada Deposit Insurance Corporation or, if the request is made by telephone, a verbal notice to that effect; and

(

b) any other information that may be prescribed.

Other notice

(2) A bank referred to in paragraph 413(1)(

b) or (

c) shall, in accordance with any regulations that may be made,

(

a) post notices at all of its branches, and at prescribed points of service, in Canada where deposits are accepted, and on all of its websites at which deposits are accepted in Canada, to inform the public that deposits with the bank are not insured by the Canada Deposit Insurance Corporation; and

(

b) include in its advertisements notices to inform the public that deposits with the bank are not insured by the Canada Deposit Insurance Corporation.

2001, c. 9, s. 104

(1) Subsection 413.2(1) of the Act is replaced by the following:

Deposits less than $150,000

413.2

(1) Subject to the regulations, a bank referred to in paragraph 413(1)(

b) or (

c) may not, in respect of its business in Canada, act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

2001, c. 9, s. 104

(2) Subsection 413.2(2) of the French version of the Act is replaced by the following:

Définition de dépôt

(2) Pour l’application du présent article, dépôt s’entend au sens du paragraphe 413(5).

2001, c. 9, s. 104

(1) Subsection 413.3(1) of the Act is replaced by the following:

Shared premises

413.3

(1) Subject to the regulations, no bank referred to in paragraph 413(1)(

b) or (

c) shall carry on business in Canada on premises that are shared with those of a member institution, within the meaning of

section 2 of the Canada Deposit Insurance Corporation Act , that is affiliated with the bank.

2001, c. 9, s. 104

(2) Subsections 413.3(3) and (4) of the Act are replaced by the following:

Adjacent premises

(3) Subject to the regulations, no bank referred to in paragraph 413(1)(

b) or (

c) shall carry on business in Canada on premises that are adjacent to a branch or office of a member institution, within the meaning of

section 2 of the Canada Deposit Insurance Corporation Act , that is affiliated with the bank, unless the bank clearly indicates to its customers that its business and the premises on which it is carried on are separate and distinct from the business and premises of the affiliated member institution.

Regulations

(4) The Governor in Council may make regulations

(

a) respecting the circumstances in which, and the conditions under which, a bank referred to in paragraph 413(1)(

b) or (

c) may carry on business in Canada on premises that are shared with those of a member institution referred to in subsection (1); and

(

b) respecting the circumstances in which, and the conditions under which, a bank referred to in paragraph 413(1)(

b) or (

c) may carry on business in Canada on premises that are adjacent to a branch or office of a member institution referred to in subsection (3).

Subsection 418(1) of the Act is replaced by the following:

Restriction on residential mortgages

(1) A bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

1993, c. 28, s. 78 (Sch. III, s. 5); 2002, c. 7, s. 82(E)

(1) Subsections 427(4) to (6) of the Act are replaced by the following:

Notice of intention

(4) Subject to the regulations, the following provisions apply where security on property is given to a bank under this section:

(

a) the rights and powers of the bank in respect of property covered by the security are void as against creditors of the person giving the security and as against subsequent purchasers or mortgagees in good faith of the property covered by the security unless a notice of intention was provided to the bank by the person giving the security and registered by the bank in the system of registration not more than three years immediately before the security was given;

(

b) the registration of a notice of intention may be cancelled by the registration of a certificate of release by the bank; and

(

c) any person may obtain information from the system of registration for the purpose of ascertaining whether a notice of intention or a certificate of release has been registered.

(2) Section 427 of the Act is amended by adding the following after subsection (8):

Regulations

(9) The Governor in Council may make regulations

(

a) establishing a system of registration for the purpose of this section;

(

b) respecting the practice and procedure for the operation of the system of registration, including the registration of notices of intention and certificates of release and the obtaining of information from the system of registration;

(

c) respecting the form and content of notices of intention and certificates of release;

(

d) requiring the payment of fees relating to the system of registration, including fees to obtain information from the system of registration, and prescribing the amounts of those fees or the manner of calculating them; and

(

e) respecting any other matter necessary for the operation of the system of registration.

Transitional

(10) Notices of intention and certificates of release registered in the system of registration as it existed immediately before the establishment of a system of registration under regulations made under paragraph (9)(

a) are deemed to be registered in that system.

1999, c. 28, s. 23

Subsection 438(2) of the Act is replaced by the following:

Provision of information

(2) A bank shall, on making a payment under subsection (1), provide the Bank of Canada, for each deposit or instrument in respect of which the payment is made, with the following information current as of the day the payment is made, in so far as it is known to the bank:

(

a) in the case of a deposit,

(

i) the name of the depositor in whose name the deposit is held,

(ii)

the recorded address of the depositor,

(iii)

the outstanding amount of the deposit, and

(iv)

the branch of the bank at which the last transaction took place in respect of the deposit, and the date of that last transaction; and

(

b) in the case of an instrument,

(

i) the name of the person to whom or at whose request the instrument was issued, certified or accepted,

(ii)

the recorded address of that person,

(iii)

the name of the payee of the instrument,

(iv)

the amount and date of the instrument,

(

v) the name of the place where the instrument was payable, and

(vi)

the branch of the bank at which the instrument was issued, certified or accepted.

Copies of signature cards and signing authorities

(2.1) A bank shall, on written request by the Bank of Canada, provide the Bank of Canada with copies of signature cards and signing authorities relating to any deposit or instrument in respect of which it has made a payment under subsection (1). If it does not have any with respect to a deposit or instrument to which the request relates, it shall so inform the Bank of Canada.

(1) Subsection 439(1) of the Act is replaced by the following:

Notice of unpaid amount

(1) Subject to subsections (1.1) to (3), a bank shall send to each person to whom a deposit referred to in paragraph 438(1)(

a) is payable, and to each person to whom or at whose request an instrument referred to in paragraph 438(1)(

b) was issued, certified or accepted, a notice stating that the deposit or instrument remains unpaid.

Where notice to be sent

(1.1) The notice is to be sent to the person’s recorded address and, if the person has designated an information system for the receipt of electronic documents, to that designated information system.

(2) The portion of subsection 439(2) of the Act before paragraph (

a) is replaced by the following:

When notice to be sent

(2) The notice must be sent during the month of January next following the end of the first two-year period, during the month of January next following the end of the first five-year period and also during the month of January next following the end of the first nine-year period

(3) Section 439 of the Act is amended by adding the following after subsection (2):

Notification of transfer to the Bank of Canada

(3) The notice to be sent during the month of January next following the end of the first nine-year period determined under paragraphs (2)(

a) to ( c ), as the case may be, must also

(

a) indicate that in the month of January in the next year the unpaid amounts will be transferred to the Bank of Canada; and

(

b) include the mailing address and websites where information can be obtained on how to claim the unpaid deposit or instrument.

The Act is amended by adding the following after

section 448.2:

Registered Products

Disclosure required concerning registered products

448.3

(1) Subject to subsection (2), a bank shall not open an account that is or forms part of a registered product in the name of a customer, or enter into an agreement with a customer for a prescribed product or service that is or forms part of a registered product, unless the bank provides, in the prescribed manner, to the individual requesting the account or the prescribed product or service

(

a) information about all charges applicable to the registered product;

(

b) information about how the customer will be notified of any increase in those charges and of any new charges applicable to the registered product;

(

c) information about the bank’s procedures relating to complaints about the application of any charge applicable to the registered product; and

(

d) any other information that may be prescribed.

Regulations

(2) The Governor in Council may make regulations specifying the circumstances under which a bank need not provide the information.

Definition of registered product

(3) In this section, registered product means a product that is defined to be a registered product by the regulations.

Section 455 of the Act is amended by adding the following after subsection (2):

How procedures to be made available

(3) A bank shall make its procedures established under paragraph (1)(

a) available

(

a) in the form of a brochure, at its branches where products or services are offered in Canada;

(

b) on its websites through which products or services are offered in Canada; and

(

c) in written format to be sent to any person who requests them.

Information on contacting Agency

(4) A bank shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(

a) available under subsection (3).

The Act is amended by adding the following before

section 458:

Charges for prescribed products or services

A bank shall not, directly or indirectly, charge or receive any sum for the provision of any prescribed products or services unless the charge is made by express agreement between it and a customer or by order of a court.

The Act is amended by adding the following after

section 458.1:

Regulations respecting the holding of funds

458.2

The Governor in Council may make regulations respecting the maximum period during which a bank may hold funds in respect of specified classes of cheques or other instruments that are deposited into an account at a branch or prescribed point of service in Canada before permitting the customer in whose name the account is kept to access the funds.

2001, c. 9, s. 124(2)

Subsection 459.1(4.1) of the Act is replaced by the following:

Disclosure

(4.1) A bank shall disclose the prohibition on coercive tied selling set out in subsection (1) in a statement in plain language that is clear and concise, displayed and available to customers and the public at all of its branches where products or services are offered in Canada, on all of its websites through which products or services are offered in Canada and at all prescribed points of service in Canada.

2001, c. 9, s. 125

Subsection 459.2(2) of the Act is replaced by the following:

Pre-closure meeting

(2) After notice is given but before the branch is closed or ceases to carry on the activities, the Commissioner shall, in prescribed situations, require the bank to convene and hold a meeting between representatives of the bank, representatives of the Agency and interested parties in the vicinity of the branch in order to exchange views about the closing or cessation of activities, including, but not limited to, alternative service delivery by the bank and measures to help the branch’s customers adjust to the closing or cessation of activities.

2001, c. 9, s. 125

Subparagraph 459.4( a )(iv) of the Act is replaced by the following:

(iv)

any other matter that may affect their dealings, or their employees’ or representatives’ dealings, with customers or the public;

Subsection 464(1) of the Act is amended by adding the following in alphabetical order:

closed-end fund

fonds d’investissement à capital fixe

closed-end fund means an entity whose activities are limited to investing the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities, and whose securities are

(

a) fixed in number and distributed to the public in an offering under a preliminary prospectus, prospectus, short-form prospectus or similar document in accordance with the laws of a province or a foreign jurisdiction;

(

b) traded on an exchange or an over-the-counter market; and

(

c) liquidated on a fixed future termination date, the proceeds of which are allocated to the holders of the securities on a proportional basis.

Section 466 of the Act is amended by adding the following after subsection (5):

Application of other provision

(6) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a bank may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions set out in that other provision are met.

Timing of deemed acquisition

(7) If a bank decides to exercise its right under subsection (6), the bank is deemed to be acquiring the control or the substantial investment under the other provision.

2001, c. 9, s. 127

(1) Paragraph 468(1)(

j) of the French version of the Act is replaced by the following:

j) une entité qui est constituée en personne morale ou formée et réglementée autrement que sous le régime d’une loi fédérale ou provinciale et qui exerce principalement, à l’étranger, des activités commerciales qui, au Canada, seraient des opérations bancaires, l’activité d’une société coopérative de crédit, des opérations d’assurance, la prestation de services fiduciaires ou le commerce de valeurs mobilières.

2001, c. 9, s. 127

(2) Paragraph 468(2)(

e) of the Act is replaced by the following:

(

e) engaging in the activities referred to in the definition “closed-end fund”, “mutual fund distribution entity”, mutual fund entity or real property brokerage entity in subsection 464(1); and

(3) Section 468 of the Act is amended by adding the following after subsection (3):

Exception

(3.1) Despite paragraph (3)( a ), a bank may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is

(

a) a closed-end fund;

(

b) a mutual fund entity; or

(

c) an entity whose business is limited to engaging in one or more of the following:

(

i) the activities of a mutual fund distribution entity,

(ii)

any activity that a bank is permitted to engage in under paragraph 410(1)( c.2 ), and

(iii)

the provision of investment counselling services and portfolio management services.

2001, c. 9, s. 127

(4) Paragraph 468(5)(

d) of the Act is replaced by the following:

(

d) acquire control of, or acquire or increase a substantial investment in, an entity that engages in Canada in an activity described in paragraph 410(1)( c );

( d.1 )

acquire control of, or acquire or increase a substantial investment in, an entity that engages in an activity described in paragraph 410(1)( c.1 ); or

2001, c. 9, s. 127

(5) Paragraph 468(7)(

a) of the Act is replaced by the following:

(

a) the bank is acquiring control of an entity, other than a specialized financing entity, and the only reason for which the bank would, but for this subsection, require approval for the acquisition is that the entity carries on activities referred to in paragraph (2)( b );

2001, c. 9, s. 127

Subsections 471(4) and (5) of the Act are replaced by the following:

Temporary investment

(4) If a bank, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister would have been required under subsection 468(5) if the bank had acquired the control, or acquired or increased the substantial investment, under

section 468, the bank must, within 90 days after acquiring control or after acquiring or increasing the substantial investment,

(

a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or

(

b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity.

Indeterminate extension

(5) If a bank, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Superintendent would have been required under subsection 468(6) if the bank had acquired the control, or acquired or increased the substantial investment, under

section 468, the Superintendent may, on application, permit the bank to retain control of the entity or to continue to hold the substantial investment in the entity for an indeterminate period, on any terms and conditions that the Superintendent considers appropriate.

Subsection 472(1) of the Act is amended by striking out the word “or” at the end of paragraph ( c ), by adding the word “or” at the end of paragraph (

d) and by adding the following after paragraph ( d ):

(

e) all or any of the ownership interests in any entity that is primarily engaged in holding shares of, ownership interests in or assets acquired from the entity or any of its affiliates.

(1) Section 482 of the Act is amended by adding the following after subsection (1):

Approval of series of transactions

(1.1) The Superintendent may, for the purposes of subsection (1), approve a transaction or series of transactions relating to the acquisition or transfer of assets that may be entered into with a person, or with persons of any class of persons, regardless of whether those persons are known at the time of the granting of the approval or not.

2001, c. 9, s. 127

(2) The portion of subsection 482(2) of the Act before paragraph (

a) is replaced by the following:

Exception

(2) Subsection (1) does not apply in respect of

2001, c. 9, s. 127

(3) Subsection 482(2) of the Act is amended by striking out the word “or” at the end of paragraph (

e) and by replacing paragraph (

f) with the following:

(

f) assets acquired or transferred under a transaction or series of transactions by the bank with another financial institution as a result of the bank’s participation in one or more syndicated loans with that financial institution;

(

g) assets purchased or sold under a sale agreement that is approved by the Minister under

section 236;

(

h) shares of, or ownership interests in, an entity for which the approval of the Minister under

Part VII or subsection 468(5) is required or the approval of the Superintendent under subsection 468(6) is required;

(

i) assets that are acquired or transferred under a transaction that has been approved by the Minister under subsection 678(1) of this Act or subsection 715(1) of the Insurance Companies Act ;

(

j) assets, other than real property, acquired or disposed of under an arrangement that has been approved by the Superintendent under subsection 494(3); or

(

k) assets acquired or disposed of with the approval of the Superintendent under subsection 494(4).

2001, c. 9, s. 127

(4) Subsection 482(3) of the Act is repealed.

2001, c. 9, s. 127

(5) Paragraph 482(4)(

b) of the Act is replaced by the following:

(

b) in the case of assets that are transferred, the value of the assets as reported in the last annual statement of the bank prepared before the transfer or, if the value of the assets is not reported in that annual statement, the value of the assets as it would be reported in the annual statement of the bank if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 308(4), immediately before the transfer.

2001, c. 9, s. 127

(6) Subsection 482(6) of the Act is replaced by the following:

Total value of all assets

(6) For the purposes of subsection (1), the total value of all assets that the bank or any of its subsidiaries has transferred during the 12-month period referred to in subsection (1) is the total of the value of each of those assets as reported in the last annual statement of the bank prepared before the transfer of the asset or, if the value of any of those assets is not reported in that annual statement, as it would be reported in the annual statement of the bank if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 308(4), immediately before the transfer of the asset.

Section 488 of the Act is amended by adding the following after subsection (3):

Security of a related party

(4) For the purposes of this Part, security of a related party includes an option, transferable by delivery, to demand delivery of a specified number or amount of shares of the related party at a fixed price within a specified time.

Section 494 of the Act is amended by adding the following after subsection (5):

Approval under

section 236

(6) A bank may acquire any assets from, or dispose of any assets to, a related party of the bank under a sale agreement that is approved by the Minister under

section 236.

1997, c. 15, c. 70

Subsection 495(3) of the Act is replaced by the following:

Exception

(3) Despite subsection 489(2), a bank is deemed not to have indirectly entered into a transaction in respect of which this Part applies if the transaction is entered into by an entity that is controlled by the bank and the business of which is limited to the activity referred to in paragraph 468(2)(

c) and the transaction is on terms and conditions at least as favourable to the bank as market terms and conditions, as defined in subsection 501(2).

2001, c. 9, s. 129

(1) The description of B in subsection 495.3(1) of the Act is replaced by the following:

is the total value of all assets that the bank directly or indirectly acquired from, or directly or indirectly transferred to, that related party in the 12 months ending immediately before the acquisition or transfer, other than assets acquired by or transferred to the bank under transactions permitted by

section 490; and

2001, c. 9, s. 129

(2) Paragraph 495.3(3)(

a) of the Act is replaced by the following:

(

a) the bank purchases or sells assets under a sale agreement that is approved by the Minister under

section 236; or

2001, c. 9, s. 132

(1) The

definitions designated foreign bank , designation order and exemption order in subsection 507(1) of the Act are repealed.

2001, c. 9, s. 132

(2) The definition limited commercial entity in subsection 507(1) of the Act is replaced by the following:

limited commercial entity

entité à activités commerciales restreintes

limited commercial entity means a Canadian entity that a foreign bank or an entity associated with a foreign bank may control in accordance with subsection 522.09(1) or (2), or in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment in accordance with that subsection.

2001, c. 9, s. 132

(3) Paragraph (

e) of the definition financial services entity in subsection 507(1) of the Act is replaced by the following:

(

e) engaging in the activities referred to in the definition closed-end fund , mutual fund distribution entity or mutual fund entity in subsection 464(1);

2001, c. 9, s. 132

(4) Paragraph 507(15)(

c) of the Act is replaced by the following:

(

c) has received the approval of the Minister under paragraph 522.22(1)( f ); or

2001, c. 9, s. 132

(5) Paragraph 507(16)(

c) of the Act is replaced by the following:

(

c) has received the approval of the Minister under paragraph 522.22(1)( f ); or

2001, c. 9, s. 132

Sections 508 to 509.1 of the Act are replaced by the following:

Application

(1) This Part applies to

(

a) a foreign bank that

(

i) is a bank according to the laws of the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business,

(ii)

engages in the business of providing financial services and employs, to identify or describe its business, a name that includes the word “bank”, “ banque ”, “banking” or “ bancaire ”, either alone or in combination with other words, or any word or words in any language other than English or French corresponding generally to any of those words, or

(iii)

is regulated as a bank or as a deposit-taking institution according to the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business; and

(

b) an entity that is associated with a foreign bank and that is

(

i) a member of a material banking group,

(ii)

controlled by a foreign bank described in any of subparagraphs ( a )(

i) to (iii), or

(iii)

associated with a foreign bank described in any of subparagraphs ( a )(

i) to (iii) and that foreign bank or any entity controlled by that foreign bank is

(

A) engaging in or carrying on business in Canada, other than holding, managing or otherwise dealing with real property,

(

B) maintaining a branch in Canada, other than an office referred to in

section 522,

(

C) establishing, maintaining or acquiring for use in Canada an automated banking machine, a remote service unit or a similar automated service, or, in Canada, accepting data from such a machine, unit or service other than in circumstances described in

section 511 or 512,

(

D) acquiring or holding control of, or a substantial investment in, a Canadian entity, or

(

E) acquiring or holding any share or ownership interest in a Canadian entity and

(

I) an entity associated with the foreign bank holds control of, or a substantial investment in, the Canadian entity, or

(II)

the foreign bank, an entity associated with the foreign bank and one or more other entities associated with the foreign bank would, if they were one person, hold control of, or a substantial investment in, the Canadian entity.

Member of a material banking group

(2) For the purposes of this section, an entity is a member of a material banking group if either of the following ratios, expressed as a percentage, is equal to or greater than the percentage prescribed for the purpose of this subsection:

A/B or C/D where A

is the sum of the total assets of all foreign banks described in any of subparagraphs (1)( a )(

i) to (iii) with which the entity is associated, other than the total assets of foreign banks described in any of those subparagraphs whose assets are consolidated into the total assets of any foreign bank described in any of those subparagraphs with which the entity is associated;

(

a) if the entity is not controlled by any person, the total assets of the entity, or

(

b) in any other case, the sum of the total assets of the entity and of all its affiliates, other than entities whose total assets are consolidated into the total assets of an affiliate of the entity;

is the sum of the total revenue of all foreign banks described in any of subparagraphs (1)( a )(

i) to (iii) with which the entity is associated, other than the total revenue of foreign banks described in any of those subparagraphs whose revenue is consolidated into the total revenue of any foreign bank described in any of those subparagraphs with which the entity is associated; and

(

a) if the entity is not controlled by any person, the total revenue of the entity, or

(

b) in any other case, the sum of the total revenue of the entity and of all its affiliates, other than entities whose total revenue is consolidated into the total revenue of an affiliate of the entity.

Exemption from material banking group status

(3) Despite subsection (2), the Minister may, subject to any terms and conditions that he or she considers appropriate, exempt an entity from being a member of a material banking group if neither of the ratios determined in accordance with that subsection in relation to that entity exceeds the percentage prescribed for the purposes of this subsection.

Subsections 507(4) to (7) do not apply

(4) Subsections 507(4) to (7) do not apply with respect to the making of any determination relating to control or a substantial investment for the purposes of subparagraph (1)( b )(iii).

Definitions

(5) The following

definitions apply in this section.

total assets

actif total

total assets , in respect of an entity, means the total value of its assets

(

a) as reported on a consolidated basis in its most recently completed financial statements that were prepared in accordance with generally accepted accounting principles in

(

i) the jurisdiction in which the entity was formed or incorporated,

(ii)

a jurisdiction in which it carries on business, or

(iii)

a country or territory that is a WTO Member as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act ; or

(

b) if its most recently completed financial statements were not prepared in the manner described in paragraph ( a ), as would have been reported on a consolidated basis in its most recently completed financial statements had they been prepared in accordance with generally accepted accounting principles in Canada.

total revenue

recettes d’exploitation totales

total revenue , in respect of an entity, means its total revenue

(

a) as reported on a consolidated basis in its most recently completed financial statements that were prepared in accordance with generally accepted accounting principles in

(

i) the jurisdiction in which the entity was formed or incorporated,

(ii)

a jurisdiction in which it carries on business, or

(iii)

a country or territory that is a WTO Member as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act ; or

(

b) if its most recently completed financial statements were not prepared in the manner described in paragraph ( a ), as would have been reported on a consolidated basis in its most recently completed financial statements had they been prepared in accordance with generally accepted accounting principles in Canada.

Section 510 of the Act is amended by adding the following after subsection (3):

Non-application re federal institutions associated with a foreign bank

(4) Subsection (1) does not apply to

(

a) an entity referred to in any of paragraphs 468(1)(

a) to (

f) that is an entity associated with a foreign bank; or

(

b) a Canadian entity that an entity referred to in paragraph (

a) controls, or in which such an entity has a substantial investment.

Non-application re Canadian entity associated with a foreign bank

(5) Paragraphs (1)(

a) and (

b) do not apply to a Canadian entity that is an entity associated with a foreign bank and that is held or acquired in accordance with this Part.

2001, c. 9, s. 132

Section 511 of the Act is replaced by the following:

Exception re real property holding and management

510.1

Except as may be prescribed, paragraphs 510(1)(

a) and (

b) do not apply in respect of the holding or managing of, or otherwise dealing with, real property in Canada by a foreign bank or an entity associated with a foreign bank.

Exception re accessing accounts

Nothing in paragraphs 510(1)(

a) to (

c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from providing its customers who are natural persons not ordinarily resident in Canada with access in Canada to their accounts located outside Canada through the use of automated banking machines located in Canada.

2001, c. 9, s. 132

Subsection 513(1) of the Act is replaced by the following:

Exception re automated services

(1) A foreign bank, or an entity associated with a foreign bank, that has received the approval of the Minister under paragraph 522.22(1)(

f) may

(

a) if it is a foreign securities dealer that has also received the approval of the Minister under paragraph 522.22(1)( i ), engage in the activities referred to in paragraph 510(1)(

c) so long as they relate to its business referred to in paragraph 522.18(1)( b ); and

(

b) if it is a foreign cooperative credit society, engage in the activities referred to in paragraph 510(1)(

c) so long as they relate to its business as a cooperative credit society engaged in or carried on by it in accordance with provincial laws relating to cooperative credit societies.

2001, c. 9, s. 132

Sections 514 to 517 of the Act are replaced by the following:

Change of status

(1) If an entity becomes a foreign bank, or an entity associated with a foreign bank, to which this Part applies and immediately before it became such a foreign bank or such an entity it maintained a branch or engaged in or carried on business in Canada that is not permitted by or under this Part, it may continue to maintain that branch or engage in or carry on that business for a period of six months after the day on which it became such a foreign bank or such an entity, or for any other shorter period that may be specified or approved by the Minister.

Transitional

(2) If a foreign bank or an entity associated with a foreign bank was permitted by

section 516 or 517, as that

section read immediately before the day on which this subsection came into force, to maintain a branch or engage in or carry on business in Canada that is not permitted by or under this Part, it may continue to maintain that branch or engage in or carry on that business for the period during which it could have done so under that

section .

Change of status

(1) If an entity becomes a foreign bank, or an entity associated with a foreign bank, to which this Part applies and immediately before it became such a foreign bank or such an entity it held control of, or a substantial investment in, a Canadian entity and that control or substantial investment is not permitted by or under this Part, it may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months after the day on which it became such a foreign bank or such an entity, or for any other shorter period that may be specified or approved by the Minister.

Transitional

(2) If a foreign bank or an entity associated with a foreign bank was permitted by

section 516 or 517, as that

section read immediately before the day on which this subsection came into force, to hold control of, or a substantial investment in, a Canadian entity and that holding is not permitted by or under this Part, it may continue to hold control of, or the substantial investment in, the Canadian entity for the period during which it could have done so under that section.

2001, c. 9, s. 132

Section 517.1 of the English version of the Act is replaced by the following:

Restriction

517.1

If an order has been made under subsection 973.1(1) in respect of a foreign bank or an entity associated with a foreign bank and

section 516 or 517 applies to the foreign bank or entity, as the case may be, the period under

section 516 or 517 may not extend beyond the expiry of the period referred to in the order made under subsection 973.1(1).

2001, c. 9, s. 132

Subsection 518(4) of the Act is replaced by the following:

Exception

(4) Despite subsection (1), a foreign bank, or an entity associated with a foreign bank, that has received the approval of the Minister under paragraph 522.22(1)(

f) may guarantee any securities or accept any bills of exchange or depository bills in relation to its business permitted under paragraph 522.18(1)(

a) or ( b ).

2001, c. 9, s. 132

Sections 519 and 520 of the Act are replaced by the following:

Prohibited activities — non-bank affiliates

(1) Despite subsections 510(4) and (5), a non-bank affiliate of a foreign bank shall not, in Canada,

(

a) engage in the business of accepting deposit liabilities;

(

b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank, other than for

(

i) an authorized foreign bank,

(ii)

a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(

f) to engage in or carry on the business of a cooperative credit society, or

(iii)

an entity referred to in any of paragraphs 468(1)( a ), ( c ), (

d) and (

h) or a trust or loan corporation referred to in paragraph 468(1)( g ); or

(

c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.

Exception

(2) Subsection (1) does not apply to a non-bank affiliate that is

(

a) a trust or loan corporation incorporated by or under

an Act of Parliament or of the legislature of a province;

(

b) a Canadian entity referred to in paragraph 468(1)(

d) or ( h ); or

(

c) a prescribed entity.

Borrowing from the public — non-bank affiliates

519.1

(1) A non-bank affiliate of a foreign bank that carries on as part of its business the provision of financial services may borrow money in Canada from the public only if it discloses that

(

a) it is not a member institution of the Canada Deposit Insurance Corporation;

(

b) the liability incurred by it through the borrowing is not a deposit; and

(

c) it is not regulated as a financial institution in Canada.

Manner of disclosure

(2) The disclosure must be

(

a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

(

b) in any other manner that may be prescribed.

Exception for certain borrowing

(3) Subsection (1) does not apply

(

a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or

(

b) except as may be provided in any regulations, to a borrowing

(

i) from a person in an amount of $150,000 or more, or

(ii)

through the issue of instruments in denominations of $150,000 or more.

Exception

(4) Subsection (1) does not apply to a non-bank affiliate that is

(

a) a Canadian entity referred to in any of paragraphs 468(1)( b ), (

c) or (

e) to ( g );

(

b) an entity controlled by a bank holding company or an insurance holding company or in which a bank holding company or an insurance holding company has a substantial investment;

(

c) a financial institution referred to in paragraph (

g) of the definition financial institution in

section 2; or

(

d) a prescribed entity.

Prohibition re deposits

(1) A foreign bank — or an entity that is associated with a foreign bank and that is incorporated or formed otherwise than by or under

an Act of Parliament or of the legislature of a province — shall not, as part of its business in Canada,

(

a) engage in the business of accepting deposit liabilities;

(

b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank; or

(

c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.

Exception

(2) Subsection (1) does not apply to

(

a) a foreign bank that is an authorized foreign bank; or

(

b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(

f) to engage in or carry on the business of a cooperative credit society.

Exception

(3) Paragraph (1)(

b) does not apply to a foreign securities dealer that has received the approval of the Minister under paragraph 522.22(1)(

f) or to a foreign insurance company — or to a prescribed entity — that engages in the business of acting as an agent for the acceptance of deposit liabilities for

(

a) an authorized foreign bank;

(

b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(

f) to engage in or carry on the business of a cooperative credit society; or

(

c) an entity referred to in paragraph 468(1)( a ), ( c ), (

d) or (

h) or a trust or loan corporation referred to in paragraph 468(1)( g ).

Borrowing from the public

520.1

(1) A foreign bank — or an entity that is associated with a foreign bank and that is incorporated or formed otherwise than by or under

an Act of Parliament or of the legislature of a province — may, as part of its business in Canada, borrow money in Canada from the public only if

(

a) it maintains a branch in Canada as permitted by

section 522.05 or 522.19 or it engages in or carries on business in Canada as permitted by that section; and

(

b) it discloses that

(

i) it is not a member institution of the Canada Deposit Insurance Corporation,

(ii)

the liability incurred through the borrowing is not a deposit, and

(iii)

it is not regulated as a financial institution in Canada.

Manner of disclosure

(2) The disclosure must be

(

a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

(

b) in any other manner that may be prescribed.

Exception for certain borrowing

(3) The disclosure is not required in respect of

(

a) a borrowing of a prescribed class or type or a borrowing in prescribed circumstances or in a prescribed manner; or

(

b) except as may be provided in any regulations, a borrowing

(

i) from a person in an amount of $150,000 or more, or

(ii)

through the issue of instruments in denominations of $150,000 or more.

Exception

(4) Subsection (1) does not apply to

(

a) an authorized foreign bank;

(

b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(

f) to engage in or carry on the business of a cooperative credit society;

(

c) a foreign insurance company;

(

d) a foreign securities dealer that has received the approval of the Minister under paragraph 522.22(1)( f ); or

(

e) a prescribed entity.

2001, c. 9, s. 132

Section 522.02 of the Act is replaced by the following:

Name of representative office

522.011

If the name under which a representative office of a foreign bank is or will be identifying itself in Canada is one referred to in any of paragraphs 530(1)(

a) to ( e ), the Superintendent may, as the case may be,

(

a) refuse to grant the approval referred to in paragraph 522( a );

(

b) impose restrictions on the use of the name in Canada; or

(

c) direct the foreign bank to change the name.

Cancellation of registration

522.02

The Superintendent may cancel the registration of a representative office of a foreign bank if

(

a) the foreign bank requests the Superintendent to cancel the registration;

(

b) the Superintendent is of the opinion that the representative office is not being operated, or the personnel of that office are not conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522( a ); or

(

c) the Superintendent is of the opinion that the foreign bank has failed to comply with a restriction imposed under paragraph 522.011(

b) or a direction made under paragraph 522.011( c ).

2001, c. 9, s. 132

Section 522.07 of the Act is replaced by the following:

Investment in a financial institution

522.07

Subject to the requirements relating to approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity referred to in any of paragraphs 468(1)(

a) to ( i ).

2001, c. 9, s. 132

(1) Subsection 522.08(1) of the Act is replaced by the following:

Permitted investments

522.08

(1) Subject to subsection (2) and the requirements relating to approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity, other than an entity referred to in any of paragraphs 468(1)(

a) to ( i ), whose business is limited to one or more of the following:

(

a) engaging in

(

i) any financial service activity that a bank is permitted to engage in under any of paragraphs 409(2)(

a) to ( d ), or

(ii)

any other activity that a bank is permitted to engage in under

section 410 or 411;

(

b) acquiring or holding shares of, or ownership interests in, entities that a foreign bank or an entity associated with a foreign bank is permitted to acquire or hold under this Division or Division 8 — other than limited commercial entities, except in prescribed circumstances;

( b.1 )

acquiring or holding shares of, or ownership interests in, entities incorporated or formed otherwise than by or under

an Act of Parliament or of the legislature of a province;

(

c) engaging in the provision of any services exclusively to any or all of the following, so long as the Canadian entity is also providing those services to the foreign bank or to any member of the foreign bank’s group, namely,

(

i) the foreign bank,

(ii)

any member of the foreign bank’s group,

(iii)

any entity that is primarily engaged in the business of providing financial services,

(iv)

any entity in which an entity referred to in subparagraph (iii) has a substantial investment and that is

(

A) an entity in which a bank is permitted to acquire a substantial investment under

section 468,

(

B) an entity in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment under this

section and

section 522.07, or

(

C) a prescribed entity, or

(

v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;

(

d) engaging in any activity that a bank is permitted to engage in — or in any other prescribed activity —, other than an activity referred to in paragraph (

a) or ( e ), that relates to

(

i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the foreign bank or by any member of the foreign bank’s group, or

(ii)

if a significant portion of the business of the Canadian entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services;

(

e) engaging in the activities referred to in the definition closed-end fund , mutual fund distribution entity , mutual fund entity or real property brokerage entity in subsection 464(1); and

(

f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.

2001, c. 9, s. 132

(2) Paragraph 522.08(2)(

d) of the Act is replaced by the following:

(

d) acquiring or holding control of, or a substantial investment in, another Canadian entity unless

(

i) in the case of a Canadian entity that is controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this

section or

section 522.07 or 522.1 or Division 8, or

(ii)

in the case of a Canadian entity that is not controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section,

section 522.07, any of paragraphs 522.1(

a) or (

c) to (

e) or Division 8; or

(3) Section 522.08 of the Act is amended by adding the following after subsection (2):

Exception

(2.1) Despite paragraph (2)( a ), a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is

(

a) a closed-end fund;

(

b) a mutual fund entity; or

(

c) an entity whose business is limited to engaging in one or more of the following:

(

i) the activities of a mutual fund distribution entity,

(ii)

any activity that a bank is permitted to engage in under paragraph 410(1)( c.2 ), and

(iii)

the provision of investment counselling services and portfolio management services.

2001, c. 9, s. 132

Section 522.09 of the Act is replaced by the following:

Investment in a limited commercial entity — foreign bank

522.09

(1) Subject to the requirements relating to approval set out in Division 5, a foreign bank that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if

(

a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(

a) to ( i );

(

b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(

a) to (

f) or in any of paragraphs (

a) to (

h) of the definition financial services entity in subsection 507(1), determined in the prescribed manner;

(

c) the Canadian entity does not engage in any leasing activities; and

(

d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or any entity associated with the foreign bank.

Investment in a limited commercial entity — entity associated with a foreign bank

(2) Subject to the requirements relating to approval set out in Division 5, an entity that is associated with a foreign bank and that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if

(

a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(

a) to ( i );

(

b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(

a) to (

f) or in any of paragraphs (

a) to (

h) of the definition financial services entity in subsection 507(1), determined in the prescribed manner;

(

c) the Canadian entity does not engage in leasing activities; and

(

d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank.

Investment in holding body corporate — limited commercial entities

(3) A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity whose business is limited to acquiring or holding shares of, or ownership interests in, limited commercial entities.

Section 522.1 of the Act is amended by striking out the word “or” at the end of paragraph ( c ), by adding the word “or” at the end of paragraph (

d) and by adding the following after paragraph ( d ):

(

e) if it does so in accordance with regulations made under paragraph 522.23(

a) concerning specialized financing.

2001, c. 9, s. 132

Subsection 522.11(2) of the Act is replaced by the following:

Indirect investments through federal institutions

(2) If a foreign bank or an entity associated with a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity under subsection (1), none of the requirements relating to approval set out in Division 5 apply in respect of that acquisition or holding.

2001, c. 9, s. 132

(1) Subsection 522.14(1) of the Act is replaced by the following:

Temporary investments

522.14

(1) Subject to sections 522.21 and 522.211, a foreign bank or an entity associated with a foreign bank may, by way of temporary investment, acquire or hold control of, or a substantial investment in, a Canadian entity if the foreign bank or the entity associated with a foreign bank has a financial establishment in Canada or would, by virtue of the temporary investment, have a financial establishment in Canada.

2001, c. 9, s. 132

(2) Subsection 522.14(4) of the Act is replaced by the following:

Exception

(4) If a foreign bank, or an entity associated with a foreign bank, acquires or holds, by way of a temporary investment, control of, or a substantial investment in, a Canadian entity for which the approval of the Minister would have been required under any of paragraphs 522.22(1)(

a) to (

e) if the foreign bank or the entity associated with a foreign bank had acquired the control or the substantial investment under

section 522.07 or 522.08, the foreign bank or the entity associated with a foreign bank shall, within 90 days after acquiring control, or after acquiring the substantial investment,

(

a) apply to the Minister for approval to retain control of the Canadian entity or to continue to hold the substantial investment in the Canadian entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or

(

b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the Canadian entity or holds a substantial investment in the Canadian entity.

2001, c. 9, s. 132

Section 522.18 of the Act is replaced by the following:

Business of a cooperative credit society and dealing in securities

522.18

(1) Subject to the requirements relating to approval set out in Division 5, a foreign bank — or an entity associated with a foreign bank —

(

a) that is a foreign cooperative credit society may, in Canada, engage in or carry on the business of a cooperative credit society, so long as that business is engaged in or carried on in accordance with provincial laws relating to cooperative credit societies; or

(

b) that is a foreign securities dealer may, in Canada, engage in or carry on the business of dealing in securities, or the business of providing investment counselling services and portfolio management services, so long as that business is engaged in or carried on in accordance with provincial laws relating to securities dealing or investment counselling and portfolio management.

Business of investment counselling services and portfolio management services

(2) Subject to the requirements relating to approval set out in Division 5, an entity associated with a foreign bank incorporated or formed, and regulated, otherwise than by or under

an Act of Parliament or of the legislature of a province, that engages in or carries on, outside Canada, the business of providing investment counselling services and portfolio management services may engage in or carry on that business in Canada so long as that business in Canada is engaged in or carried on in accordance with provincial laws relating to investment counselling and portfolio management.

2001, c. 9, s. 132

The portion of subsection 522.19(1) of the Act before paragraph (

a) is replaced by the following:

Limited commercial branches

522.19

(1) Subject to the requirements relating to approval set out in Division 5, and subject to subsection (2), a foreign bank, or an entity that is incorporated or formed otherwise than by or under

an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that has a financial establishment in Canada may maintain a branch in Canada or engage in or carry on business in Canada, so long as

2001, c. 9, s. 132

The headings before

section 522.2 of the Act are replaced by the following:

Division 5

Approvals

Application

2001, c. 9, s. 132

Section 522.21 of the Act is replaced by the following:

Approval to Have a Financial Establishment in Canada

No financial establishment without approval — foreign bank

522.21

(1) A foreign bank may not, without the prior written approval of the Minister, have a financial establishment in Canada.

Exception

(2) Subsection (1) does not apply if the foreign bank or any entity associated with the foreign bank

(

a) is an authorized foreign bank;

(

b) is a foreign insurance company;

(

c) controls or is a major owner of a Canadian entity referred to in any of paragraphs 468(1)(

a) to ( f ); or

(

d) has already received the approval of the Minister to have a financial establishment in Canada.

Deeming

(3) A foreign bank that was the subject of a designation order under subsection 508(1) as that subsection read immediately before the coming into force of this subsection and whose designation order has not been revoked is deemed to have received the approval of the Minister to have a financial establishment in Canada.

No financial establishment without approval — associated entity

522.211

(1) An entity that is associated with a foreign bank may not, without the prior written approval of the Minister, have a financial establishment in Canada.

Exception

(2) Subsection (1) does not apply if the entity associated with a foreign bank, the foreign bank or any other entity associated with the foreign bank

(

a) is an authorized foreign bank;

(

b) is a foreign insurance company;

(

c) controls or is a major owner of a Canadian entity referred to in any of paragraphs 468(1)(

a) to ( f ); or

(

d) has already received the approval of the Minister to have a financial establishment in Canada.

Deeming

(3) An entity associated with a foreign bank that was the subject of a designation order under subsection 508(1) as that subsection read immediately before the coming into force of this subsection and whose designation order has not been revoked is deemed to have received the approval of the Minister to have a financial establishment in Canada.

Approvals in Respect of Investments and Activities

2001, c. 9, s. 132

(1) Subsection 522.22(1) of the Act is replaced by the following:

Minister’s approval

522.22

(1) Subject to subsection (2) and the regulations, a foreign bank or an entity associated with a foreign bank may not, without the prior written approval of the Minister,

(

a) acquire control of a Canadian entity referred to in any of paragraphs 468(1)(

g) to (

i) from a person who is not a member of the foreign bank’s group;

(

b) acquire control of a Canadian entity whose business includes one or more of the activities referred to in paragraph 522.08(1)(

a) and that engages, as part of its business, in any financial intermediary activity that exposes the Canadian entity to material market or credit risk — including a finance entity — if the control is acquired from an entity referred to in any of paragraphs 468(1)(

a) to (

f) that is not a member of the foreign bank’s group, but does not include a Canadian entity whose activities are limited to the activities of one or more of the following entities:

(

i) a factoring entity as defined in the regulations, or

(ii)

a financial leasing entity;

(

c) acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes one or more of the activities referred to in paragraph 522.08(1)( d );

(

d) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in Canada in an activity described in paragraph 410(1)( c );

( d.1 )

acquire or hold control of, or a substantial investment in, a Canadian entity that engages in an activity described in paragraph 410(1)( c.1 );

(

e) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in an activity prescribed for the purposes of paragraph 522.08(1)( f );

(

f) engage in or carry on a business permitted by paragraph 522.18(1)(

a) or (

b) or subsection 522.18(2);

(

g) acquire or hold control of, or a substantial investment in, a limited commercial entity;

(

h) maintain a branch or engage in or carry on a business permitted by

section 522.19; or

(

i) engage in an activity referred to in paragraph 510(1)(

c) in the circumstances described in paragraph 513(1)(

a) or (2)( c ).

(2) Section 522.22 of the Act is amended by adding the following after subsection (4):

Application

(5) Subsection (1) applies regardless of whether or not the approval of the Minister is required under

section 522.21 or 522.211.

2001, c. 9, s. 132

Section 522.23 of the Act is replaced by the following:

Regulations

522.23

The Governor in Council may make regulations for the purposes of this Part and, in particular, may make regulations

(

a) concerning specialized financing;

(

b) for the purposes of subsection 522.22(1) or (2), permitting the acquisition or holding of control or the acquisition or holding of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the foreign banks, entities associated with foreign banks or other entities in respect of which either of those subsections does not apply, including prescribing foreign banks, entities associated with foreign banks or other entities on the basis of the activities they engage in;

(

c) restricting the ownership by foreign banks, or entities associated with foreign banks, of shares in a body corporate or of ownership interests in an unincorporated entity under Division 3 or 4 and imposing terms and conditions applicable to foreign banks, or entities associated with foreign banks, that own such shares or interests;

(

d) in respect of sections 409 to 411, for the purposes of paragraph 522.08(1)( a ), subsection 522.22(1) and

section 522.24;

(

e) respecting the calculation referred to in subsection 508(2), including regulations respecting the classes of entities associated with a foreign bank, and the classes of foreign banks described in any of subparagraphs 508(1)( a )(

i) to (iii) that are associated with a foreign bank, that are to be taken into account in that calculation;

(

f) defining any terms in subsection 508(2);

(

g) respecting exemptions under subsection 508(3); and

(

h) defining “factoring entity” for the purpose of paragraph 522.22(1)( b ).

2001, c. 9, s. 132

Paragraph 522.25(3)(

b) of the Act is replaced by the following:

(

b) under subsection 518(4) or 521(1.02), as it read immediately before October 24, 2001.

2001, c. 9, s. 132

Sections 522.26 and 522.27 of the Act are replaced by the following:

Publication

522.26

The Superintendent must publish in the Canada Gazette a notice of every approval granted for the purpose of

section 522.21 or 522.211 and of every revocation of any such approval.

Obligation to provide information

522.27

A foreign bank or entity associated with a foreign bank shall, at the times and in the form specified by the Superintendent, provide the Superintendent with the information that he or she may require.

2001, c. 9, s. 132

Division 7 of

Part XII of the Act is repealed.

2001, c. 9, s. 132

The definition affected foreign bank in subsection 522.29(1) of the Act is amended by adding the word “or” at the end of paragraph ( a ), by striking out the word “or” at the end of paragraph (

b) and by repealing paragraph ( c ).

The Act is amended by adding the following after

section 522.33:

PART XII.01

NON-APPLICATION OF THE INVESTMENT CANADA ACT

Investment Canada Act

522.34

(1) The Investment Canada Act does not apply in respect of any of the following, whether it occurs directly or indirectly:

(

a) the acquisition of control of a Canadian business, within the meaning of that Act, that is an entity referred to in any of paragraphs 468(1)(

a) to (

f) by a foreign bank or by an entity associated with a foreign bank;

(

b) the establishment of a new Canadian business, within the meaning of that Act, that is the insurance business in Canada of a foreign insurance company that is a foreign bank to which

Part XII does not apply or that is an entity associated with a foreign bank to which that Part does not apply;

(

c) the acquisition of control of a Canadian business, within the meaning of that Act, by an entity referred to in any of paragraphs 468(1)(

a) to (

f) that is controlled by a foreign bank or by an entity associated with a foreign bank;

(

d) the establishment of a new Canadian business, within the meaning of that Act, by a foreign bank to which

Part XII applies, or by an entity associated with a foreign bank to which that Part applies, that has a financial establishment in Canada, or would have one by virtue of the establishment of the new Canadian business; and

(

e) the acquisition of control of a Canadian business, within the meaning of that Act, by a foreign bank to which

Part XII applies, or by an entity associated with a foreign bank to which that Part applies, that has a financial establishment in Canada, or would have one by virtue of the acquisition.

Definitions

(2) The following

definitions apply in subsection (1).

entity associated with a foreign bank

entité liée à une banque étrangère

entity associated with a foreign bank means an entity that is or is deemed to be associated with a foreign bank within the meaning of

section 507.

foreign insurance company

société d’assurances étrangère

foreign insurance company means a foreign company as defined in subsection 2(1) of the Insurance Companies Act .

Financial establishment in Canada

(3) For the purpose of subsection (1), a foreign bank has a financial establishment in Canada if the foreign bank has or is deemed to have a financial establishment in Canada for the purpose of

Part XII.

Financial establishment in Canada

(4) For the purpose of subsection (1), an entity associated with a foreign bank has a financial establishment in Canada if the entity has or is deemed to have a financial establishment in Canada for the purpose of

Part XII.

2005, c. 54, s. 80

(1) Paragraph 528(1)(

a) of the Act is repealed.

(2) Section 528 of the Act is amended by adding the following after subsection (1):

Change of name

(1.1) On application by an authorized foreign bank, the Superintendent may, by order, change the name under which it is permitted to carry on business in Canada or the province in which its principal office is situated as that name or province is set out in the order made under subsection 524(1) or in any other order made under this section.

Transitional

(3) Orders made under paragraph 528(1)(

a) of the Act, as that paragraph read immediately before the coming into force of this section, that are in force immediately before that coming into force are deemed to be orders made under subsection 528(1.1) of the Act.

1999, c. 28, s. 35(1); 2001, c. 9, s. 136(1)

Paragraphs 529(1)(

f) and (

g) of the Act are replaced by the following:

(

f) in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), carry on business in Canada without having to deposit assets having a value of at least five million dollars, as required by subparagraphs 534(3)( a )(ii) and 582(1)( b )(i), if the authorized foreign bank continues to hold a substantial investment in

(

i) a bank that is a subsidiary of a foreign bank and the Minister has approved an application for letters patent dissolving the bank made by the subsidiary under

section 344, or

(ii)

a company to which the Trust and Loan Companies Act applies and the Minister has approved an application for letters patent dissolving the company made under

section 349 of that Act; or

(

g) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

1999, c. 28, s. 35(1)

(1) The portion of subsection 530(1) of the Act before paragraph (

a) is replaced by the following:

Prohibited names

(1) An order made under subsection 524(1) or 528(1.1) may not provide for the use of a name that is

1999, c. 28, s. 35(1)

(2) Subsection 530(2) of the Act is replaced by the following:

Name otherwise prohibited

(2) An order made under subsection 524(1) or 528(1.1) may provide for the use of a name that includes a word referred to in

section 47 of the Trust and Loan Companies Act .

1999, c. 28, s. 35(1)

Section 531 of the Act is replaced by the following:

Publication of name

An authorized foreign bank shall set out its name and, where applicable, any other permitted name, as set out in the order made under subsection 524(1) or 528(1.1), in legible characters in all contracts, invoices, negotiable instruments and other documents evidencing rights and obligations with respect to other parties that are issued or made by or on behalf of the authorized foreign bank.

1999, c. 28, s. 35(1)

Subsection 532(1) of the English version of the Act is replaced by the following:

Directing change of name

(1) If through inadvertence or otherwise an order made under subsection 524(1) or 528(1.1) provides for the use of a name that is prohibited by

section 530, the Superintendent may, by order, direct the authorized foreign bank to change the name without delay and the authorized foreign bank shall comply with that direction.

1999, c. 28, s. 35(1)

Subsection 533(1) of the Act is replaced by the following:

Other name

(1) Subject to

section 531 and subsection (2), an authorized foreign bank may carry on business in Canada under a name other than the name set out in the order made under subsection 524(1) or 528(1.1).

2005, c. 54, s. 81

Subsections 535(1) and (2) of the Act are replaced by the following:

Principal office

(1) An authorized foreign bank shall at all times have a principal office in the province specified in the order made under subsection 524(1) or 528(1.1) with respect to it.

Change of principal office

(2) An authorized foreign bank may change the address of its principal office within the province specified in the order made under subsection 524(1) or 528(1.1) with respect to it.

2001, c. 9, s. 139(2)

Paragraph 539(1)( b.3 ) of the Act is replaced by the following:

( b.3 )

engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services;

1999, c. 28, s. 35(1)

Subparagraph 540(4)( a )(ii) of the Act is replaced by the following:

(ii)

a foreign bank described in any of subparagraphs 508(1)( a )(

i) to (iii),

1999, c. 28, s. 35(1)

Paragraph 543(1)(

b) of the Act is replaced by the following:

(

b) refer any person to any such financial institution or entity.

1999, c. 28, s. 35(1)

Subsections 545(4) and (5) of the Act are replaced by the following:

Notice before opening account or providing prescribed product

(4) Before an authorized foreign bank opens a deposit account in Canada or provides in Canada any prescribed product that relates to a deposit, the authorized foreign bank shall, in the prescribed manner, give the person requesting the opening of the account or the provision of the product

(

a) a notice in writing that the deposits to the deposit account, or that the deposit that relates to the prescribed product, as the case may be, will not be insured by the Canada Deposit Insurance Corporation or, if the request is made by telephone, a verbal notice to that effect; and

(

b) any other information that may be prescribed.

Other notice

(5) An authorized foreign bank shall, in accordance with any regulations that may be made,

(

a) post notices at all of its branches, and at prescribed points of service, in Canada where deposits are accepted, and on all of its websites at which deposits are accepted in Canada, to inform the public that deposits with the authorized foreign bank are not insured by the Canada Deposit Insurance Corporation; and

(

b) include in its advertisements notices to inform the public that deposits with the authorized foreign bank are not insured by the Canada Deposit Insurance Corporation.

1999, c. 28, s. 35(1)

Subsection 551(1) of the Act is replaced by the following:

Restriction on residential mortgages

(1) An authorized foreign bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance a loan for that purpose, if the amount of the loan, together with the amount outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

1999, c. 28, s. 35(1)

Subsection 557(2) of the Act is replaced by the following:

Provision of information

(2) An authorized foreign bank shall, on making a payment under subsection (1), provide the Bank of Canada, for each deposit or instrument in respect of which the payment is made, with the following information current as of the day the payment is made, in so far as it is known to the authorized foreign bank:

(

a) in the case of a deposit,

(

i) the name of the depositor in whose name the deposit is held,

(ii)

the recorded address of the depositor,

(iii)

the outstanding amount of the deposit, and

(iv)

the branch of the authorized foreign bank at which the last transaction took place in respect of the deposit, and the date of that last transaction; and

(

b) in the case of an instrument,

(

i) the name of the person to whom or at whose request the instrument was issued, certified or accepted,

(ii)

the recorded address of that person,

(iii)

the name of the payee of the instrument,

(iv)

the amount and date of the instrument,

(

v) the name of the place where the instrument was payable, and

(vi)

the branch of the authorized foreign bank at which the instrument was issued, certified or accepted.

Copies of signature cards and signing authorities

(2.1) An authorized foreign bank shall, on written request by the Bank of Canada, provide the Bank of Canada with copies of signature cards and signing authorities relating to any deposit or instrument in respect of which it has made a payment under subsection (1). If it does not have any with respect to a deposit or instrument to which the request relates, it shall so inform the Bank of Canada.

1999, c. 28, s. 35(1)

(1) Subsection 558(1) of the Act is replaced by the following:

Notice of unpaid amount

(1) Subject to subsections (1.1) to (3), an authorized foreign bank shall send to each person to whom a deposit referred to in paragraph 557(1)(

a) is payable, and to each person to whom or at whose request an instrument referred to in paragraph 557(1)(

b) was issued, certified or accepted, a notice stating that the deposit or instrument remains unpaid.

Where notice to be sent

(1.1) The notice is to be sent to the person’s recorded address and, if the person has designated an information system for the receipt of electronic documents, to that designated information system.

1999, c. 28, s. 35(1)

(2) The portion of subsection 558(2) of the Act before paragraph (

a) is replaced by the following:

When notice to be sent

(2) The notice must be sent during the month of January next following the end of the first two-year period, during the month of January next following the end of the first five-year period and also during the month of January next following the end of the first nine-year period

(3) Section 558 of the Act is amended by adding the following after subsection (2):

Notification of transfer to the Bank of Canada

(3) The notice to be sent during the month of January next following the end of the first nine-year period determined under paragraphs (2)(

a) to ( c ), as the case may be, must also

(

a) indicate that in the month of January in the next year the unpaid amounts will be transferred to the Bank of Canada; and

(

b) include the mailing address and websites where information can be obtained on how to claim the unpaid deposit or instrument.

The Act is amended by adding the following after

section 566:

Registered Products

Disclosure required concerning registered products

566.1

(1) Subject to subsection (2), an authorized foreign bank shall not open an account that is or forms part of a registered product in the name of a customer, or enter into an agreement with a customer for a prescribed product or service that is or forms part of a registered product, unless the authorized foreign bank provides, in the prescribed manner, to the individual requesting the account or the prescribed product or service

(

a) information about all charges applicable to the registered product;

(

b) information about how the customer will be notified of any increase in those charges and of any new charges applicable to the registered product;

(

c) information about the authorized foreign bank’s procedures relating to complaints about the application of any charge applicable to the registered product; and

(

d) any other information that may be prescribed.

Regulations

(2) The Governor in Council may make regulations specifying the circumstances under which an authorized foreign bank need not provide the information.

Definition of registered product

(3) In this section, registered product means a product that is defined to be a registered product by the regulations.

Section 573 of the Act is amended by adding the following after subsection (2):

How procedures to be made available

(3) An authorized foreign bank shall make its procedures established under paragraph (1)(

a) available

(

a) in the form of a brochure, at its branches where products or services are offered in Canada;

(

b) on its websites through which products or services are offered in Canada; and

(

c) in written format to be sent to any person who requests them.

Information on contacting Agency

(4) An authorized foreign bank shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(

a) available under subsection (3).

The Act is amended by adding the following before

section 575:

Charges for prescribed products or services

574.1

An authorized foreign bank shall not, directly or indirectly, charge or receive any sum for the provision of any prescribed products or services unless the charge is made by express agreement between it and a customer or by order of a court.

2001, c. 9, s. 158(2)

Subsection 576.1(4.1) of the Act is replaced by the following:

Disclosure

(4.1) An authorized foreign bank shall disclose the prohibition on coercive tied selling set out in subsection (1) in a statement in plain language that is clear and concise, displayed and available to customers and the public at all of its branches where products or services are offered in Canada, on all of its websites through which products or services are offered in Canada and at all prescribed points of service in Canada.

2001, c. 9, s. 159

Subparagraph 576.2( a )(iv) of the Act is replaced by the following:

(iv)

any other matter that may affect their dealings, or their employees’ or representatives’ dealings, with customers or the public;

1999, c. 28, s. 35(1)

(1) Subparagraph 585(3)( b )(iii) of the Act is replaced by the following:

(iii)

has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the authorized foreign bank within the two years immediately preceding the proposed appointment of the firm of accountants as auditor, other than an affiliate that is a subsidiary of the authorized foreign bank acquired under

section 522.15.

1999, c. 28, s. 35(1)

(2) Subsection 585(4) of the English version of the Act is replaced by the following:

Notice of designation

(4) Within 15 days after the appointment of a firm of accountants as auditor, the authorized foreign bank and the firm shall jointly designate a member of the firm who meets the qualifications described in paragraph (2)(

a) to conduct an audit under subsection 592(1) on behalf of the firm and the authorized foreign bank shall without delay notify the Superintendent in writing of the designation.

1999, c. 28, s. 35(1)

Section 598 of the Act is replaced by the following:

Application of sections 244 to 247

Sections 244 to 247 apply, with any modifications that the circumstances require, to an authorized foreign bank as if

(

a) the reference in subsection 245(1) to “records referred to in

section 238” were a reference to “records referred to in subsection 597(1)”; and

(

b) the reference in paragraph 246(1)(

a) to “records of the bank referred to in subsection 238(1)” were a reference to “records of the authorized foreign bank referred to in subsection 597(1)”.

1999, c. 28, s. 35(1)

Subsection 599(5) of the Act is replaced by the following:

Order deemed to be revoked

(5) An order made under subsection 524(1), 528(1) or (1.1) or 534(1) in respect of an authorized foreign bank is deemed to be revoked when the Superintendent authorizes the release of the assets of the authorized foreign bank under subsection (3).

1999, c. 28, s. 35(1)

Subsection 601(2) of the Act is repealed.

1999, c. 28, s. 35(1)

Sections 602 to 604 of the Act are repealed.

2001, c. 9, s. 164

Subsection 606(1) of the Act is replaced by the following:

Confidential information

(1) Subject to

section 609, all information regarding the business or affairs of an authorized foreign bank, or regarding a person dealing with an authorized foreign bank, that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information, is confidential and shall be treated accordingly.

1999, c. 28, s. 35(1)

Section 608 of the Act is repealed.

2001, c. 9, s. 170(2)

Paragraph 619(2)(

g) of the Act is replaced by the following:

(

g) in the opinion of the Superintendent, any other state of affairs exists in respect of the authorized foreign bank that may be materially prejudicial to the interests of the authorized foreign bank’s depositors or creditors in respect of its business in Canada or to those of the owners of any assets under the authorized foreign bank’s administration in respect of its business in Canada, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the authorized foreign bank or its holding body corporate.

1999, c. 28, ss. 36 and 37

Sections 629 to 631 of the Act are repealed.

2001, c. 9, s. 174

Subsection 636(1) of the Act is replaced by the following:

Confidential information

(1) Subject to

section 639, all information regarding the business or affairs of a bank or a foreign bank, or regarding a person dealing with a bank or a foreign bank, that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information, is confidential and shall be treated accordingly.

1999, c. 28, s. 43

Section 638 of the Act is repealed.

2001, c. 9, s. 183; 2006, c. 4, s. 199.1

Section 670 of the Act is replaced by the following:

Sunset provision

(1) Subject to subsections (2) and (3), bank holding companies shall not carry on business after the day that is the fifth anniversary of the day on which this

section comes into force.

Extension

(2) The Governor in Council may, by order, extend by up to six months the time during which bank holding companies may continue to carry on business. No more than one order may be made under this subsection.

Exception

(3) If Parliament dissolves on the fifth anniversary of the day on which this

section comes into force, on any day within the three-month period before that anniversary or on any day within an extension under subsection (2), bank holding companies may continue to carry on business for 180 days after the first day of the first session of the next Parliament.

2001, c. 9, s. 183

Paragraph 678(2)(

a) of the Act is replaced by the following:

(

a) respecting applications referred to in subsection (1), including their form and the information to be contained in them, and authorizing the requesting of additional information in respect of such applications;

2001, c. 9, s. 183

Paragraph 688(1)(

e) of the Act is replaced by the following:

(

e) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

2001, c. 9, s. 183

Subsection 689(1) of the Act is replaced by the following:

Transferring to other Acts

(1) A bank holding company may apply to be continued only as a body corporate under any other Act of Parliament or any Act of the legislature of a province, and it may do so only with the approval in writing of the Minister.

2001, c. 9, s. 183

The portion of

section 694 of the Act before paragraph (

a) is replaced by the following:

Affiliated bank holding company

Despite

section 693 and subject to

section 695, a bank holding company that is affiliated with another entity may, with the consent of that entity,

2005, c. 54, s. 86(2)

Subsection 706(5) of the English version of the Act is replaced by the following:

Material to Superintendent

(5) If the directors exercise their authority under paragraph (1)( b ), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.

The Act is amended by adding the following after

section 716:

Exception — conditions before acquisition

716.1

(1) A bank holding company may permit any of its subsidiaries to acquire shares of the bank holding company through the issuance of those shares by the bank holding company to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares.

Conditions after acquisition

(2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met.

Non-compliance with conditions

(3) If a bank holding company permits any of its subsidiaries to acquire shares of the bank holding company under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite

section 665 and subsection 710(2), the bank holding company must comply with the prescribed requirements.

Section 718 of the Act is amended by adding the following after subsection (4):

Exception

(4.1) Subsection (4) does not apply if

(

a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 308(4); and

(

b) there is to be no return of capital to shareholders as a result of the reduction.

2001, c. 9, s. 183

Subsection 722(2) of the Act is replaced by the following:

Notice to Superintendent

(2) The directors of a bank holding company shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment.

2001, c. 9, s. 183

Subsection 749(2) of the Act is replaced by the following:

Residency requirement

(2) At least one half of the directors of a bank holding company that is a subsidiary of a foreign bank and a majority of the directors of any other bank holding company must be, at the time of each director’s election or appointment, resident Canadians.

2001, c. 9, s. 183

Section 805 of the Act is replaced by the following:

Approval of agreement by Superintendent

An amalgamation agreement must be submitted to the Superintendent for approval and any approval of the agreement under subsection 806(4) by the holders of any class or series of shares of an applicant is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing.

2001, c. 9, s. 183

Paragraph 812(1)(

e) of the Act is replaced by the following:

(

e) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

2001, c. 9, s. 183; 2005, c. 54, s. 122

Section 822 of the Act is replaced by the following:

Requirement to maintain copies and process information in Canada

(1) If the Superintendent is of the opinion that it is incompatible with the fulfilment of the Superintendent’s responsibilities under this Act for a bank holding company to maintain, in another country, copies of records referred to in

section 815 or of its central securities register or for a bank holding company to process, in another country, information or data relating to the preparation and maintenance of those records or of its central securities register — or if the Superintendent is advised by the Minister that, in the opinion of the Minister, it is not in the national interest for a bank holding company to do any of those activities in another country — the Superintendent shall direct the bank holding company to not maintain those copies, or to not process the information or data, as the case may be, in that other country or to maintain those copies or to process the information or data only in Canada.

Bank holding company to comply

(2) A bank holding company shall without delay comply with any direction issued under subsection (1).

2001, c. 9, s. 183

(1) The portion of subsection 875(1) of the French version of the Act before paragraph (

a) is replaced by the following:

Restrictions à l’acquisition

(1) Sous réserve de l’article 876, il est interdit à une personne — ou à l’entité qu’elle contrôle — d’acquérir, sans l’agrément du ministre, des actions d’une société de portefeuille bancaire ou le contrôle d’une entité qui détient de telles actions si l’acquisition, selon le cas :

2001, c. 9, s. 183

(2) Subsection 875(2) of the Act is replaced by the following:

Amalgamation, etc., constitutes acquisition

(2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of a bank holding company, the entity is deemed to be acquiring a significant interest in that class of shares of the bank holding company through an acquisition for which the approval of the Minister is required under subsection (1).

2001, c. 9, s. 183

Section 883 of the Act is replaced by the following:

Restriction on control

(1) No person shall, without the approval of the Minister, acquire control, within the meaning of paragraph 3(1)( d ), of a bank holding company with equity of less than eight billion dollars.

Amalgamation, etc., constitutes acquisition

(2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)( d ), a bank holding company with equity of less than eight billion dollars, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the bank holding company through an acquisition for which the approval of the Minister is required under subsection (1).

2001, c. 9, s. 183

Subsection 908(1) of the French version of the Act is replaced by the following:

Accusé de réception

(1) Lorsque, à son avis, la demande faite dans le cadre de la présente

section est complète, le surintendant la transmet sans délai au ministre et adresse au demandeur un accusé de réception précisant la date où elle a été reçue.

Section 928 of the Act is amended by adding the following after subsection (4):

Application of other provision

(5) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a bank holding company may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met.

Timing of deemed acquisition

(6) If a bank holding company decides to exercise its right under subsection (5), the bank holding company is deemed to be acquiring the control or the substantial investment under the other provision.

2001, c. 9, s. 183

(1) Paragraph 930(1)(

j) of the French version of the Act is replaced by the following:

j) une entité qui est constituée en personne morale ou formée et réglementée autrement que sous le régime d’une loi fédérale ou provinciale et qui exerce principalement, à l’étranger, des activités commerciales qui, au Canada, seraient des opérations bancaires, l’activité d’une société coopérative de crédit, des opérations d’assurance, la prestation de services fiduciaires ou le commerce de valeurs mobilières.

2001, c. 9, s. 183

(2) Paragraph 930(2)(

e) of the Act is replaced by the following:

(

e) engaging in the activities referred to in the definition closed-end fund , mutual fund distribution entity , mutual fund entity or real property brokerage entity in subsection 464(1); and

(3) Section 930 of the Act is amended by adding the following after subsection (3):

Exception

(3.1) Despite paragraph (3)( a ), a bank holding company may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is

(

a) a closed-end fund;

(

b) a mutual fund entity; or

(

c) an entity whose business is limited to engaging in one or more of the following:

(

i) the activities of a mutual fund distribution entity,

(ii)

any activity that a bank is permitted to engage in under paragraph 410(1)( c.2 ), and

(iii)

the provision of investment counselling services and portfolio management services.

2001, c. 9, s. 183

(4) Paragraph 930(5)(

d) of the Act is replaced by the following:

(

d) acquire control of, or acquire or increase a substantial investment in, an entity that engages in Canada in an activity described in paragraph 410(1)( c );

( d.1 )

acquire control of, or acquire or increase a substantial investment in, an entity that engages in an activity described in paragraph 410(1)( c.1 ); or

2001, c. 9, s. 183

(5) Paragraph 930(7)(

a) of the Act is replaced by the following:

(

a) the bank holding company is acquiring control of an entity, other than a specialized financing entity, and the only reason for which the bank holding company would, but for this subsection, require approval for the acquisition is that the entity carries on activities referred to in paragraph (2)( b );

2001, c. 9, s. 183

Subsections 933(3) and (4) of the Act are replaced by the following:

Temporary investment

(3) If a bank holding company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Minister would have been required under subsection 930(5) if the bank holding company had acquired the control, or acquired or increased the substantial investment, under

section 930, the bank holding company must, within 90 days after acquiring control or after acquiring or increasing the substantial investment,

(

a) apply to the Minister for approval to retain control of the entity or to continue to hold the substantial investment in the entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or

(

b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the entity or does not have a substantial investment in the entity.

Indeterminate extension

(4) If a bank holding company, by way of temporary investment, acquires control of, or acquires or increases a substantial investment in, an entity for which the approval of the Superintendent would have been required under subsection 930(6) if the bank holding company had acquired the control, or acquired or increased the substantial investment, under

section 930, the Superintendent may, on application, permit the bank holding company to retain control of the entity or to continue to hold the substantial investment in the entity for an indeterminate period, on any terms and conditions that the Superintendent considers appropriate.

(1) Section 944 of the Act is amended by adding the following after subsection (1):

Approval of series of transactions

(1.1) The Superintendent may, for the purposes of subsection (1), approve a transaction or series of transactions relating to the acquisition or transfer of assets that may be entered into with a person, or with persons of any class of persons, regardless of whether those persons are known at the time of the granting of the approval or not.

2001, c. 9, s. 183

(2) The portion of subsection 944(2) of the Act before paragraph (

a) is replaced by the following:

Exception

(2) Subsection (1) does not apply in respect of

2001, c. 9, s. 183

(3) Paragraph 944(2)(

f) of the Act is replaced by the following:

(

f) assets acquired or transferred under a transaction or series of transactions by a subsidiary of the bank holding company with a financial institution as a result of the subsidiary’s participation in one or more syndicated loans with that financial institution.

2001, c. 9, s. 183

(4) Paragraph 944(4)(

b) of the Act is replaced by the following:

(

b) in the case of assets that are transferred, the value of the assets as reported in the last annual statement of the bank holding company prepared before the transfer or, if the value of the assets is not reported in that annual statement, the value of the assets as it would be reported in the annual statement of the bank holding company if the annual statement had been prepared, in accordance with the accounting principles referred to in subsection 840(4), immediately before the transfer.

2001, c. 9, s. 183

(5) Subsection 944(6) of the Act is replaced by the following:

Total value of all assets

(6) For the purposes of subsection (1), the total value of all assets that the bank holding company or any of its subsidiaries has transferred during the 12-month period referred to in subsection (1) is the total of the value of each of those assets as reported in the last annual statement of the bank holding company prepared before the transfer of the asset or, if the value of any of tho