Bank Act (S.C. 1991, c. 46)

Marginal note:Deemed loan

580. For the purposes of sections 425 to 436, as incorporated by section 555, where an authorized foreign bank accepts a bill of exchange drawn on it and not payable on demand or pays or makes money available for the payment of such a bill of exchange, or issues a guarantee, or otherwise makes a promise to effect a payment, the authorized foreign bank is deemed to lend money or make an advance.

Marginal note:Investment standards

581. An authorized foreign bank shall establish and adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return.

Marginal note:Requirement to maintain assets on deposit

• 582. (1) An authorized foreign bank shall maintain on deposit in Canada with a Canadian financial institution approved by the Superintendent unencumbered assets of a type approved by the Superintendent the total value of which determined in accordance with the accounting principles referred to in subsection 308(4) shall equal

  • (a) in the case of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2), one hundred thousand dollars; and

  • (b) in any other case, the greater of

    • (i) five million dollars, and

    • (ii) five per cent of the liabilities of the authorized foreign bank in respect of its business in Canada.

• Marginal note:Deposit agreement

  (2) The assets referred to in subsection (1) shall be kept with the Canadian financial institution pursuant to a deposit agreement entered into with the prior approval of the Superintendent.

Marginal note:Financial year

• 583. (1) The financial year of an authorized foreign bank in respect of its business in Canada may end on any of March 31, June 30, September 30 or December 31.

• Marginal note:First financial year

  (2) If the first financial year of an authorized foreign bank would end less than four months after the authorized foreign bank has obtained an order under subsection 534(1) approving the commencement and carrying on of business in Canada, the first financial year of the authorized foreign bank ends on March 31, June 30, September 30 or December 31, as the case may be, in the next calendar year.

Marginal note:Definitions

584. In sections 585 to 596, the expressions “firm of accountants” and “member” have the meanings assigned to those expressions by section 313.