Bank Act (S.C. 1991, c. 46)

Marginal note:Exception

• 374.1 (1) Despite section 374, if a bank with equity of twelve billion dollars or more was formed as the result of an amalgamation, a person who is a major shareholder of the bank on the effective date of the letters patent of amalgamation shall do all things necessary to ensure that the person is no longer a major shareholder of the bank on the day that is one year after that day or on the day that is after any shorter period specified by the Minister.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who is a major shareholder of a federal credit union.

• Marginal note:Exception — widely held banks and bank holding companies

  (2) Subsection (1) does not apply to a widely held bank or a widely held bank holding company that controlled, within the meaning of paragraphs 3(1)(a) and (d), one of the applicants for the letters patent of amalgamation and that has controlled, within the meaning of those paragraphs, the amalgamated bank since the effective date of those letters patent.

• Marginal note:Exception — insurance holding companies and certain institutions

  (3) Subsection (1) does not apply to any of the following that controlled, within the meaning of paragraph 3(1)(d), one of the applicants for the letters patent of amalgamation if it has controlled, within the meaning of that paragraph, the amalgamated bank since the effective date of those letters patent:

  • (a) a widely held insurance holding company;

  • (b) an eligible Canadian financial institution, other than a bank; or

  • (c) an eligible foreign institution.

• Marginal note:Exception — other entities

  (4) Subsection (1) does not apply to an entity that controls, within the meaning of paragraphs 3(1)(a) and (d), the amalgamated bank if the entity is controlled, within the meaning of those paragraphs, by a widely held bank or widely held bank holding company to which subsection (2) applies that controls the amalgamated bank.

• Marginal note:Exception — other entities

  (5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the amalgamated bank if the entity is controlled, within the meaning of that paragraph, by any of the following:

  • (a) a widely held insurance holding company to which subsection (3) applies that controls the amalgamated bank;

  • (b) an eligible Canadian financial institution to which subsection (3) applies, other than a bank, that controls the amalgamated bank; or

  • (c) an eligible foreign institution to which subsection (3) applies that controls the amalgamated bank.

• Marginal note:Extension

  (6) If general market conditions so warrant and the Minister is satisfied that the person has used the person’s best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which the person must comply with that subsection.

Marginal note:Limitation on share holdings

• 375 (1) If a person is a major shareholder of a bank with equity of less than twelve billion dollars and the bank’s equity reaches twelve billion dollars or more, the person shall do all things necessary to ensure that the person is not a major shareholder of the bank on the day that is three years after the day the bank’s equity reached twelve billion dollars.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who is a major shareholder of a federal credit union.

• Marginal note:Exception

  (2) Subsection (1) does not apply if any of subsections 374(2) to (6) applies to the person in respect of the bank.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the person has used the person’s best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which the person must comply with that subsection.

Marginal note:Obligation of widely held bank

• 376 (1) If a widely held bank with equity of twelve billion dollars or more controls another bank and a person becomes a major shareholder of the other bank or of any entity that also controls the other bank, the widely held bank must do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the other bank or entity that controls the other bank,

  • (a) the widely held bank no longer controls the other bank; or

  • (b) the other bank or the entity that controls the other bank does not have any major shareholder other than the widely held bank or any entity that the widely held bank controls.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a federal credit union that controls a bank.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of a bank with equity of less than two hundred and fifty million dollars or any other amount that is prescribed.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the widely held bank has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Obligation of widely held bank

• 376.01 (1) Despite subsection 376(1), if a widely held bank with equity of twelve billion dollars or more controls a bank (in this subsection referred to as the “other bank”) in respect of which that subsection does not apply by reason of subsection 376(2) and the equity of the other bank reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the other bank reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the other bank or of any entity that also controls the other bank, the widely held bank must do all things necessary to ensure that, on the day that is three years after that day,

  • (a) the widely held bank no longer controls the other bank; or

  • (b) the other bank or the entity that controls the other bank does not have any major shareholder other than the widely held bank or any entity that the widely held bank controls.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a federal credit union that controls a bank.

• Marginal note:Extension

  (2) If general market conditions so warrant and the Minister is satisfied that the widely held bank has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Prohibition against significant interest

• 376.1 (1) No person who has a significant interest in any class of shares of a widely held bank with equity of twelve billion dollars or more may have a significant interest in any class of shares of a subsidiary of the widely held bank that is a bank or a bank holding company.

• Marginal note:Exception — federal credit union

  (2) Subsection (1) does not apply in respect of a person who has a significant interest in any class of shares of a federal credit union.

Marginal note:Prohibition against significant interest

• 376.2 (1) No person who has a significant interest in any class of shares of a bank may have a significant interest in any class of shares of any widely held bank with equity of twelve billion dollars or more, or of any widely held bank holding company with equity of twelve billion dollars or more, that controls the bank.

• Marginal note:Exception — federal credit union

  (2) Subsection (1) does not apply in respect of a person who has a significant interest in any class of shares of a federal credit union.

Marginal note:Prohibition against control

• 377 (1) No person shall control, within the meaning of paragraph 3(1)(d), a bank with equity of twelve billion dollars or more.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who controls a federal credit union.

• Marginal note:Exception

  (2) Subsection (1) does not apply if any of subsections 374(2) to (6) applies to the person in respect of the bank.

Marginal note: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 twelve billion dollars.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who acquires control of a federal credit union.

• Marginal note: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 twelve 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).

Marginal note:Prohibition against control — federal credit union

• 377.2 (1) No person shall, without the approval of the Minister, control, within the meaning of paragraph 3(1)(a.1) or (d), a federal credit union.

• Marginal note:Approval

  (2) The Minister may grant the approval only if

  • (a) the control is in relation to a federal credit union that is being incorporated or a body corporate that is being continued as a federal credit union; and

  • (b) the applicant for the approval has given an undertaking under subsection 973.02(1) to cease to control the federal credit union on a date specified by the Minister.

Marginal note:Former Schedule I banks with equity of less than five billion dollars

• 378 (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 twelve billion dollars or more.

• Marginal note: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.

• Marginal note:Non-application of subsection (1)

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

Marginal note:Prohibition

378.1 No person may control or be a major shareholder of a bank if the person or an entity affiliated with the person

• (a) has control of or has a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in; or

• (b) engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in.

Marginal note:Prohibition

378.2 No person who controls a bank or who is a major shareholder of a bank, and no entity affiliated with that person, may

• (a) control or have a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in; or

• (b) engage in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in.

Marginal note:Constraint on registration

379 A bank must not, unless the acquisition of the share or membership share has been approved by the Minister, record in its securities register or members register, as the case may be, a transfer or issue of any share or membership share of the bank to any person or to any entity controlled by a person if

• (a) the transfer or issue of the share or membership share would cause the person to have a significant interest in any class of shares or in membership shares of the bank; or

• (b) the person has a significant interest in a class of shares or in membership shares of the bank and the transfer or issue of the share or membership share would increase the significant interest of the person in that class of shares or in membership shares.

Marginal note:Exemption

• 380 (1) On application by a bank, other than a bank with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank from the application of sections 373 and 379.

• Marginal note:Exception — federal credit union

  (2) Subsection (1) does not apply in respect of a federal credit union.