Bank Act

Version of section 507 from 2007-04-20 to 2008-05-18:

Marginal note:Definitions
  •  (1) The following definitions apply in this Part.

    “designated foreign bank”

    « banque étrangère désignée »

    “designated foreign bank” means a foreign bank that is the subject of a designation order.

    “designation order”

    « arrêté de désignation »

    “designation order” means an order made under subsection 508(1).

    “exemption order”

    « arrêté d’exemption »

    “exemption order” means an order made under subsection 509(1).

    “finance entity”

    « entité s’occupant de financement »

    “finance entity” means a Canadian entity that is a finance entity as defined in the regulations.

    “financial leasing entity”

    « entité s’occupant de crédit-bail »

    “financial leasing entity” means a Canadian entity that is a financial leasing entity as defined in subsection 464(1).

    “financial services entity”

    « entité s’occupant de services financiers »

    “financial services entity” means an entity, other than an entity referred to in any of paragraphs 468(1)(a) to (i) or a leasing entity, that engages in activities at least the prescribed portion — or if no portion is prescribed, 10 per cent — of which, determined in the prescribed manner, consists of one or more of the following activities:

    • (a) providing any financial service;

    • (b) acting as a financial agent;

    • (c) providing investment counselling and portfolio management services;

    • (d) issuing payment, credit or charge cards and, in cooperation with others, including other financial institutions, operating a payment, credit or charge card plan;

    • (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);

    • (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed;

    • (g) engaging in any activity referred to in paragraphs (a) to (f) as an agent for another entity referred to in any of those paragraphs or in any of paragraphs 468(1)(a) to (j); or

    • (h) acquiring or holding control of, or becoming a major owner of, an entity referred to in any of paragraphs (a) to (g) or any of paragraphs 468(1)(a) to (j).

    “foreign cooperative credit society”

    « société coopérative de crédit étrangère »

    “foreign cooperative credit society” means an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province, and that, outside Canada, engages in or carries on the business of a cooperative credit society.

    “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.

    “foreign securities dealer”

    « courtier de valeurs mobilières étranger »

    “foreign securities dealer” means an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province, and that, outside Canada, engages in or carries on the business of dealing in securities.

    “leasing activities”

    « activités de location »

    “leasing activities” means

    • (a) the financial leasing of personal property and the related activities that a financial leasing entity may engage in; and

    • (b) all other leasing of personal property.

    “leasing entity”

    « entité s’occupant de location »

    “leasing entity” means an entity that engages in only

    • (a) leasing activities; or

    • (b) leasing activities and activities other than those described in paragraphs (a) to (h) of the definition “financial services entity”.

    “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 section 522.09, 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 section.

    “non-bank affiliate of a foreign bank”

    « établissement affilié à une banque étrangère »

    “non-bank affiliate of a foreign bank” means a Canadian entity, other than a bank,

    • (a) in which a foreign bank or an entity associated with a foreign bank holds a substantial investment, or

    • (b) that is controlled by a foreign bank or an entity associated with a foreign bank,

    but a Canadian entity is not a non-bank affiliate of a foreign bank by reason only that a bank that is a subsidiary of the foreign bank or of the entity associated with a foreign bank controls, or holds a substantial investment in, the Canadian entity.

    “permitted Canadian entity”

    « entité canadienne admissible »

    “permitted Canadian entity” means a Canadian entity that a foreign bank or an entity associated with a foreign bank may control in accordance with section 522.08, 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 section.

    “representative office”

    « bureau de représentation »

    “representative office” means an office established to represent a foreign bank in Canada that is not subject to the direction of, or management by, an entity incorporated or formed by or under an Act of Parliament or of the legislature of a province, and the personnel of which are employed directly or indirectly by the foreign bank.

    “specialized financing entity”

    « entité s’occupant de financement spécial »

    “specialized financing entity” means a Canadian entity that is a specialized financing entity as defined in the regulations.

  • Marginal note:Entity associated with foreign bank

    (2) For the purposes of this Part,

    • (a) an entity is associated with a foreign bank if

      • (i) the entity controls, or is controlled by, the foreign bank, or

      • (ii) the entity and the foreign bank are controlled by the same person;

    • (b) an entity may be associated with more than one foreign bank; and

    • (c) a foreign bank may be associated with another foreign bank.

  • Marginal note:Entity deemed to be associated with a foreign bank

    (3) For the purposes of this Part, the Minister may deem an entity to be associated with a foreign bank if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written,

    • (a) the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the entity, with one or more other persons such that, if they were one person, they would control the entity;

    • (b) the entity is acting, jointly or in concert, in relation to the shares or ownership interests of the foreign bank, with one or more other persons such that, if they were one person, they would control the foreign bank;

    • (c) another entity that is associated with the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the entity, with one or more other persons such that, if they were one person, they would control the entity;

    • (d) a person who controls the entity is acting, jointly or in concert, in relation to the shares or ownership interests of the foreign bank, with one or more other persons, such that, if they were one person, they would control the foreign bank;

    • (e) a person who controls the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the entity, with one or more other persons, such that, if they were one person, they would control the entity; or

    • (f) two or more persons are acting, jointly or in concert, in relation to the shares or ownership interests of the entity and the foreign bank such that, if they were one person, they would control the entity and the foreign bank.

  • Marginal note:Deemed substantial investment by foreign bank

    (4) For the purposes of this Part, a foreign bank is deemed to hold a substantial investment in a Canadian entity if

    • (a) the foreign bank and one or more entities associated with the foreign bank, or

    • (b) two or more entities associated with the foreign bank

    would, if they were one person, hold a substantial investment in the Canadian entity.

  • Marginal note:Deemed substantial investment by entity associated

    (5) For the purposes of this Part, an entity associated with a foreign bank is deemed to hold a substantial investment in a Canadian entity if

    • (a) the entity and the foreign bank, or

    • (b) the entity and one or more other entities associated with the foreign bank

    would, if they were one person, hold a substantial investment in the Canadian entity.

  • Marginal note:Deemed control by foreign bank

    (6) For the purposes of this Part, a foreign bank is deemed to control a Canadian entity if

    • (a) the foreign bank and one or more entities associated with the foreign bank, or

    • (b) two or more entities associated with the foreign bank

    would, if they were one person, control the Canadian entity.

  • Marginal note:Deemed control by entity associated

    (7) For the purposes of this Part, an entity associated with a foreign bank is deemed to control a Canadian entity if

    • (a) the entity and the foreign bank, or

    • (b) the entity and one or more other entities associated with the foreign bank

    would, if they were one person, control the Canadian entity.

  • Marginal note:Person is a major owner

    (8) For the purposes of this Part, a person, other than a foreign bank or an entity associated with a foreign bank,

    • (a) is a major owner of an unincorporated Canadian entity if the aggregate of any ownership interests, however designated, into which the unincorporated Canadian entity is divided that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 35 per cent of all of the ownership interests into which the unincorporated Canadian entity is divided; and

    • (b) is a major owner of a Canadian entity that is a body corporate if

      • (i) the aggregate of the shares of any class of voting shares of the Canadian entity that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 20 per cent of the outstanding shares of that class of voting shares of the Canadian entity, or

      • (ii) the aggregate of the shares of any class of non-voting shares of the Canadian entity that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 30 per cent of the outstanding shares of that class of non-voting shares of the Canadian entity.

  • Marginal note:Foreign bank a major owner

    (9) For the purposes of this Part, a foreign bank

    • (a) is a major owner of an unincorporated Canadian entity if the aggregate of any ownership interests, however designated, into which the unincorporated Canadian entity is divided that are beneficially owned by the foreign bank and that are beneficially owned by any entities associated with the foreign bank is more than 35 per cent of all of the ownership interests into which the unincorporated Canadian entity is divided; and

    • (b) is a major owner of a Canadian entity that is a body corporate if

      • (i) the aggregate of the shares of any class of voting shares of the Canadian entity that are beneficially owned by the foreign bank and that are beneficially owned by any entities associated with the foreign bank is more than 20 per cent of the outstanding shares of that class of voting shares of the Canadian entity, or

      • (ii) the aggregate of the shares of any class of non-voting shares of the Canadian entity that are beneficially owned by the foreign bank and that are beneficially owned by any entities associated with the foreign bank is more than 30 per cent of the outstanding shares of that class of non-voting shares of the Canadian entity.

  • Marginal note:Associated entity a major owner

    (10) For the purposes of this Part, an entity associated with a foreign bank

    • (a) is a major owner of an unincorporated Canadian entity if the aggregate of any ownership interests, however designated, into which the unincorporated Canadian entity is divided that are beneficially owned by the entity associated with the foreign bank, that are beneficially owned by the foreign bank and that are beneficially owned by any other entities associated with the foreign bank is more than 35 per cent of all of the ownership interests into which the unincorporated Canadian entity is divided; and

    • (b) is a major owner of a Canadian entity that is a body corporate if

      • (i) the aggregate of the shares of any class of voting shares of the Canadian entity that are beneficially owned by the entity associated with the foreign bank, that are beneficially owned by the foreign bank and that are beneficially owned by any other entities associated with the foreign bank is more than 20 per cent of the outstanding shares of that class of voting shares of the Canadian entity, or

      • (ii) the aggregate of the shares of any class of non-voting shares of the Canadian entity that are beneficially owned by the entity associated with the foreign bank, that are beneficially owned by the foreign bank and that are beneficially owned by any other entities associated with the foreign bank is more than 30 per cent of the outstanding shares of that class of non-voting shares of the Canadian entity.

  • Marginal note:Deemed major owner — person

    (11) For the purposes of this Part, the Minister may deem a person to be a major owner of a Canadian entity if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written, the person is acting, jointly or in concert, in relation to the shares or ownership interests of the Canadian entity, with one or more other persons such that, if they were one person, they would be a major owner of the Canadian entity.

  • Marginal note:Deemed major owner — foreign bank

    (12) For the purposes of this Part, the Minister may deem a foreign bank to be a major owner of a Canadian entity if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written,

    • (a) the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the Canadian entity, with one or more other persons such that, if they were one person, they would be a major owner of the Canadian entity; or

    • (b) two or more persons are acting, jointly or in concert in relation to the shares or ownership interests of the Canadian entity and in relation to the shares or ownership interests of the foreign bank such that, if they were one person, they would control the foreign bank and be a major owner of the Canadian entity.

  • Marginal note:Deemed major owner — entity associated with a foreign bank

    (13) For the purposes of this Part, the Minister may deem an entity associated with a foreign bank to be a major owner of a Canadian entity if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written, the entity associated with the foreign bank is acting, jointly or in concert, in relation to the shares and ownership interests of the Canadian entity with one or more other persons, such that, if they were one person, they would be a major owner of the Canadian entity.

  • Marginal note:Member of foreign bank’s group

    (14) For the purposes of this Part, a member of a foreign bank’s group is any of the following:

    • (a) an entity associated with the foreign bank;

    • (b) an entity in which the foreign bank or an entity associated with the foreign bank holds a substantial investment; and

    • (c) a prescribed entity, in relation to the foreign bank.

  • Marginal note:Foreign bank that has a financial establishment in Canada

    (15) For the purposes of this Part, a foreign bank has, or is deemed to have, a financial establishment in Canada 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) is a foreign securities dealer, or a foreign cooperative credit society, that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or to carry on the business of dealing in securities or the business of a cooperative credit society; or

    • (d) controls, or is a major owner of,

      • (i) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i), or

      • (ii) a Canadian entity that is a financial services entity.

  • Marginal note:Associated entity that has a financial establishment in Canada

    (16) For the purposes of this Part, an entity associated with a foreign bank has, or is deemed to have, a financial establishment in Canada if the entity, 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) is a foreign securities dealer, or a foreign cooperative credit society, that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or to carry on the business of dealing in securities or the business of a cooperative credit society; or

    • (d) controls, or is a major owner of,

      • (i) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i), or

      • (ii) a Canadian entity that is a financial services entity.

  • Marginal note:Regulations concerning exemption from associated status

    (17) The Governor in Council may make regulations

    • (a) respecting the exemption, from the application of any provision of this Act, of any class or classes of entities associated with a foreign bank from the status of being associated with a foreign bank; and

    • (b) authorizing the Minister, by order, and subject to any terms and conditions that the Minister considers appropriate, to deem, for the purposes of any provision of this Act, any entity not to be an entity associated with a foreign bank.

  • Marginal note:Revocation or variation of order

    (18) The Minister may, by further order, revoke or vary any order referred to in paragraph (17)(b) and any such revocation or variation comes into effect three months after the date the further order is made unless the Minister and the entity to which the order relates agree that the revocation or variation is to take effect at some other time agreed to by them.

  • Marginal note:Publication

    (19) If the Minister makes an order referred to in paragraph (17)(b) or subsection (18), the Minister shall publish in the Canada Gazette a notice of the making of the order.

  • 1991, c. 46, s. 507;
  • 1997, c. 15, s. 76;
  • 1999, c. 28, s. 27;
  • 2001, c. 9, s. 132;
  • 2007, c. 6, s. 48.