Financial Consumer Agency of Canada Act (S.C. 2001, c. 9)
Full Document:
Assented to 2001-06-14
128. (1) Subsection 487(2) of the Act is amended by striking out the word “or” at the end of paragraph (b) and by adding the following after paragraph (c):
(d) transactions approved by the Minister under subsection 678(1) of this Act or subsection 715(1) of the Insurance Companies Act; or
(e) if a bank is controlled by a widely held bank holding company or a widely held insurance holding company, transactions approved by the Superintendent that are entered as part of, or in the course of, a restructuring of the holding company or of any entity controlled by it.
Marginal note:1997, c. 15, s. 69
(2) Subsection 487(4) of the Act is replaced by the following:
Marginal note:Exception for holding body corporate
(4) A holding body corporate of a bank is not a related party of the bank if the holding body corporate is a Canadian financial institution that is referred to in any of paragraphs (a) to (d) of the definition “financial institution” in section 2.
129. The Act is amended by adding the following after section 495:
Marginal note:Transactions with holding companies
495.1 (1) Subject to subsection (2) and sections 495.2 and 495.3, if a widely held bank holding company or a widely held insurance holding company has a significant interest in any class of shares of a bank, the bank may enter into any transaction with the holding company or with any other related party of the bank that is an entity in which the holding company has a substantial investment.
Marginal note:Policies and procedures
(2) The bank shall adhere to policies and procedures established under subsection 195(3) when entering into the transaction.
Marginal note:Restriction
495.2 (1) If a bank enters into a transaction with a related party of the bank with whom the bank may enter into transactions under subsection 495.1(1) and that is not a federal financial institution, the bank shall not directly or indirectly make, take an assignment of or otherwise acquire a loan to the related party, make an acceptance, endorsement or other guarantee on behalf of the related party or make an investment in the securities of the related party if, immediately following the transaction, the aggregate financial exposure, as that expression is defined by the regulations, of the bank would exceed
(a) in respect of all transactions of the bank with the related party, the prescribed percentage of the bank’s regulatory capital or, if no percentage is prescribed, five per cent of the bank’s regulatory capital; or
(b) in respect of all transactions of the bank with such related parties of the bank, the prescribed percentage of the bank’s regulatory capital or, if no percentage is prescribed, ten per cent of the bank’s regulatory capital.
Marginal note:Order
(2) If the Superintendent is of the opinion that it is necessary for the protection of the interests of the depositors and creditors of a bank, the Superintendent may, by order,
(a) reduce the limit in paragraph (1)(a) or (b) that would otherwise apply to the bank; and
(b) impose limits on transactions by the bank with related parties with whom the bank may enter into transactions under subsection 495.1(1) that are federal financial institutions.
Marginal note:Order
(3) The Superintendent may, by order, increase the limit in paragraph (1)(a) or (b) that would otherwise apply to a bank on transactions by the bank with related parties that are financial institutions that are regulated in a manner acceptable to the Superintendent.
Marginal note:Assets transactions
495.3 (1) Despite subsection 494(3), a bank shall not, without the approval of the Superintendent and its conduct review committee, directly or indirectly acquire assets from a related party of the bank with whom the bank may enter into transactions under subsection 495.1(1) that is not a federal financial institution, or directly or indirectly transfer assets to such a related party if
A + B > C
where
- A
- is the value of the assets;
- B
- 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 twelve months ending immediately before the acquisition or transfer; and
- C
- is five per cent, or the percentage that may be prescribed, of the total value of the assets of the bank, as shown in the last annual statement of the bank prepared before the acquisition or transfer.
Marginal note:Exception
(2) The prohibition in subsection (1) does not apply in respect of assets purchased or otherwise acquired under subsection 494(1), assets sold under subsection 494(2) or any other assets as may be prescribed.
Marginal note:Exception
(3) The approval of the Superintendent is not required if
(a) the bank sells assets under a sale agreement that is approved by the Minister under section 236; or
(b) the bank or its subsidiary acquires 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.
Marginal note:Value of assets
(4) For the purposes of “A” in subsection (1), the value of the assets is
(a) in the case of assets that are acquired, the purchase price of the assets or, if the assets are shares of, or ownership interests in, an entity the assets of which will be included in the annual statement of the bank after the acquisition, the fair market value of the assets; and
(b) in the case of assets that are transferred, the book value of the assets as stated in the last annual statement of the bank prepared before the transfer or, if the assets are shares of, or ownership interests in, an entity the assets of which were included in the last annual statement of the bank before the transfer, the value of the assets as stated in the annual statement.
Marginal note:Total value of all assets
(5) For the purposes of subsection (1), the total value of all assets that the bank or any of its subsidiaries has acquired during the period of twelve months referred to in subsection (1) is the purchase price of the assets or, if the assets are shares of, or ownership interests in, an entity the assets of which immediately after the acquisition were included in the annual statement of the bank, the fair market value of the assets of the entity at the date of the acquisition.
Marginal note: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 period of twelve months referred to in subsection (1) is the book value of the assets as stated in the last annual statement of the bank prepared before the transfer or, if the assets are shares of, or ownership interests in, an entity the assets of which were included in the last annual statement of the bank before the transfer, the value of the assets of the entity as stated in the annual statement.
130. Paragraph 501(2)(b) of the Act is replaced by the following:
(b) in respect of any other transaction,
(i) terms and conditions, including those relating to price, rent or interest rate, that might reasonably be expected to apply in a similar transaction in an open market under conditions requisite to a fair transaction between parties who are at arm’s length and who are acting prudently, knowledgeably and willingly, or
(ii) if the transaction is one that would not reasonably be expected to occur in an open market between parties who are at arm’s length, terms and conditions, including those relating to price, rent or interest rate, that would reasonably be expected to provide the bank with fair value, having regard to all the circumstances of the transaction, and that would be consistent with the parties to the transaction acting prudently, knowledgeably and willingly.
131. Section 506 of the Act is replaced by the following:
Marginal note:Order to void contract or to grant other remedy
506. (1) If a bank enters into a transaction that it is prohibited from entering into by this Part, the bank or the Superintendent may apply to a court for an order setting aside the transaction or for any other appropriate remedy, including an order directing that the related party of the bank involved in the transaction account to the bank for any profit or gain realized or that any director or senior officer of the bank who authorized the transaction compensate the bank for any loss or damage incurred by the bank.
Marginal note:Time limit
(2) An application under subsection (1) in respect of a particular transaction may only be made within the period of three months following the day the notice referred to in section 505 in respect of the transaction is given to the Superintendent or, if no such notice is given, the day the Superintendent becomes aware of the transaction.
Marginal note:Certificate
(3) For the purposes of subsection (2), a document purporting to have been issued by the Superintendent, certifying the day on which the Superintendent became aware of the transaction, shall, in the absence of evidence to the contrary, be received in evidence as conclusive proof of that fact without proof of the signature or of the official character of the person appearing to have signed the document and without further proof.
Marginal note:1991, c. 47, par. 756(1)(b); 1994, c. 47, s. 26; 1997, c. 15, ss. 76 to 85; 1999, c. 28, ss. 27 to 34, c. 31, s. 15(F)
132. Part XII of the Act is replaced by the following:
PART XIIFOREIGN BANKS
Division 1Interpretation and Application
Marginal note:Definitions
507. (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 “mutual fund entity” or “mutual fund distribution 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.
Marginal note:Designation order
508. (1) Subject to subsection (2), the Minister may, by order, designate a foreign bank to be a designated foreign bank for the purposes of this Part if
(a) the foreign bank 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;
(b) the foreign bank engages, directly or indirectly, 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 thereto;
(c) the foreign bank, in the opinion of the Minister, after consultation with the Superintendent, is regulated as or like a bank, according to the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business; or
(d) the foreign bank is not a foreign bank described in any of paragraphs (a) to (c) and one of the following conditions is met:
(i) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total assets of foreign banks described in any of paragraphs (a) to (c) that are associated with the foreign bank to the value of the total assets of the foreign bank and entities associated with the foreign bank, or
(ii) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total revenues of foreign banks described in any of paragraphs (a) to (c) that are associated with the foreign bank to the value of the total revenues of the foreign bank and entities associated with the foreign bank.
Marginal note:Restriction
(2) The Minister may only make an order under subsection (1) in respect of a foreign bank described in any of paragraphs (1)(a) to (c) if
(a) the foreign bank or an entity controlled by the foreign bank is or will be
(i) engaging in or carrying on business in Canada, other than holding, managing or otherwise dealing with real property,
(ii) maintaining a branch in Canada, other than an office referred to in section 522,
(iii) 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,
(iv) acquiring or holding control of, or a substantial investment in, a Canadian entity, or
(v) acquiring or holding any share or ownership interest in a Canadian entity and
(A) an entity associated with the foreign bank holds control of, or a substantial investment in, the Canadian entity, or
(B) 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; or
(b) the foreign bank is controlled by an individual and
(i) one of the following conditions is met:
(A) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total assets of the foreign bank and other foreign banks described in any of paragraphs (1)(a) to (c) that are associated with the foreign bank to the value of the total assets of the foreign bank and entities associated with the foreign bank, or
(B) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total revenues of the foreign bank and other foreign banks described in any of paragraphs (1)(a) to (c) that are associated with the foreign bank to the value of the total revenues of the foreign bank and entities associated with the foreign bank, and
(ii) an entity associated with the foreign bank is or will be
(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, or
(D) acquiring or holding control of, or a substantial investment in, a Canadian entity.
Marginal note:Subsections 507(4) to (7) do not apply
(2.1) 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 paragraph (2)(a).
Marginal note:Deeming
(3) A foreign bank that was designated under subsection 521(1.06) as that subsection read immediately before the coming into force of this subsection and whose designation has not been revoked is deemed to be the subject of a designation order.
Marginal note:Exemption order
509. (1) The Minister may, by order, determine that this Part, other than this section, sections 507 and 508, subsection 522.25(3), sections 522.26 and 522.28, subsection 522.29(2) and section 522.3, does not apply to a foreign bank.
Marginal note:Restriction
(2) No order may be made under subsection (1) in respect of a designated foreign bank or a foreign bank that is associated with a designated foreign bank.
Marginal note:Deemed order
(3) An exemption order is deemed to have been made on the coming into force of this subsection in respect of a foreign bank if, immediately before the coming into force of this subsection, the foreign bank had received consent under subsection 521(1), the consent had not been revoked and the foreign bank or an entity associated with it was not designated under subsection 521(1.06), as those subsections read immediately before the coming into force of this subsection.
Marginal note:Change in circumstances
(4) A foreign bank that is the subject of an exemption order shall advise the Minister in writing of any change in circumstances that may affect its eligibility for a designation order.
Marginal note:Revocation of order
(5) An exemption order in respect of a foreign bank is deemed to be revoked if the foreign bank, or another foreign bank that is an entity associated with the foreign bank, is a designated foreign bank. The Minister may revoke an exemption order in respect of a foreign bank if the conditions for designation set out in section 508 are met by the foreign bank or by another foreign bank that is an entity associated with the foreign bank.
Marginal note:Effect of exemption order on associated entities
(6) This Part, other than this section, sections 507 and 508, subsection 522.25(3), sections 522.26 and 522.28, subsection 522.29(2) and section 522.3, does not apply to an entity associated with a foreign bank that is the subject of an exemption order.
Marginal note:Authorization
(7) If an exemption order in respect of a foreign bank is revoked or deemed to be revoked under subsection (5), the Minister may, by order, authorize the foreign bank and any entity associated with it to continue to hold control of, or a substantial investment in, a Canadian entity that the foreign bank or the entity associated with the foreign bank would not otherwise be allowed to continue to hold under Division 3 or 4 or to continue to engage in any activities or to engage in or carry on any business or to maintain a branch that the foreign bank or the entity associated with the foreign bank would not otherwise be allowed to continue to engage in or carry on or maintain under Division 3 or 4.
Marginal note:Non-application re federal institutions associated with a foreign bank
509.1 Subsection 510(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.
Division 2General Prohibitions and Exceptions
Marginal note:Prohibited activities
510. (1) Except as permitted by this Part, a foreign bank or an entity associated with a foreign bank shall not
(a) in Canada, engage in or carry on
(i) any business that a bank is permitted to engage in or carry on under this Act, or
(ii) any other business;
(b) maintain a branch in Canada for any purpose;
(c) establish, maintain or acquire for use in Canada an automated banking machine, a remote service unit or a similar automated service, or in Canada accept data from such a machine, unit or service; or
(d) acquire or hold control of, or a substantial investment in, a Canadian entity.
Marginal note:Deeming re acts of agent, etc. — foreign banks
(2) For the purposes of this Part, a foreign bank is deemed to be carrying out or to have carried out anything prohibited by subsection (1) if it is carried out by a nominee or agent of the foreign bank acting as such.
Marginal note:Deeming re acts of agent, etc. — associated entities
(3) For the purposes of this Part, an entity associated with a foreign bank is deemed to be carrying out or to have carried out anything prohibited by subsection (1) if it is carried out by a nominee or agent of the entity associated with the foreign bank acting as such.
Marginal note:Exception re accessing accounts
511. 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 entering into an arrangement with one or more Canadian financial institutions by which customers of the foreign bank or the entity who are natural persons not ordinarily resident in Canada may access in Canada their accounts located outside Canada through the use of automated banking machines located in Canada and operated by the Canadian financial institution or institutions.
Marginal note:Exception re quotations
512. 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 establishing, maintaining or using a private telephone service or similar facility for the purpose of quoting to customers in Canada, or entering with customers in Canada into verbal agreements relating to, foreign exchange, deposit or loan rates if there is no accounting or information processing involved in the private telephone service or similar facility.
Marginal note:Exception re automated services
513. (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) to engage in or carry on the business of dealing in securities or the business of a cooperative credit society 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 of dealing in securities engaged in or carried on by it in accordance with provincial laws relating to securities dealing; 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.
Marginal note:Non-application
(2) Paragraph 510(1)(c) does not apply to
(a) a Canadian entity referred to in any of paragraphs 468(1)(g) to (i);
(b) a prescribed Canadian entity, other than a permitted Canadian entity, that is controlled by a Canadian entity referred to in paragraph (a); or
(c) any other Canadian entity, other than a limited commercial entity, that is acquired or held by a foreign bank or an entity associated with a foreign bank in accordance with Divisions 4 and 5, and that has received the approval of the Minister under paragraph 522.22(1)(i).
Marginal note:Exception re real property holding and management
514. Except as may be prescribed, paragraphs 510(1)(a) and (b) do not apply in respect of the holding, managing and other dealing with real property in Canada by a foreign bank or an entity associated with a foreign bank.
Marginal note:Non-application re Canadian entity associated with a foreign bank
515. Paragraphs 510(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.
Marginal note:Change of status
516. (1) If a foreign bank maintains a branch or engages in or carries on business in Canada that it maintained or engaged in or carried on before becoming a foreign bank and that branch or business is not permitted by or under this Part, the foreign bank may continue to maintain that branch or engage in or carry on that business for a period of six months from the time it became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Marginal note:Change of status
(2) If a foreign bank holds control of or holds a substantial investment in a Canadian entity and it did so before becoming a foreign bank and that holding is not permitted by or under this Part, the foreign bank may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months from the time it became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Marginal note:Change of status
517. (1) If an entity associated with a foreign bank maintains a branch or engages in or carries on business in Canada that it maintained or engaged in or carried on before the foreign bank became a foreign bank and that branch or business is not permitted by or under this Part, the entity may continue to maintain that branch or engage in or carry on that business for a period of six months from the time the foreign bank became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Marginal note:Change of status
(2) If an entity associated with a foreign bank holds control of or holds a substantial investment in a Canadian entity and it did so before the foreign bank became a foreign bank and that holding is not permitted by or under this Part, the entity may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months from the time the foreign bank became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Marginal note: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 applies to the foreign bank or section 517 applies to the 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).
Marginal note:Prohibition re guarantee and acceptance of securities and bills
518. (1) Subject to subsections (2) to (4),
(a) a foreign bank shall not guarantee any securities or accept any bills of exchange or depository bills that are issued by a person resident in Canada and that are intended by the issuer or by any party to the security or bill to be sold or traded in Canada; and
(b) no person shall participate in any arrangement in connection with a guarantee or acceptance prohibited by paragraph (a).
Marginal note:Exception
(2) Subsection (1) does not apply in respect of the guarantee or acceptance by a foreign bank of securities, bills of exchange or depository bills that are issued by
(a) a non-bank affiliate of the foreign bank;
(b) any other person resident in Canada and guaranteed or accepted by
(i) a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank,
(ii) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i) in which a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank, holds a substantial investment,
(iii) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i) that is controlled by a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank,
(iv) a Canadian entity referred to in any of paragraphs 468(1)(b) to (i) that is a non-bank affiliate of the foreign bank, or
(v) a prescribed entity;
(c) a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank;
(d) a Canadian entity in which a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank, holds a substantial investment;
(e) a Canadian entity controlled by a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank; or
(f) a prescribed entity.
Marginal note:Exception
(3) Subsection (1) does not apply in respect of
(a) the business in Canada of an authorized foreign bank; or
(b) a foreign insurance company in relation to its insurance business in Canada.
Marginal note: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) to engage in or carry on the business of dealing in securities or the business of a cooperative credit society may
(a) if it is a foreign securities dealer, guarantee any securities or accept any bills of exchange or depository bills in relation to its business of dealing in securities engaged in or carried on by it in accordance with provincial laws relating to securities dealing; and
(b) if it is a foreign cooperative credit society, guarantee any securities or accept any bills of exchange or depository bills in relation 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.
Marginal note:Prohibited activities — non-bank affiliates
519. (1) Despite anything in this Part, but subject to subsection (5) and section 509, 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.
Marginal note:Disclosure of status
(2) Despite anything in this Part, but subject to subsections (4) to (6) and section 509, a non-bank affiliate of a foreign bank that carries on as part of its business the provision of financial services shall not borrow money in Canada from the public without disclosing that
(a) the non-bank affiliate is not a member institution of the Canada Deposit Insurance Corporation;
(b) the liability incurred by the non-bank affiliate through the borrowing is not a deposit; and
(c) the non-bank affiliate is not regulated as a financial institution in Canada.
Marginal note:Manner of disclosure
(3) The disclosure shall 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.
Marginal note:Exception for certain borrowing
(4) Subsection (2) 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.
Marginal note:Exception — deposit-taking institutions
(5) Subsections (1) and (2) do not apply to a non-bank affiliate that is
(a) a trust or loan corporation incorporated 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.
Marginal note:Exception — insurance company or securities dealer
(6) Subsection (2) does not apply if the non-bank affiliate is
(a) an insurance company incorporated under an Act of Parliament or of the legislature of a province;
(b) a bank holding company or an insurance holding company;
(c) 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;
(d) a financial institution referred to in paragraph (g) of the definition “financial institution” in section 2; or
(e) a prescribed entity.
Marginal note:Prohibition re deposits
520. (1) Despite anything in this Part, but subject to subsection (5) and section 509, 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, 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.
Marginal note:Disclosure of status
(2) Despite anything in this Part, but subject to subsections (4) to (6) and section 509, a foreign bank or entity referred to in subsection (1) that carries on, as part of its business in Canada, the provision of financial services shall not borrow money in Canada from the public without disclosing that
(a) the foreign bank or entity is not a member institution of the Canada Deposit Insurance Corporation;
(b) the liability incurred through the borrowing is not a deposit; and
(c) the foreign bank or entity is not regulated as a financial institution in Canada.
Marginal note:Manner of disclosure
(3) The disclosure shall 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.
Marginal note:Exception for certain borrowing
(4) Subsection (2) 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.
Marginal note:Non-application — authorized foreign banks and foreign cooperative credit societies
(5) Subsections (1) and (2) do 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.
Marginal note:Non-application foreign insurance company or securities dealer
(6) Subsection (2) does not apply to a foreign bank, or an entity associated with a foreign bank, that is
(a) a foreign insurance company; or
(b) a foreign securities dealer that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of dealing in securities.
Marginal note:Regulations
521. The Governor in Council may make regulations exempting any class or classes of businesses, investments, activities and branches from any of the prohibitions set out in section 510 or 518.
Marginal note:Permitted Canadian offices
522. A foreign bank may
(a) with the approval of the Superintendent and
(i) subject to any terms and conditions that are attached to the approval, and
(ii) subject to and in accordance with rules that are prescribed in relation to the operation of representative offices and the conduct of their personnel,
maintain representative offices in Canada that are registered with the Superintendent in the prescribed manner; and
(b) with the approval of the Governor in Council and subject to any terms and conditions that are attached to the approval, locate its head office in Canada and, from that office, issue directions and do all other things reasonably necessary for the conduct of its banking business outside Canada.
Marginal note:Examination of representative offices
522.01 (1) The Superintendent shall, from time to time, make or cause to be made any examination and inquiry into the operation of any representative office of a foreign bank and the conduct of the personnel in that office that the Superintendent considers necessary for the purpose of ascertaining whether the office is being operated, and whether the personnel of the office are conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522(a).
Marginal note:Powers of Superintendent
(2) For the purposes of subsection (1), the Superintendent and any person acting under the direction of the Superintendent have the same powers and obligations that the Superintendent has in relation to the examination of banks under this Act.
Marginal note:Cancellation of registration
522.02 The Superintendent may, by order, cancel the registration of a representative office of a foreign bank if
(a) the foreign bank requests the Superintendent to cancel the registration; or
(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).
Marginal note:Business conducted from head office in Canada
522.03 (1) Subject to subsections (2) and (3), if the head office of a foreign bank is located in Canada under paragraph 522(b), the foreign bank shall not conduct any business from that office with persons resident in Canada or with Her Majesty in right of Canada or a province except for the purpose of acquiring premises, supplies, services and staff for that office.
Marginal note:Exception
(2) If a foreign bank, immediately before the establishment of its head office in Canada under paragraph 522(b), held deposits of, or had loans outstanding to, persons resident in Canada or Her Majesty in right of Canada or a province, the foreign bank may repay those deposits and collect those loans through the head office in Canada.
Marginal note:Exception
(3) If a foreign bank controlled a bank or was a major shareholder of a bank immediately before the establishment of the foreign bank’s head office in Canada under paragraph 522(b), the foreign bank may continue to carry out from the head office in Canada any activities that were carried out from the head office of the foreign bank in relation to the bank before the establishment of the head office in Canada.
Division 3No Financial Establishment in Canada
Marginal note:Permitted investment — foreign bank
522.04 (1) A foreign bank that does not have a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity, so long as, by virtue of the acquisition, neither the foreign bank nor any entity associated with the foreign bank controls or becomes a major owner of
(a) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i); or
(b) a Canadian entity that is a financial services entity.
Marginal note:Permitted investment — associated entity
(2) An entity that is associated with a foreign bank and that does not have a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity, so long as, by virtue of the acquisition, neither the entity nor the foreign bank, nor any other entity associated with the foreign bank, controls or becomes a major owner of
(a) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i); or
(b) a Canadian entity that is a financial services entity.
Marginal note:Permitted Canadian commercial branch
522.05 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 does not have a financial establishment in Canada may maintain a branch in Canada or engage in or carry on business in Canada so long as less than
(a) the prescribed portion — or if no portion is prescribed, 10 per cent — of its business in Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of paragraphs (a) to (g) of the definition “financial services entity” in subsection 507(1); and
(b) the prescribed portion — or if no portion is prescribed, 10 per cent — of its business outside Canada, determined in the prescribed manner, consists of one or more activities referred to in any of
(i) paragraphs (a) to (g) of the definition “financial services entity” in subsection 507(1), and
(ii) paragraph (h) of that definition, except under prescribed circumstances.
Marginal note:Permitted branches re leasing
522.06 Despite section 522.05, 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 does not have a financial establishment in Canada and that outside Canada
(a) engages only in the activities referred to in the definition “leasing entity” in subsection 507(1), or
(b) engages only in activities other than those referred to in any of
(i) paragraphs (a) to (g) of the definition “financial services entity” in subsection 507(1), and
(ii) paragraph (h) of that definition, except under prescribed circumstances,
may in Canada engage in the activities of a leasing entity so long as it does not engage in any other activity in Canada.
Division 4Financial Establishment in Canada
Investments
Marginal note:Investment in a financial institution
522.07 Subject to the requirements relating to designation and 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).
Marginal note:Permitted investments
522.08 (1) Subject to subsection (2) and the requirements relating to designation and 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 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, including shares or ownership interests acquired or held in accordance with regulations made under paragraph 522.23(a) concerning specialized financing;
(c) engaging in the provision of any services exclusively to any or all of the following, so long as the Canadian entity is 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 “mutual fund entity”, “mutual fund distribution 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.
Marginal note:Additional restriction
(2) A foreign bank or an entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes any activity referred to in any of paragraphs (1)(a) to (e) if the activities of the Canadian entity include
(a) activities that a bank is not permitted to engage in under section 412, 417 or 418;
(b) dealing in securities, except as may be permitted under paragraph (1)(e) or as may be permitted to a bank under paragraph 409(2)(c);
(c) activities that a bank is not permitted to engage in under section 416, if the Canadian entity engages in the activities of a finance entity or of any other entity as may be prescribed;
(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, section 522.07, any of paragraphs 522.1(a) to (d) 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, paragraph 522.1(a), (c) or (d) or Division 8; or
(e) any prescribed activity.
Marginal note:Investment in a limited commercial entity
522.09 Subject to the requirements relating to approval and designation set out in Division 5, a foreign bank or an entity associated with a foreign bank that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity that is not
(a) an entity referred to in any of paragraphs 468(1)(a) to (i), or
(b) a Canadian entity that engages 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,
if the Canadian entity does not engage in any leasing activities and, in the opinion of the Minister, 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 the entity associated with a foreign bank.
Marginal note:Acquisition of other investments
522.1 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
(a) by way of an investment permitted by any of sections 522.11 to 522.13;
(b) by way of a temporary investment permitted by section 522.14;
(c) as a result of a default that has occurred under the terms of an agreement with respect to a loan or under any other documents governing the terms of a loan, as permitted by section 522.15; or
(d) through a realization of security, as permitted by section 522.15.
Marginal note:Indirect investments through federal institutions
522.11 (1) 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 by way of
(a) an acquisition or holding of the control of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f), or of a prescribed Canadian entity, that controls or has a substantial investment in the Canadian entity; or
(b) an acquisition or holding of shares or ownership interests in the Canadian entity by
(i) a Canadian entity referred to in any of paragraphs 468(1)(a) to (f), or a prescribed Canadian entity, that is controlled by the foreign bank or the entity associated with the foreign bank, or
(ii) a Canadian entity controlled by a Canadian entity referred to in subparagraph (i).
Marginal note: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 designation and approval set out in Division 5 apply in respect of that acquisition or holding.
Marginal note:Investments through provincial institutions
522.12 An entity that is associated with a foreign bank and that is
(a) an entity referred to in any of paragraphs 468(1)(g) to (i), or
(b) a Canadian entity controlled by an entity referred to in any of paragraphs 468(1)(g) to (i)
may acquire or hold control of, or a substantial investment in, a Canadian entity that is not a permitted Canadian entity or an entity referred to in paragraphs 468(1)(a) to (i), and if it does so, none of the requirements relating to approval set out in Division 5 apply in respect of that acquisition or holding.
Marginal note:Indirect investments through provincial institutions
522.13 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 a permitted Canadian entity or a Canadian entity referred to in any of paragraphs 468(1)(a) to (i), by way of
(a) an acquisition or holding of the control of a Canadian entity referred to in any of paragraphs 468(1)(g) to (i), or of a prescribed Canadian entity, that controls or has a substantial investment in the Canadian entity; or
(b) an acquisition or holding of shares or ownership interests in the Canadian entity by
(i) a Canadian entity referred to in any of paragraphs 468(1)(g) to (i), or a prescribed Canadian entity, that is controlled by the foreign bank or the entity associated with the foreign bank, or
(ii) a Canadian entity controlled by a Canadian entity referred to in subparagraph (i).
Marginal note:Temporary investments
522.14 (1) Subject to the requirements relating to designation set out in Division 5, 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.
Marginal note:Divestiture
(2) If subsection (1) applies in respect of a foreign bank or an entity associated with a foreign bank, the foreign bank or entity shall do all things necessary to ensure that, within two years after acquiring the control or the substantial investment or within any other period that may be specified or approved by the Minister, it no longer controls or has a substantial investment in the entity.
Marginal note:Extension
(3) On application by a foreign bank, or an entity associated with a foreign bank, the Minister may extend the period referred to in subsection (2) by any further period or periods.
Marginal note:Exception
(4) When 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 is required under this Part, the foreign bank or entity associated with the 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; 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.
Marginal note:Deemed temporary investment
(5) If a foreign bank or an entity associated with a foreign bank holds control of, or a substantial investment in, a Canadian entity as permitted by this Division and the foreign bank or the entity associated with the foreign bank becomes aware of a change in the business, affairs or activities of the Canadian entity that, if the change had taken place before the acquisition of control or the substantial investment, would have caused the entity not to be a limited commercial entity or a Canadian entity referred to in section 522.07 or 522.08 or would have been such that approval for the acquisition would have been required under any of paragraphs 522.22(1)(a) to (e) or (g), the foreign bank or the entity associated with the foreign bank is deemed to have acquired, on the day it becomes aware of the change, a temporary investment in respect of which subsections (1) to (4) apply.
Marginal note:Notification
(6) Within 90 days after acquiring control or a substantial investment under subsection (1) or (5), a foreign bank or an entity associated with a foreign bank shall notify the Minister in writing of the acquisition.
Marginal note:Acquisition by loan workout or realization of security
522.15 (1) 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
(a) as a result of a default that has occurred under the terms of an agreement with respect to a loan made between the foreign bank — or the entity associated with a foreign bank — and the Canadian entity, or under any other documents governing the terms of the loan, or
(b) through the realization of a security interest for any loan or advance made by the foreign bank or the entity associated with the foreign bank, or for any other debt or liability owing to it,
it may retain the control or the substantial investment for five years, but it shall do all things necessary to ensure that, within five years after the acquisition, it no longer controls the Canadian entity or holds a substantial investment in the Canadian entity.
Marginal note:Extension
(2) On application by a foreign bank or an entity associated with a foreign bank, the Minister may extend the period referred to in subsection (1) by any further period or periods.
Marginal note:Exception
(3) If, under subsection (1), a foreign bank or an entity associated with a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity for which the approval of the Minister is required under Division 5, the foreign bank or entity associated with the foreign bank may retain control of the Canadian entity, or continue to hold the substantial investment, for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (1) or of any extension granted under subsection (2).
Branches
Marginal note:Bank branches
522.16 A foreign bank may, under Part XII.1, maintain a branch in Canada to carry on business in Canada.
Marginal note:Insurance branches
522.17 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 may obtain an order under Part XIII of the Insurance Companies Act to insure, in Canada, risks.
Marginal note:Business of a cooperative credit society and dealing in securities
522.18 Subject to the requirements relating to designation and 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, so long as that business is engaged in or carried on in accordance with provincial laws relating to securities dealing.
Marginal note:Limited commercial branches
522.19 (1) Subject to the requirements relating to designation and approval 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
(a) less than the prescribed portion — or if no portion is prescribed, 10 per cent — of its business in Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of
(i) paragraphs 522.08(1)(a) to (f), and
(ii) paragraphs (a) to (g) of the definition “financial services entity” in subsection 507(1);
(b) less than the prescribed portion — or if no portion is prescribed, 10 per cent — of its business outside Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of
(i) paragraphs 522.08(1)(a) to (f),
(ii) paragraphs (a) to (g) of the definition “financial services entity” in subsection 507(1), and
(iii) paragraph (h) of that definition, except under prescribed circumstances; and
(c) in the opinion of the Minister, the business in Canada is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or the entity associated with a foreign bank.
Marginal note:Prohibition
(2) A foreign bank — or an entity associated with a foreign bank — that maintains a branch or engages in or carries on any business under subsection (1) may not in Canada engage in any leasing activities.
Division 5Designation and Approvals
Marginal note:Non-application
522.2 This Division does not apply in respect of investments acquired and held, branches maintained and businesses engaged in or carried on in accordance with Division 3.
Marginal note:Obligation to be designated
522.21 (1) A foreign bank that does not have a financial establishment in Canada must be a designated foreign bank or be associated with a designated foreign bank in order to
(a) acquire or hold control of, or be a major owner of,
(i) an entity referred to in any of paragraphs 468(1)(g) to (i),
(ii) a permitted Canadian entity that is a financial services entity, or
(iii) a Canadian entity that is a financial services entity, by way of a temporary investment permitted by section 522.14; or
(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18.
Marginal note:Entity associated with a designated foreign bank
(2) An entity that is associated with a foreign bank and that does not have a financial establishment in Canada must be associated with a designated foreign bank in order for the entity to
(a) acquire or hold control of, or be a major owner of,
(i) an entity referred to in any of paragraphs 468(1)(g) to (i),
(ii) a permitted Canadian entity that is a financial services entity, or
(iii) a Canadian entity that is a financial services entity, by way of a temporary investment permitted by section 522.14; or
(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18.
Marginal note:Designated foreign bank that has a financial establishment in Canada
(3) A foreign bank that has a financial establishment in Canada must be a designated foreign bank or be associated with a designated foreign bank in order to
(a) acquire or hold control of, or a substantial investment in,
(i) an entity referred to in any of paragraphs 468(1)(g) to (i),
(ii) a permitted Canadian entity,
(iii) a Canadian entity, by way of a temporary investment permitted by section 522.14, or
(iv) a limited commercial entity;
(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18; or
(c) maintain a branch or engage in or carry on a business permitted by section 522.19.
Marginal note:Entity associated with designated foreign bank that has a financial establishment in Canada
(4) An entity that is associated with a foreign bank and that has a financial establishment in Canada must be an entity associated with a foreign bank that is a designated foreign bank in order for the entity to
(a) acquire or hold control of, or a substantial investment in,
(i) an entity referred to in any of paragraphs 468(1)(g) to (i),
(ii) a permitted Canadian entity,
(iii) a Canadian entity, by way of a temporary investment permitted by section 522.14, or
(iv) a limited commercial entity;
(b) in Canada, engage in or carry on the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18; or
(c) maintain a branch or engage in or carry on a business permitted by section 522.19.
Marginal note: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, given by order,
(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 an activity described in paragraph 410(1)(c) or (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 the business of dealing in securities or the business of a cooperative credit society referred to in section 522.18;
(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).
Marginal note:Approval for indirect investments
(2) Subject to the regulations, if a foreign bank or an entity associated with a foreign bank
(a) obtains the approval of the Minister under any of paragraphs (1)(a) to (e) and (g) to acquire or hold control of, or a substantial investment in, a Canadian entity, and
(b) through that acquisition or holding, indirectly acquires control of, or a substantial investment in, another Canadian entity that would require the approval of the Minister under any of those paragraphs,
and that indirect acquisition is disclosed to the Minister in writing before the approval is obtained, the foreign bank or the entity associated with a foreign bank is deemed to have obtained the approval of the Minister for that indirect acquisition.
Marginal note:Ministerial approval of more than one entity
(3) If the Minister, under paragraph (1)(g), approves the acquisition or holding of control of, or a substantial investment in, a limited commercial entity by a foreign bank or by an entity associated with a foreign bank, the Minister may also authorize the foreign bank or entity associated with a foreign bank to, at any time, acquire and hold control of, or a substantial investment in, another limited commercial entity that engages in activities that are substantially the same as those engaged in by the Canadian entity in respect of which the approval was given.
Marginal note:Substantial investment by underwriter
(4) Nothing in this Part precludes a foreign bank or an entity associated with a foreign bank from acquiring a substantial investment in a Canadian entity if the substantial investment is acquired in the course of a distribution to the public of shares or ownership interests in the Canadian entity by a securities underwriter so long as the securities underwriter holds the substantial investment for no longer than six months.
Division 6Administration
Marginal note: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 for the purposes of paragraph 522.08(1)(b);
(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 paragraphs 508(1)(d) and (2)(b), including regulations respecting the classes of entities associated with the foreign bank, and the classes of foreign banks described in any of paragraphs 508(1)(a) to (c) that are associated with the foreign bank, that are to be taken into account in that calculation;
(f) defining any terms in paragraphs 508(1)(d) and (2)(b); and
(g) defining “factoring entity” for the purpose of paragraph 522.22(1)(b).
Marginal note:Application of regulations
522.24 Any regulations made for the purposes of sections 409 to 411 apply for the purposes of paragraph 522.08(1)(a) and subsection 522.22(1) unless otherwise provided in the regulations.
Marginal note:Divestiture
522.25 (1) If a foreign bank or an entity associated with a foreign bank contravenes any provision of Division 4 or fails to comply with any terms and conditions imposed by any order made for the purpose of any of those provisions, the Minister may, if the Minister considers it in the public interest to do so, by order, direct the foreign bank or the entity to divest itself of the control of, or a substantial investment in, a bank or bank holding company to which the offence relates.
Marginal note:Ceasing to engage in or carry on business
(2) If an authorized foreign bank or an entity associated with an authorized foreign bank contravenes any provision of Division 4 or fails to comply with any terms and conditions imposed by any order made for the purpose of any of those provisions, the Minister may, if the Minister considers it in the public interest to do so, revoke the order made under subsection 524(1).
Marginal note:Divestment order
(3) The Minister may, by order, direct a foreign bank or an entity associated with a foreign bank, within any period that the Minister considers reasonable, to dispose of assets used in a business or activity engaged in or carried on, or to dispose of the control of an entity or a substantial investment in an entity acquired or held, in contravention of this Part or in contravention of any terms and conditions imposed
(a) under subsection 522.26(2); or
(b) under subsection 518(4) or 521(1.02), as it read immediately before the coming into force of this section.
Marginal note:Definition
522.26 (1) In this section and section 522.27, “decision” means a decision, an order, an approval, an extension or a permission of or by the Minister under this Part.
Marginal note:Ministerial terms and condition
(2) A decision may include any terms and conditions that the Minister considers appropriate.
Marginal note:Minister may vary or revoke
(3) The Minister may vary or revoke a previous decision.
Marginal note:Effective date of decision
(4) A decision varying or revoking a previous decision takes effect three months after the day it is made, or at any other time that is agreed to by the Minister and the foreign bank, or the entity associated with a foreign bank, to which the decision relates.
Marginal note:Publication
(5) The Minister shall publish in the Canada Gazette a notice of the making or revocation of a designation order or an exemption order.
Marginal note:Statements and returns
522.27 Not later than six months after the end of its financial year or any other period that the Superintendent may specify, a foreign bank or an entity associated with a foreign bank in respect of which a decision has been made by the Minister shall, except to the extent that the Superintendent has exempted it in relation to any of the following, provide the Superintendent with
(a) a copy of its financial statements and those of each non-bank affiliate of the foreign bank for the financial year;
(b) a list, in a form satisfactory to the Superintendent, of businesses and activities engaged in or carried on by it under sections 514, 522.18 and 522.19;
(c) a list, in a form satisfactory to the Superintendent, of each non-bank affiliate of the foreign bank, with a description of the nature of the business engaged in or carried on by it; and
(d) any other information that may be prescribed for the purposes of this section.
Division 7Non-application of Investment Canada Act
Marginal note:Investment Canada Act
522.28 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, within the meaning of that Act, of 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 that is the subject of an exemption order or that is an entity associated with a foreign bank that is the subject of an exemption order;
(c) the acquisition of control, within the meaning of that Act, of a Canadian entity 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, that is authorized by Division 4 by a foreign bank, or by an entity associated with a foreign bank; and
(e) the acquisition of control, within the meaning of that Act, of a Canadian entity in accordance with Division 4 by a foreign bank, or by an entity associated with a foreign bank.
Division 8Transitional
Marginal note:Definitions
522.29 (1) The following definitions apply in this Division.
“affected entity”
« entité visée »
“affected entity” means
(a) an entity associated with a foreign bank that is an affected foreign bank and that has a financial establishment in Canada; or
(b) a prescribed entity associated with a foreign bank referred to in paragraph (c) of the definition “affected foreign bank”.
“affected foreign bank”
« banque étrangère visée »
“affected foreign bank” means a foreign bank that
(a) immediately before the day this Division comes into force, was the subject of an order made under subsection 524(1) or former subsection 521(1.06) and whose order has not been revoked;
(b) on or before June 13, 2000, controlled a foreign bank subsidiary as defined in former section 2; or
(c) for the purposes of subsections 522.32(6) and (7) is a prescribed foreign bank that meets any of the conditions for designation set out in any of paragraphs 508(1)(a) to (d).
Marginal note:Former provision
(2) Every reference in this Division to a former provision means a reference to that provision as it read immediately before the day this Division comes into force.
Marginal note:Former s. 507(4)
522.3 (1) Every order made under former subsection 507(4) exempting an entity from the status of being associated with a foreign bank or exempting a Canadian entity from being a “non-bank affiliate of a foreign bank” that is in force on the day this Division comes in force continues in force, subject to any further order that the Minister may make varying or revoking it.
Marginal note:Date order takes effect
(2) A revocation order or variation order takes effect three months after the date it is made unless the Minister and the entity to which it relates agree that the order is to take effect at another time.
Marginal note:Publication
(3) The Minister shall publish in the Canada Gazette a notice of every revocation order.
Marginal note:Former par. 518(3)(b) or s. 521(1)
522.31 Every order made under former paragraph 518(3)(b) or former subsection 521(1) that is in force on the day this Division comes into force continues in force, subject to any further order that the Minister may make varying or revoking it.
Marginal note:Former s. 521(1)
522.32 (1) An affected foreign bank or affected entity that had received consent under former subsection 521(1) to acquire or hold control of, or a substantial investment in, a Canadian entity that is a financial services entity but is not a permitted Canadian entity or an entity referred to in any of paragraphs 468(1)(a) to (i) may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force if the consent had not been revoked before that day.
Marginal note:Application
(2) Subsection (1) applies so long as
(a) the Canadian entity restricts its businesses in accordance with any terms and conditions in the consent under former subsection 521(1), or in an undertaking to the Minister or Superintendent, other than a term or condition that limits the size of the Canadian entity’s assets; and
(b) neither the affected foreign bank nor any affected entity in relation to the foreign bank
(i) is an authorized foreign bank, or
(ii) controls or is a major shareholder of a bank or a bank holding company.
Marginal note:Former par. 518(3)(b) and former s. 521(1)
(3) An affected foreign bank or an affected entity that, immediately before the day this Division comes into force, holds control of, or a substantial investment in, a Canadian entity that is a permitted Canadian entity or an entity referred to in any of paragraphs 468(1)(g) to (i) by virtue of former paragraph 518(3)(b) or a consent received under former subsection 521(1) may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force if the approval or consent had not been revoked before that day and, if it does so, it is deemed to have received any approval required under paragraphs 522.22(1)(a) to (e) in respect of the Canadian entity.
Marginal note:Former par. 518(3)(b)
(4) An affected foreign bank or affected entity that, immediately before the day this Division comes into force, holds, by virtue of former paragraph 518(3)(b), control of, or a substantial investment in, a Canadian entity that is not a permitted Canadian entity or a financial services entity may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force if any approval of the Minister under that former paragraph has not been revoked before that day, so long as the Canadian entity does not engage in leasing activities.
Marginal note:Application
(5) Subsections (3) and (4) apply so long as
(a) after the coming into force of this Division, the Canadian entity restricts its businesses in accordance with any terms and conditions in the Minister’s approval under former paragraph 518(3)(b), or in a consent received under former subsection 521(1), as the case may be, or in an undertaking to the Minister or Superintendent given before the day this Division comes into force, other than a term or condition that limits the size of the Canadian entity’s assets;
(b) within one year after the coming into force of this Division, the affected foreign bank or affected entity discloses to the Minister the nature of its businesses and activities on June 13, 2000; and
(c) after the coming into force of this Division, the Canadian entity does not change the nature of its businesses as of
(i) June 13, 2000, or
(ii) any other date after June 13, 2000 and before the coming into force of this Division on which the businesses of the Canadian entity were approved by the Minister.
Marginal note:Holding other than by virtue of former par. 518(3)(b) or s. 521(1)
(6) An affected foreign bank or an affected entity that, immediately before the day this Division comes into force, holds, otherwise than by virtue of former paragraph 518(3)(b) or a consent received under former subsection 521(1), control of, or a substantial investment in, a Canadian entity that is not a permitted Canadian entity or a financial services entity may continue to hold control of, or a substantial investment in, the Canadian entity on and after the day this Division comes into force.
Marginal note:Application
(7) Subsection (6) applies so long as
(a) within one year after the coming into force of this Division, the affected foreign bank or affected entity discloses to the Minister the nature of its businesses on June 13, 2000;
(b) after the coming into force of this Division, the Canadian entity does not change the nature of its businesses as of June 13, 2000 and its businesses remain in conformity with former paragraph 518(3)(a);
(c) the Canadian entity does not engage in leasing activities; and
(d) neither the affected foreign bank nor any affected entity
(i) is an authorized foreign bank, or
(ii) controls or is a major shareholder of a bank or a bank holding company.
Marginal note:Investments
522.33 (1) Despite section 517 and subject to subsection (2), paragraph 510(1)(d) does not apply in respect of the holding of control of, or a substantial investment in, a Canadian entity whose principal activity in Canada is an activity referred to in any of former subparagraphs 518(3)(a)(i) to (v) and that was acquired by a foreign bank or an entity associated with a foreign bank before August 1, 1997 and before
(a) the foreign bank became a foreign bank or the foreign bank with which the entity is associated became a foreign bank, as the case may be; or
(b) the Canadian entity’s principal activity in Canada became an activity described in those subparagraphs.
Marginal note:Restriction
(2) Subsection (1) applies only if the foreign bank or an entity associated with the foreign bank
(a) is not an authorized foreign bank; and
(b) does not control, and is not a major shareholder of, a bank or a bank holding company.
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