An Act to amend the law governing financial institutions and to provide for related and consequential matters (S.C. 2007, c. 6)
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Assented to 2007-03-29
An Act to amend the law governing financial institutions and to provide for related and consequential matters
S.C. 2007, c. 6
Assented to 2007-03-29
An Act to amend the law governing financial institutions and to provide for related and consequential matters
SUMMARY
This enactment amends a number of Acts governing financial institutions. It also amends legislation related to the regulation of financial institutions. Notable among the amendments are the following:
(a) amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, and the Trust and Loan Companies Act aimed at achieving three key objectives:
(i) enhancing the interests of consumers,
(ii) increasing legislative and regulatory efficiency, and
(iii) adapting those Acts to new developments;
(b) amendments to the Bills of Exchange Act to provide for the introduction of electronic cheque imaging; and
(c) technical amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Trust and Loan Companies Act, the Bank of Canada Act, the Bills of Exchange Act, the Canada Business Corporations Act, the Canada Deposit Insurance Corporation Act, the Canadian Payments Act, the Financial Consumer Agency of Canada Act, the Green Shield Canada Act, the Investment Canada Act, the National Housing Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
PART 11991, c. 46AMENDMENTS TO THE BANK ACT
Marginal note:1999, c. 28, s. 1(5)
1. The definitions “authorized foreign bank” and “Canadian entity” in section 2 of the Bank Act are replaced by the following:
“authorized foreign bank”
« banque étrangère autorisée »
“authorized foreign bank” means a foreign bank that is the subject of an order under subsection 524(1);
“Canadian entity”
« entité canadienne »
“Canadian entity” means an entity that is incorporated or formed by or under an Act of Parliament or of the legislature of a province, or otherwise formed in Canada, and that carries on business in Canada;
2. Section 9 of the Act is amended by adding the following after subsection (4):
Marginal note:Contravention
(5) A person contravenes a provision of Part VII or Division 7 of Part XV if the person agrees to act jointly or in concert with one or more other persons in such a manner that a deemed single person contravenes the provision.
3. Subsection 14(2) of the Act is amended by striking out the word “or” at the end of paragraph (f), by adding the word “or” at the end of paragraph (g) and by adding the following after paragraph (g):
(h) a bank is continued, or amalgamated and continued, as a body corporate to which another Act of Parliament applies,
Marginal note:2001, c. 9, s. 44; 2006, c. 4, s. 199
4. Section 21 of the Act is replaced by the following:
Marginal note:Sunset provision
21. (1) Subject to subsections (2) and (3), banks shall not carry on business, and authorized foreign banks shall not carry on business in Canada, after the day that is the fifth anniversary of the day on which this section comes into force.
Marginal note:Extension
(2) The Governor in Council may, by order, extend by up to six months the time during which banks may continue to carry on business and authorized foreign banks may continue to carry on business in Canada. No more than one order may be made under this subsection.
Marginal note:Exception
(3) If Parliament dissolves on the fifth anniversary of the day on which this section comes into force, on any day within the three-month period before that anniversary or on any day within an extension under subsection (2), banks may continue to carry on business, and authorized foreign banks may continue to carry on business in Canada, for 180 days after the first day of the first session of the next Parliament.
5. Paragraph 39(1)(f) of the Act is replaced by the following:
(f) maintain outside Canada any records or registers required by this Act to be maintained in Canada.
Marginal note:2001, c. 9, s. 50
6. Sections 39.1 and 39.2 of the Act are replaced by the following:
Marginal note:Transferring to other federal Acts
39.1 (1) A bank may
(a) apply, with the approval in writing of the Minister, under the Canada Business Corporations Act for a certificate of continuance as a corporation under that Act;
(b) apply, with the approval in writing of the Minister, under the Canada Cooperatives Act for a certificate of continuance, or a certificate of continuance and a certificate of amalgamation, as a cooperative under that Act;
(c) apply, under the Cooperative Credit Associations Act, for letters patent continuing the bank as an association under that Act, or amalgamating and continuing the bank as an association under that Act;
(d) apply, under the Insurance Companies Act, for letters patent continuing the bank as a company (other than a mutual company) or an insurance holding company under that Act, or amalgamating and continuing the bank as a company (other than a mutual company) or an insurance holding company under that Act; or
(e) apply, under the Trust and Loan Companies Act, for letters patent continuing the bank as a company under that Act, or amalgamating and continuing the bank as a company under that Act.
Marginal note:Conditions for approval
(2) The approval referred to in paragraph (1)(a) or (b) may be given only if the Minister is satisfied that
(a) the bank has published, once a week for four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the bank is situated, a notice of its intention to apply for the approval;
(b) the application has been authorized by a special resolution; and
(c) the bank does not hold deposits, other than deposits that are made by a person who controls the bank or by a person who has a significant interest in a class of shares of the bank and that are not insured by the Canada Deposit Insurance Corporation.
Marginal note:Withdrawing application
(3) If a special resolution authorizing the application for the certificate or letters patent so states, the directors of the bank may, without further approval of the shareholders, withdraw the application before it is acted on.
Marginal note:Restriction on other transfers
(4) A bank may not apply to be continued, or to be amalgamated and continued, as the case may be, as a body corporate other than one referred to in subsection (1).
Marginal note:Act ceases to apply
39.2 If a bank applies for a certificate or letters patent referred to in section 39.1 in accordance with that section and the certificate is given or the letters patent are issued, this Act ceases to apply to the bank as of the day the certificate or the letters patent take effect.
Marginal note:2001, c. 9, s. 52
7. Section 41 of the Act is replaced by the following:
Marginal note:Affiliated bank
41. Despite section 40, a bank that is affiliated with another entity may, with the consent of that entity, be incorporated with, or change its name to, substantially the same name as that of the affiliated entity.
Marginal note:2005, c. 54, s. 8(2)
8. Subsection 62(5) of the English version of the Act is replaced by the following:
Marginal note:Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.
9. The Act is amended by adding the following after section 72:
Marginal note:Exception — conditions before acquisition
72.1 (1) A bank may permit any of its subsidiaries to acquire shares of the bank through the issuance of those shares by the bank to the subsidiary if the conditions prescribed for the purposes of this subsection are met before the subsidiary acquires the shares.
Marginal note:Conditions after acquisition
(2) After a subsidiary has acquired shares under the purported authority of subsection (1), the conditions prescribed for the purposes of this subsection must be met.
Marginal note:Non-compliance with conditions
(3) If a bank permits any of its subsidiaries to acquire shares of the bank under the purported authority of subsection (1) and one or more of the conditions prescribed for the purposes of subsections (1) and (2) were not met, are not met or cease to be met, as the case may be, then, despite section 16 and subsection 66(2), the bank must comply with the prescribed requirements.
10. Section 75 of the Act is amended by adding the following after subsection (4):
Marginal note:Exception
(4.1) Subsection (4) does not apply if
(a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 308(4); and
(b) there is to be no return of capital to shareholders as a result of the reduction.
Marginal note:2001, c. 9, s. 61(1)
11. (1) Subsections 79(1) and (2) of the Act are replaced by the following:
Marginal note:Declaration of dividend
79. (1) The directors of a bank may declare and a bank may pay a dividend by issuing fully paid shares of the bank or options or rights to acquire fully paid shares of the bank and, subject to subsection (4), the directors of a bank may declare and a bank may pay a dividend in money or property, and if a dividend is to be paid in money, the dividend may be paid in a currency other than the currency of Canada.
Marginal note:Notice to Superintendent
(2) The directors of a bank shall notify the Superintendent of the declaration of a dividend at least 15 days before the day fixed for its payment.
Marginal note:2001, c. 9, s. 61(2)
(2) Subsection 79(5) of the Act is repealed.
Marginal note:2001, c. 9, s. 69
12. Subsection 159(2) of the Act is replaced by the following:
Marginal note:Residency requirement
(2) At least one half of the directors of a bank that is a subsidiary of a foreign bank and a majority of the directors of any other bank must be, at the time of each director’s election or appointment, resident Canadians.
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