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Jobs and Economic Growth Act (S.C. 2010, c. 12)

Full Document:  

Assented to 2010-07-12

PART 17FEDERAL CREDIT UNIONS

1991, c. 46Bank Act

2059. Section 377 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Exception — federal credit union

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

2060. Section 377.1 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Exception — federal credit union

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

2061. The Act is amended by adding the following after section 377.1:

Marginal note:Prohibition against control — federal credit union

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

  • Marginal note:Approval

    (2) The Minister may grant the approval only if

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

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

Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(l)

2062. Sections 379 to 381 of the Act are replaced by the following:

Marginal note:Constraint on registration

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

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

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

Marginal note:Exemption

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

  • Marginal note:Exception — federal credit union

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

Marginal note:Exemption — federal credit unions

380.1 On application by a federal credit union, the Superintendent may exempt any class of shares of the federal credit union the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares and membership shares of the federal credit union from the application of sections 373 and 379.

Marginal note:Exception for small holdings

381. Despite section 379, if, as a result of a transfer or issue of shares of a class of shares, or of membership shares, of a bank to a person, the total number of shares of that class registered in the securities register of the bank, or the total number of membership shares registered in the members register of the bank, as the case may be, in the name of that person would not exceed 5,000 and would not exceed 0.1 per cent of the outstanding shares of that class or of the outstanding membership shares, as the case may be, the bank is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares or in membership shares of the bank as a result of that issue or transfer of shares or membership shares.

2063. Section 382 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Exception — federal credit union

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

2064. The Act is amended by adding the following after section 382:

Marginal note:When approval not required — federal credit union

  • 382.1 (1) Despite sections 373 and 379, the approval of the Minister is not required in respect of a federal credit union if a person with a significant interest in a class of shares, or in membership shares, of the federal credit union, or an entity controlled by a person with a significant interest in a class of shares, or in membership shares, of the federal credit union, purchases or otherwise acquires shares of that class, or membership shares, or acquires control of any entity that holds any share of that class, or any membership share, and the number of shares of that class, or the number of membership shares, purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares or in the membership shares of the federal credit union to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

  • Marginal note:Percentage

    (2) Subject to subsection (3) and for the purpose of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares or in the membership shares of the federal credit union on the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares, or of membership shares, of the federal credit union, or of control of an entity that held shares of that class of shares, or membership shares, of the federal credit union, for which approval was given by the Minister.

  • Marginal note:Percentage

    (3) If a person has a significant interest in a class of shares or in membership shares of a federal credit union and the person’s percentage of that class of shares, or of membership shares, has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares, or of membership shares, of the federal credit union, or of control of an entity that held shares of that class of shares, or membership shares, as the case may be, of the federal credit union, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of

    • (a) 5 percentage points in excess of the significant interest of the person in that class of shares or in membership shares of the federal credit union on the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares, or of membership shares, of the federal credit union, or of control of an entity that held shares of that class of shares, or membership shares, of the federal credit union, for which approval was given by the Minister, and

    • (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares or in membership shares of the federal credit union at any time after the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares, or of membership shares, of the federal credit union, or of control of an entity that held shares of that class of shares, or membership shares, of the federal credit union, for which approval was given by the Minister.

  • Marginal note:Exception

    (4) Subsection (1) does not apply if the purchase or other acquisition of shares or membership shares or the acquisition of control referred to in that subsection would

    • (a) result in the acquisition of control of the federal credit union by the person referred to in that subsection;

    • (b) result in the acquisition of a significant interest in a class of shares, or in membership shares, of the federal credit union by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or

    • (c) result in an increase in a significant interest in a class of shares, or in membership shares, of the federal credit union by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies, and the increase is not exempted by the regulations.

  • Marginal note:Regulations

    (5) The Governor in Council may make regulations

    • (a) exempting from the application of paragraph (4)(b) the acquisition of a significant interest in a class of shares, or in membership shares, of the federal credit union by an entity controlled by the person; and

    • (b) exempting from the application of paragraph (4)(c) an increase in a significant interest in a class of shares, or in membership shares, of the federal credit union by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies.

Marginal note:2001, c. 9, s. 98

2065. Paragraph 383(1)(a) of the Act is replaced by the following:

  • (a) the Superintendent has, by order, directed the bank to increase its capital and shares or membership shares of the bank are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

Marginal note:2001, c. 9, s. 98

2066. Paragraphs 384(a) and (b) of the Act are replaced by the following:

  • (a) the purchase or other acquisition of any number or percentage of shares or membership shares of a bank that may be required in a particular transaction or series of transactions; or

  • (b) the purchase or other acquisition of up to a specified number or percentage of shares or membership shares of a bank within a specified period.

2067. Section 385 of the Act is amended by adding the following after subsection (1):

  • Marginal note:Exception — federal credit union

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

Marginal note:2001, c. 9, s. 98

  • 2068. (1) The portion of subsection 392(1) of the Act before paragraph (b) is replaced by the following:

    Marginal note:Restriction on voting rights

    • 392. (1) If, with respect to any bank, a particular person contravenes section 372, subsection 373(1), 374(1) or 375(1), section 376.1 or 376.2, subsection 377(1) or section 377.1 or 377.2 or fails to comply with an undertaking referred to in subsection 390(2) or with any term or condition imposed under section 397, no person, and no entity controlled by the particular person, shall, in person, by proxy or by delegate, exercise any voting rights

      • (a) that are attached to shares of the bank beneficially owned by the particular person or any entity controlled by the particular person;

      • (a.1) that may be exercised by a member of a federal credit union if the bank is a federal credit union; or

  • Marginal note:2001, c. 9, s. 98

    (2) Paragraph 392(2)(a) of the Act is replaced by the following:

    • (a) the shares or membership shares to which the contravention relates have been disposed of;

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