Jobs and Economic Growth Act (S.C. 2010, c. 12)
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Assented to 2010-07-12
PART 17FEDERAL CREDIT UNIONS
1991, c. 46Bank Act
1925. (1) The portion of section 50 of the Act before paragraph (a) is replaced by the following:
Marginal note:No payments before order
50. Until an order approving the commencement and carrying on of business is made for a bank, the bank must not make any payment on account of incorporation or organization expenses out of moneys received from the issue of the shares or the membership shares of the bank and interest on those moneys, except reasonable sums
(2) Paragraph 50(b) of the Act is replaced by the following:
(b) for the payment of costs related to the issue of shares, or membership shares, of the bank; and
Marginal note:2001, c. 9, s. 56
1926. Paragraphs 52(1)(a) and (b) of the Act are replaced by the following:
(a) the meeting of shareholders of the bank referred to in subsection 46(1), or, in the case of a federal credit union, the meeting of members referred to in subsection 47.02(1), has been duly held;
(b) the bank has paid-in capital of at least five million dollars or any greater amount that is specified by the Minister under subsection 46(1) or 47.02(1);
1927. Section 53 of the Act is renumbered as subsection 53(1) and is amended by adding the following:
Marginal note:Deemed condition
(2) An order approving the commencement and carrying on of business by a federal credit union is deemed to contain a condition that the federal credit union must, on an ongoing basis, be organized and carry on business on a cooperative basis in accordance with section 12.1.
1928. Paragraph 54(1)(b) of the Act is replaced by the following:
(b) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject, other than the condition deemed to be in the order by subsection 53(2),
1929. Subsections 58(2) to (5) of the Act are replaced by the following:
Marginal note:Application to court to settle disbursements
(2) If the amount allowed by a special resolution for the payment of any incorporation and organization expenses referred to in subsection (1) is considered insufficient by the directors or if no special resolution for the payment of such expenses is passed, the directors may apply to any court having jurisdiction in the place where the head office of the bank is situated to settle and determine the amounts to be paid out of any moneys of the bank before distribution of the balance to
(a) if the bank is not a federal credit union, the shareholders or, if there are no shareholders, to the incorporators; or
(b) if the bank is a federal credit union, its members.
Marginal note:Notice of application to court
(3) The directors must, at least 21 days before the date fixed for the hearing of the application referred to in subsection (2), send to the shareholders, incorporators or members, as the case may be, a notice of the application, containing a statement of the amounts that are proposed to be settled and determined by the court.
Marginal note:Ratio payable
(4) In order that the amounts paid and payable under this section may be equitably borne by the shareholders, incorporators or members, as the case may be, the directors must, after the amounts of the payments have been approved by special resolution or settled and determined by a court, fix the proportionate part of the amounts chargeable to each shareholder, incorporator or member as the ratio of the amount paid in by that person to the aggregate of all the amounts paid in by the shareholders, incorporators or members.
Marginal note:Return of excess
(5) After the amounts referred to in this section have been paid, the directors shall pay, with any interest earned, to the shareholders, incorporators or members, the respective balances of the moneys paid in by them, less the amount chargeable to each under subsection (4).
1930. The portion of subsection 60(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Common shares
60. (1) A bank that is not a federal credit union must have one class of shares, to be designated as “common shares”, which are non-redeemable and in which the rights of the holders of those common shares are equal in all respects, and those rights include
1931. The Act is amended by adding the following after section 60:
Marginal note:Shares of federal credit union
60.1 (1) A federal credit union may issue shares only if its by-laws set out the following:
(a) whether the shares may be issued to persons who are not members;
(b) the maximum number, if any, of shares of any class that the federal credit union is authorized to issue;
(c) the number of classes of shares; and
(d) the rights, privileges, restrictions and conditions attaching to the shares of each class.
Marginal note:No automatic rights
(2) Subject to this Act, a federal credit union must not issue any share that confers on the holder of the share the right
(a) to vote at meetings of the federal credit union otherwise than in accordance with this Act; or
(b) to receive any of the remaining property of the federal credit union on dissolution.
Marginal note:Exception
(3) A federal credit union’s by-laws may provide that
(a) a share confers on its holder the right to vote at an election of directors by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled; or
(b) the shareholders, any class of shareholders or the holders of a series of shares, may elect a fixed number or a percentage of the directors.
Marginal note:Limit on shareholders’ directors
(4) Despite subsections (2) and (3), the shareholders do not have the right to elect more than 20 per cent of the directors.
Marginal note:One share, one vote
(5) If shareholders are entitled to vote in accordance with subsection (3) or otherwise in accordance with this Act, each share entitles the holder to one vote.
Marginal note:Designation of shares
60.2 A federal credit union must not designate a class of its shares as “membership shares” or any variation of those words.
1932. The portion of subsection 61(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Classes of shares
61. (1) The by-laws of a bank that is not a federal credit union may provide for more than one class of shares and, if they so provide, they must set out
1933. Section 62 of the Act is amended by adding the following after subsection (1):
Marginal note:Effective date
(1.1) In the case of a federal credit union, a by-law referred to in subsection (1) must be made by special resolution of the members. If the federal credit union has issued shares, the by-law is not effective until it is confirmed by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the by-law.
1934. (1) Subsection 66(2) of the Act is replaced by the following:
Marginal note:Stated capital account — membership shares
(1.1) A federal credit union must also maintain a stated capital account for the membership shares it issues.
Marginal note:Addition to stated capital account
(2) A bank must record in the appropriate stated capital account the full amount of any consideration it receives for any shares or membership shares it issues.
Marginal note:1997, c. 15, s. 7
(2) Subsection 66(4) of the Act is replaced by the following:
Marginal note:Exception
(3.1) Despite subsection (2), a federal credit union may, subject to subsection (4), record in the stated capital account maintained for its membership shares any part of the consideration it receives in an exchange if it issues membership shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act if the person, the federal credit union and all of the holders of the membership shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 224(1); or
(c) to shareholders of an amalgamating body corporate who receive the membership shares in addition to or instead of securities of the amalgamated bank.
Marginal note:Limit on addition to a stated capital account
(4) On the issuance of a share or membership share, a bank must not add to the appropriate stated capital account an amount greater than the amount of the consideration it receives for the share or membership share.
(3) Section 66 of the Act is amended by adding the following after subsection (5):
Marginal note:Constraint — federal credit union
(6) If the bank referred to in subsection (5) is a federal credit union, the addition must be approved by special resolution of the members and by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the special resolution, unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 77(4).
1935. (1) Subsection 67(1) of the Act is replaced by the following:
Marginal note:Stated capital of continued bank
67. (1) If a body corporate is continued as a bank under this Act, the bank must record in the stated capital account maintained for each class and series of shares, or for other ownership interests, however designated, then outstanding an amount that is equal to the aggregate of
(a) the aggregate amount paid up on the shares of each class and series of shares, or on the other ownership interests, immediately before the body corporate was so continued, and
(b) the amount of the contributed surplus of the bank that is attributable to those shares or other ownership interests.
(2) Subsection 67(3) of the Act is replaced by the following:
Marginal note:Shares issued before continuance
(3) Any amount unpaid in respect of a share or other ownership interest, however designated, in the body corporate, that was issued by a body corporate before it was continued as a bank under this Act and paid after it was so continued must be recorded in the stated capital account maintained by the bank for the shares of that class or series or for membership shares.
1936. Section 70 of the Act is amended by striking out “or” at the end of paragraph (c) and by adding the following after that paragraph:
(c.1) if the bank is a federal credit union, permit any of its subsidiaries to hold any membership shares of the federal credit union, other than the minimum number of membership shares required by the by-laws of the federal credit union to qualify for membership in it, if any; or
1937. Section 71 of the Act is replaced by the following:
Marginal note:Purchase and redemption of shares and membership shares
71. (1) Subject to subsection (2) and to its by-laws, a bank may, with the consent of the Superintendent, purchase, for the purpose of cancellation, any shares or membership shares issued by it, or redeem any redeemable shares or membership shares issued by it at prices not exceeding the redemption price for the shares or membership shares calculated according to a formula stated in its by-laws or the conditions attaching to the shares or membership shares.
Marginal note:Restrictions on purchase and redemption
(2) A bank must not make any payment to purchase or redeem any shares or membership shares issued by it if there are reasonable grounds for believing that the bank is, or the payment would cause the bank to be, in contravention of any regulation referred to in subsection 485(1) or (2) or any direction made under subsection 485(3).
Marginal note:Donated shares and membership shares
(3) A bank may accept from any shareholder or member a share or membership share, as the case may be, of the bank surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on any such share or membership share except in accordance with section 75.
Marginal note:2005, c. 54, s. 10(F)
1938. Subsection 72(1) of the Act is replaced by the following:
Marginal note:Holding as personal representative
72. (1) A bank may, and may permit its subsidiaries to, hold, in the capacity of a personal representative, shares of the bank — or, if the bank is a federal credit union, membership shares of the federal credit union — or of any body corporate that controls the bank or ownership interests in any unincorporated entity that controls the bank, but only if the bank or the subsidiary does not have a beneficial interest in the shares, membership shares or ownership interests.
1939. Subsection 73(1) of the Act is replaced by the following:
Marginal note:Cancellation of shares and membership shares
73. (1) Subject to subsection (2), if a bank purchases shares of the bank or fractions of shares, or membership shares of the bank, or redeems or otherwise acquires shares or membership shares of the bank, the bank must cancel those shares or membership shares.
1940. (1) Subsection 75(1) of the Act is replaced by the following:
Marginal note:Reduction of capital
75. (1) The stated capital of a bank that is not a federal credit union may be reduced by special resolution.
Marginal note:Reduction of capital — federal credit unions
(1.1) The stated capital of a federal credit union may be reduced by special resolution of its members and, if it has issued shares, by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the special resolution.
Marginal note:2007, c. 6, s. 10
(2) Paragraph 75(4.1)(b) of the Act is replaced by the following:
(b) there is to be no return of capital to shareholders or members, as the case may be, as a result of the reduction.
(2) Paragraphs 75(6)(a) and (b) of the Act are replaced by the following:
(a) the number of the bank’s shares or membership shares, as the case may be, issued and outstanding,
(b) the results of the voting,
1941. Subsections 76(1) and (2) of the Act are replaced by the following:
Marginal note:Recovery by action
76. (1) If any money or property was paid or distributed to a shareholder, member or other person as a consequence of a reduction of capital made contrary to section 75, a creditor of the bank may apply to a court for an order compelling the shareholder, member or other person to pay the money or deliver the property to the bank.
Marginal note:Shares and membership shares held by personal representative
(2) No person holding shares or membership shares in the capacity of a personal representative and registered on the records of the bank as a shareholder or member and described in those records as the personal representative of a named person is personally liable under subsection (1), but the named person is subject to all the liabilities imposed by that subsection.
1942. (1) Subsection 77(1) of the Act is replaced by the following:
Marginal note:Adjustment of stated capital account
77. (1) On a purchase, redemption or other acquisition by a bank of shares or fractions of shares, or of membership shares, issued by it, other than shares or membership shares acquired under section 72 or acquired through the realization of security and sold under subsection 73(2), the bank must deduct from the stated capital account maintained for the class or series of shares, or for the membership shares, as the case may be, so purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series, or in respect of the membership shares, as the case may be, by the number of shares of that class or series, or the number of membership shares, as the case may be, so purchased, redeemed or otherwise acquired and dividing by the number of shares of that class or series, or the number of membership shares, as the case may be, outstanding immediately before the purchase, redemption or other acquisition.
(2) Subsection 77(5) of the Act is replaced by the following:
Marginal note:Conversion or change of shares
(5) Shares issued by a bank and converted into shares of another class or series, or changed under subsection 192.03(1) or 217(1) into shares of another class or series, become issued shares of the class or series of shares into which the shares have been converted or changed.
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