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
1943. Section 78 of the Act is replaced by the following:
Marginal note:Addition to stated capital account
78. On a conversion of any debt obligation of a bank into shares of a class or series of shares, or into membership shares, the bank must
(a) deduct from the liabilities of the bank the nominal value of the debt obligation being converted; and
(b) record the result obtained under paragraph (a) and any additional consideration received for the conversion in the stated capital account maintained or to be maintained for the class or series of shares, or for the membership shares, as the case may be, into which the debt obligation has been converted.
Marginal note:2007, c. 6, s. 11(1)
1944. (1) Subsection 79(1) of the Act is replaced by the following:
Marginal note:Declaration of dividend or patronage allocation
79. (1) The directors of a bank may declare and a bank may pay a dividend or patronage allocation by issuing fully paid shares or, subject to subsection 79.2(1), membership shares of the bank or options or rights to acquire fully paid shares or membership shares of the bank and, subject to subsection (4), the directors of a bank may declare and a bank may pay a dividend or patronage allocation in money or property, and if a dividend or patronage allocation is to be paid in money, the dividend may be paid in a currency other than the currency of Canada.
(2) Subsections 79(3) and (4) of the Act are replaced by the following:
Marginal note:Stated capital account
(3) If shares or membership shares of a bank are issued in payment of a dividend or patronage allocation, the bank must record in the stated capital account maintained or to be maintained for the shares of the class or series, or for the membership shares, issued in payment of the dividend or patronage allocation the declared amount of the dividend or patronage allocation stated as an amount of money.
Marginal note:When dividend or patronage allocation not to be declared
(4) The directors of a bank must not declare and a bank must not pay a dividend or patronage allocation 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).
1945. The Act is amended by adding the following after section 79:
Membership Capital
Marginal note:Membership shares
79.1 (1) A federal credit union may have only one class of membership shares in which the rights of their holders are equal in all respects, and those rights include the right to receive
(a) dividends declared on those membership shares; and
(b) the remaining property of the federal credit union on dissolution.
Marginal note:Consideration for membership share
(2) No membership share of a federal credit union is to be issued until it is fully paid for in money or, with the approval of the Superintendent, in property.
Marginal note:Other currencies
(3) When issuing membership shares, a federal credit union may provide that any aspect of the membership shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada.
Marginal note:Membership shares
79.2 (1) Membership shares may be held only by members.
Marginal note:No right to vote
(2) The right to vote attaches to membership and not to a membership share.
Marginal note:Preferences, rights, etc.
(3) A federal credit union’s letters patent or by-laws may not include any preference, right, condition, restriction, limitation or prohibition on membership shares, except as provided for by this Act.
Marginal note:Issue of certificates
79.3 (1) The by-laws of a federal credit union may provide that no membership share certificates need be issued and, if they so provide, the federal credit union must, on the request of a member, issue a statement of the number of membership shares held by the member.
Marginal note:Certificates
(2) The face of each certificate that the federal credit union issues in respect of membership shares must contain
(a) the name of the federal credit union;
(b) a statement that the federal credit union is subject to this Act;
(c) the name of the person to whom it is issued;
(d) a statement that the certificate represents membership shares in the federal credit union, and the number of the membership shares represented by the certificate;
(e) a statement that the certificate is transferable only in accordance with this Act; and
(f) a statement that there is a charge on the membership shares represented by the certificate in favour of the federal credit union for any indebtedness of the member to the federal credit union.
Marginal note:Authorized capital
79.4 The membership shares of a federal credit union must be issued with no par value, and its by-laws must specify any limit on the number of membership shares and set out the formula to be used to determine the value of the membership shares.
Marginal note:Membership shares non-assessable
79.5 Membership shares issued by a federal credit union are non-assessable, and their holders are not liable to the federal credit union or to its creditors in respect of those membership shares.
Marginal note:Continued body corporate
79.6 A body corporate that is continued as a federal credit union under this Act and that is not in compliance with section 79.1 on the date letters patent continuing it as a federal credit union are issued must, within 12 months after that date, redesignate a class of its shares to comply with that section.
1946. The portion of the definition “security” or “security certificate” in section 81 of the Act after paragraph (d) is replaced by the following:
but does not include an instrument evidencing a deposit or, in the case of a federal credit union, a membership share;
1947. The heading “Shareholders” before section 136 of the Act is replaced by the following:
Shareholders and Members
Marginal note:2005, c. 54, s. 16
1948. Subsections 136(1) and (2) of the Act are replaced by the following:
Marginal note:Place of meetings
136. (1) Meetings of shareholders or members of a bank are to be held at the place within Canada provided for in the by-laws of the bank or, in the absence of any such provision, at the place within Canada that the directors determine.
Marginal note:Participation by electronic means
(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders or members may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.
1949. (1) Subsection 137(1) of the English version of the Act is replaced by the following:
Marginal note:Calling meetings
137. (1) The directors of a bank
(a) must, after the meeting called under subsection 46(1) or section 47.02, call the first annual meeting of shareholders or members, as the case may be, of the bank, which meeting must be held not later than six months after the end of the first financial year of the bank, and subsequently call an annual meeting of shareholders or members, as the case may be, which meeting must be held not later than six months after the end of each financial year; and
(b) may at any time call a special meeting of shareholders or members.
Marginal note:2005, c. 54, s. 17
(2) Subsections 137(5) and (6) of the Act are replaced by the following:
Marginal note:Authority to fix record date
(5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders or members for any purpose, including for a determination of which shareholders or members are entitled to
(a) receive payment of a dividend or a patronage allocation;
(b) participate in a liquidation distribution;
(c) receive notice of a meeting of shareholders or members; or
(d) vote at a meeting of shareholders or members.
Marginal note:Determination of record date
(6) If no record date is fixed,
(a) the record date for the determination of shareholders or members who are entitled to receive notice of a meeting is
(i) at the close of business on the day immediately preceding the day on which the notice is given, or
(ii) if no notice is given, the day on which the meeting is held; and
(b) the record date for the determination of shareholders or members for any other purpose, other than to establish a right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.
Marginal note:2005, c. 54, s. 18
1950. (1) The portion of subsection 138(1) of the English version of the Act before paragraph (a) is replaced by the following:
Marginal note:Notice of meeting
138. (1) Notice of the time and place of a meeting of shareholders or members of a bank must be sent within the prescribed period to
Marginal note:2005, c. 54, s. 18
(2) Paragraph 138(1)(a) of the Act is replaced by the following:
(a) each shareholder or member entitled to vote at the meeting;
Marginal note:2001, c. 9, s. 63; 2005, c. 54, s. 18; 2007, c. 6, par. 132(a)
(3) Subsections 138(1.01) and (1.1) of the Act are replaced by the following:
Marginal note:Exception
(1.01) In the case of a bank that is not a federal credit union and that is not a distributing bank, notice may be sent within any shorter period specified in its by-laws.
Marginal note:Number of eligible votes
(1.1) A bank with equity of eight billion dollars or more that is not a federal credit union must set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining shareholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.
Marginal note:2005, c. 54, s. 19
1951. Section 139 of the Act is replaced by the following:
Marginal note:Notice not required
139. (1) A notice of a meeting is not required to be sent to shareholders or members who are not registered on the records of the bank or the bank’s transfer agent on the record date fixed under paragraph 137(5)(c) or determined under paragraph 137(6)(a).
Marginal note:Effect of default
(2) Failure to receive a notice of a meeting does not deprive a shareholder or member of the right to vote at the meeting.
Marginal note:1997, c. 15, s. 8
1952. Section 140 of the English version of the Act is replaced by the following:
Marginal note:Notice of adjourned meeting
140. (1) If a meeting is adjourned for less than 30 days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.
Marginal note:Notice if adjournment is longer
(2) If a meeting is adjourned by one or more adjournments for a total of 30 days or more, notice of the continuation of the meeting must be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than 90 days, subsection 156.04(1) does not apply.
1953. (1) Subsection 141(1) of the English version of the Act is replaced by the following:
Marginal note:Special business
141. (1) All matters dealt with at a special meeting of shareholders or members and all matters dealt with at an annual meeting, except consideration of the financial statements, report of the auditor or auditors, election of directors, remuneration of directors and reappointment of the incumbent auditor or auditors, are deemed to be special business.
(2) Subsection 141(2) of the Act is replaced by the following:
Marginal note:Notice of special business
(2) Notice of a meeting of shareholders or members at which special business is to be transacted must
(a) state the nature of the special business in sufficient detail to permit a shareholder or member to form a reasoned judgment in respect of that special business; and
(b) contain the text of any special resolution to be submitted to the meeting.
1954. The Act is amended by adding the following after section 141:
Marginal note:Nominations for directors
141.1 (1) If shareholders of a federal credit union are entitled to elect one or more directors,
(a) a nomination for the election of a director may be made only by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5 per cent of the shares of the federal credit union or 5 per cent of the shares of a class of its shares entitled to vote at the meeting at which the election is to take place; and
(b) a notice of a meeting of shareholders must include any nomination made in accordance with paragraph (a) for the election of a director.
Marginal note:Exception
(2) Paragraph (1)(b) does not apply if the nomination is submitted to the federal credit union at least the prescribed number of days before the anniversary date of the previous annual meeting.
1955. (1) Subsection 142(1) of the Act is replaced by the following:
Marginal note:Waiver of notice
142. (1) A shareholder, a member and any other person entitled to attend a meeting may in any manner waive notice of the meeting.
Marginal note:2001, c. 9, s. 64(F)
(2) Subsection 142(2) of the English version of the Act is replaced by the following:
Marginal note:Attendance is a waiver
(2) Attendance at a meeting of shareholders or members is a waiver of notice of the meeting, except when a person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.
Marginal note:2005, c. 54, s. 20(1)
1956. The portion of subsection 143(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Proposals
143. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares of a bank that is not a federal credit union that may be voted at an annual meeting of shareholders may
1957. The Act is amended by adding the following after section 144:
Marginal note:Proposals — members of federal credit union
144.1 (1) Subject to subsections (2) and (3), a member of a federal credit union may
(a) submit to the federal credit union notice of any matter that they propose to raise at an annual meeting (in this section referred to as a “proposal”); and
(b) discuss at an annual meeting any matter in respect of which they would have been entitled to submit a proposal.
Marginal note:Eligibility to submit proposal
(2) To be eligible to submit a proposal a member must have been a member of the federal credit union for at least the prescribed period before making the proposal.
Marginal note:Information to be provided
(3) A proposal is to be accompanied by a statement setting out the name and address of the member submitting the proposal and the period of time the member has been a member.
Marginal note:Information not part of proposal
(4) The information provided under subsection (3) does not form part of a proposal or of the supporting statement referred to in subsection (6) and is not included for the purposes of the prescribed maximum number of words referred to in subsection (6).
Marginal note:Proof may be required
(5) If the federal credit union requests within the prescribed period that a member provide proof that they are eligible to submit a proposal, the member must within the prescribed period provide proof that they meet the requirement of subsection (2).
Marginal note:Proposal and statement to accompany notice of meeting
(6) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the member making the proposal, a statement in support of the proposal and the name and address of the member making the proposal. The statement and the proposal must together not exceed the prescribed maximum number of words.
Marginal note:Nomination of directors
(7) A proposal may include nominations for the election of directors if it is signed by the lesser of 250 members and 1 per cent of the members who are entitled to vote at the meeting.
Marginal note:Exceptions
(8) A federal credit union need not comply with subsection (6) if
(a) the proposal is not submitted to the federal credit union at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to members in connection with the previous annual meeting;
(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the federal credit union or its directors, officers, members or security holders;
(c) the person submitting the proposal has failed, within the prescribed period before the federal credit union receives the person’s proposal, to present, at a meeting, a proposal that, at the person’s request, had been attached by the federal credit union to the notice of the meeting;
(d) substantially the same proposal was attached to a notice of meeting, and presented at a meeting, of the federal credit union held not more than the prescribed period before the receipt of the proposal and the proposal did not receive the prescribed minimum amount of support at the meeting; or
(e) the rights conferred by subsection (1) are being abused to secure publicity.
Marginal note:Federal credit union may refuse to include proposal
(9) If a member who submits a proposal withdraws from membership in accordance with section 47.05 before the meeting, the federal credit union is not required to attach any proposal submitted by that member to the notice of a meeting held within the prescribed period following the date of the meeting.
Marginal note:Immunity
(10) No federal credit union or person acting on behalf of a federal credit union incurs any liability by reason only of circulating a proposal.
Marginal note:Refusal to include proposal
144.2 (1) If a federal credit union refuses to include a proposal in a notice of a meeting referred to in section 138, it must, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of eligibility under subsection 144.1(5), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the notice and of the reasons for the refusal.
Marginal note:Restraining order by court
(2) On the application of a person submitting a proposal who claims to be aggrieved by a federal credit union’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.
Marginal note:Order to omit proposal from notice
(3) A federal credit union or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the federal credit union to omit the proposal from a notice of meeting, and the court, if it is satisfied that subsection 144.1(7) applies, may make any order that it thinks fit.
Marginal note:Notice to Superintendent
(4) An applicant under subsection (2) or (3) must give the Superintendent written notice of the application, and the Superintendent may appear and be heard at the hearing of the application in person or by counsel.
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