Financial System Review Act (S.C. 2012, c. 5)
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Assented to 2012-03-29
Financial System Review Act
S.C. 2012, c. 5
Assented to 2012-03-29
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 reinforcing stability and fine-tuning the consumer-protection framework; and
(b) 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 Canada Deposit Insurance Corporation Act, the Canadian Payments Act, the Winding-up and Restructuring Act, the Office of the Superintendent of Financial Institutions Act, the Payment Clearing and Settlement Act and the Financial Consumer Agency of Canada Act.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
Marginal note:Short title
1. This Act may be cited as the Financial System Review Act.
PART 11991, c. 46BANK ACT
Marginal note:2001, c. 9, s. 35(7)
2. (1) The definition “consumer provision” in section 2 of the Bank Act is replaced by the following:
“consumer provision”
« disposition visant les consommateurs »
“consumer provision” means a provision referred to in paragraph (a) or (a.1) of the definition “consumer provision” in section 2 of the Financial Consumer Agency of Canada Act;
Marginal note:2001, c. 9, s. 35(5)
(2) The portion of the definition banque étrangère in section 2 of the French version of the Act after paragraph (g) is replaced by the following:
Sont exclues de la présente définition les filiales des banques figurant à l’annexe I dans sa version antérieure à l’entrée en vigueur de l’article 184 de la Loi sur l’Agence de la consommation en matière financière du Canada, sauf si le ministre prend la décision d’exclure une ou plusieurs de ces banques de l’application du paragraphe 378(1).
Marginal note:2007, c. 6, s. 4
3. Section 21 of the Act is replaced by the following:
Marginal note:Sunset provision
21. (1) Subject to subsections (2) and (4), 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:Order not a regulation
(3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.
Marginal note:Exception
(4) If Parliament dissolves on the fifth anniversary of the day on which this section comes into force, on any day within the six-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, until the end of 180 days after the first day of the first session of the next Parliament.
4. Subsection 60(3) of the Act is repealed.
Marginal note:2001, c. 9, s. 63; 2007, c. 6, par. 132(a)
5. Subsection 138(1.1) of the Act is replaced by the following:
Marginal note:Number of eligible votes
(1.1) A bank with equity of twelve billion dollars or more shall 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 those 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:2001, c. 9, s. 67; 2007, c. 6, par. 132(b)
6. Subsection 156.09(2) of the Act is replaced by the following:
Marginal note:Restriction
(2) At a meeting of shareholders of a bank with equity of twelve billion dollars or more, no person and no entity controlled by any person may, in respect of any vote of shareholders or holders of any class or series of shares of the bank, cast votes in respect of any shares beneficially owned by the person or the entity that are, in aggregate, more than 20 per cent of the eligible votes that may be cast in respect of that vote.
Marginal note:2001, c. 9, s. 73; 2007, c. 6, par. 132(c)
7. Subsection 168(3.1) of the Act is replaced by the following:
Marginal note:Exception
(3.1) Subsection (2) does not apply to a widely held bank with equity of twelve billion dollars or more or to a bank in respect of which subsection 378(1) applies.
Marginal note:2001, c. 9, s. 84; 2007, c. 6, par. 132(d)
8. The portion of subsection 223(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Restriction
(3) Despite subsection (1), if the amalgamated bank would be a bank with equity of twelve billion dollars or more, the Minister shall not issue letters patent referred to in that subsection unless the amalgamated bank is
Marginal note:2005, c. 54, s. 57
9. (1) Subsection 273(1) of the Act is replaced by the following:
Marginal note:Distribution
273. (1) No person, including a bank, shall distribute securities of a bank that is not a federal credit union except in accordance with the regulations made under subsection (2).
Marginal note:2005, c. 54, s. 57
(2) The portion of subsection 273(2) of the Act before paragraph (b) is replaced by the following:
Marginal note:Regulations
(2) The Governor in Council may make regulations respecting the distribution of securities of a bank that is not a federal credit union, including
(a) respecting the information that is to be disclosed by such a bank before the distribution of any of its securities, including the information that is to be included in a prospectus;
10. The Act is amended by adding the following after section 273:
Marginal note:Distribution — federal credit union
273.1 (1) No person, including a bank, shall distribute securities of a federal credit union except in accordance with the regulations made under subsection (2).
Marginal note:Regulations
(2) The Governor in Council may make regulations respecting the distribution of securities of a federal credit union, including
(a) respecting the information that is to be disclosed by a federal credit union before the distribution of any of its securities, including the information that is to be included in a prospectus;
(b) respecting the manner of disclosure and the form of the information that is to be disclosed; and
(c) exempting any class of distribution of securities from the application of subsection (1).
Marginal note:2005, c. 54, s. 57
11. Subsection 274(1) of the Act is replaced by the following:
Marginal note:Order of exemption
274. (1) On application by a bank or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 273(2) or 273.1(2) if the Superintendent is satisfied that the bank or federal credit union, as the case may be, has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.
Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(e)
12. (1) Subsection 374(1) of the Act is replaced by the following:
Marginal note:Limitations on share holdings
374. (1) No person may be a major shareholder of a bank with equity of twelve billion dollars or more.
Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(e)
(2) Subsection 374(2) of the Act is replaced by the following:
Marginal note:Exception — widely held bank
(2) Subsection (1) does not apply to a widely held bank that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if it controlled, within the meaning of those paragraphs, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank since that day.
Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(e)
(3) The portion of subsection 374(3) of the Act before paragraph (b) is replaced by the following:
Marginal note:Exception — widely held bank holding company
(3) Subsection (1) does not apply to a widely held bank holding company that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if
(a) the bank holding company controlled, within the meaning of those paragraphs, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank since that day;
Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(e)
(4) The portion of subsection 374(4) of the Act before paragraph (a) is replaced by the following:
Marginal note:Exception — insurance holding companies and certain institutions
(4) Subsection (1) does not apply to any of the following that controls, within the meaning of paragraph 3(1)(d), the bank with equity of twelve billion dollars or more if it controlled, within the meaning of that paragraph, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of that paragraph, the bank since that day:
Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(e)
(5) Subsection 374(5) of the Act is replaced by the following:
Marginal note:Exception — other entities
(5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if the entity is controlled, within the meaning of those paragraphs, by a widely held bank to which subsection (2) applies, or a widely held bank holding company to which subsection (3) applies, that controls the bank.
Marginal note:2001, c. 9, s. 98; 2007, c. 6, par. 132(e)
(6) The portion of subsection 374(6) of the Act before paragraph (a) is replaced by the following:
Marginal note:Exception — other entities
(6) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the bank with equity of twelve billion dollars or more if the entity is controlled, within the meaning of that paragraph, by
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