Budget Implementation Act, 2023, No. 1 (S.C. 2023, c. 26)
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Assented to 2023-06-22
PART 4Various Measures (continued)
DIVISION 33Legislation Related to Financial Institutions (continued)
1991, c. 46Bank Act
539 The Bank Act is amended by adding the following after section 15:
Marginal note:Policies and procedures — integrity or security
15.1 A bank shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security, including foreign interference.
540 Paragraphs 160(e) and (f) of the Act are replaced by the following:
(e) a person who is prohibited by subsection 156.09(9) or section 392 or 401.3 from exercising voting rights attached to shares of the bank or whose voting rights attached to the shares are suspended under section 402.2 or subsection 973.03(4);
(f) a person who is an officer, director or full time employee of an entity that is prohibited by subsection 156.09(9) or section 392 or 401.3 from exercising voting rights attached to shares of the bank or whose voting rights attached to the shares are suspended under section 402.2 or subsection 973.03(4);
541 The Act is amended by adding the following after section 402.1:
Marginal note:Disposition — threat to integrity or security
402.2 (1) If the Minister is of the opinion that a person’s holding or beneficial ownership of shares or membership shares of a bank poses a threat to the integrity or security of the bank or the financial system in Canada or a threat to national security, the Minister may, by order, direct that person and any person controlled by that person to
(a) dispose of any number of shares of the bank held or beneficially owned by any of the persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by the person that is specified in the order; or
(b) dispose of any number of membership shares of the bank held or beneficially owned by any of the persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by the person that is specified in the order.
Marginal note:Suspension of rights
(2) A direction made under subsection (1) may also suspend any of the rights under Part VI attached to the shares referred to in paragraph (1)(a) or the membership shares referred to in paragraph (1)(b) until the shares or membership shares are disposed of in accordance with the direction.
Marginal note:Representations
(3) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the bank concerned with a reasonable opportunity to make representations.
Marginal note:Temporary direction
(4) If, in the Minister’s opinion, the length of time required for representations to be made under subsection (3) might be prejudicial to the public interest, the Minister may make a temporary direction to suspend any of the rights under Part VI attached to any of the shares referred to in paragraph (1)(a) or the membership shares referred to in paragraph (1)(b).
Marginal note:Cessation of effect
(5) A temporary direction ceases to have effect on the earlier of
(a) the expiry of 30 days after the day on which it takes effect or of a shorter period that is specified in the temporary direction, and
(b) if a direction is made under subsection (1) in respect of the shares or membership shares, the day on which that direction takes effect.
Marginal note:Appeal
(6) Any person with respect to whom a direction has been made under subsection (1) may, within 30 days after the day on which the direction was made, appeal the matter in accordance with section 977.
Marginal note:Notice — Committee and Review Agency
(7) If a direction has been made under subsection (1) or (4) for reasons related to national security, the Minister shall, within 30 days after the day on which the direction was made, notify
(a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act; and
(b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.
542 Subsection 403(1) of the Act is replaced by the following:
Marginal note:Application to court
403 (1) If a person fails to comply with a direction made under subsection 401.2(7), 402(1) or 402.2(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction.
543 The Act is amended by adding the following after section 524.2:
Marginal note:Policies and procedures — integrity or security
524.3 An authorized foreign bank shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada.
544 (1) Subsection 613(1) of the Act is replaced by the following:
Marginal note:Examination of authorized foreign banks
613 (1) The Superintendent, from time to time, but, in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), at least once in each calendar year, shall make or cause to be made any examination and inquiry into the business and affairs of each authorized foreign bank that the Superintendent considers to be necessary or expedient to determine whether the authorized foreign bank is complying with the provisions of this Act and whether the authorized foreign bank has adequate policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada. After the conclusion of each examination and inquiry, the Superintendent shall report on it to the Minister.
(2) Section 613 of the Act is amended by adding the following after subsection (1):
Marginal note:Integrity or security
(1.1) The Superintendent, from time to time, shall make or cause to be made any examination and inquiry into the business and affairs of any authorized foreign bank that the Superintendent considers to be necessary or expedient to determine whether the authorized foreign bank has adequate policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada. After the conclusion of each examination and inquiry, the Superintendent shall report on it to the Minister.
(3) Subsection 613(1.1) of the Act is repealed.
545 Section 614.1 of the Act is replaced by the following:
Marginal note:Prudential agreement
614.1 The Superintendent may enter into an agreement, called a “prudential agreement”, with an authorized foreign bank for the purposes of implementing any measure designed to protect the interests of its depositors and creditors or establishing adequate policies and procedures to protect it against threats to its integrity or security in relation to its business in Canada.
546 Subsections 615(2) and (3) of the Act are replaced by the following:
Marginal note:Directions — policies and procedures
(1.1) If, in the opinion of the Superintendent, an authorized foreign bank does not have adequate policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada, the Superintendent may direct the authorized foreign bank to take any measures that in the opinion of the Superintendent are necessary to remedy the situation.
Marginal note:Opportunity for representations
(2) Subject to subsection (3), no direction shall be issued under subsection (1) or (1.1) to an authorized foreign bank or person unless the authorized foreign bank or person is provided with a reasonable opportunity to make representations in respect of the matter.
Marginal note:Temporary direction
(3) If, in the opinion of the Superintendent, the length of time required for representations to be made might be prejudicial to the public interest, the Superintendent may make a temporary direction with respect to the matters referred to in paragraphs (1)(a) and (b) or subsection (1.1) having effect for a period of not more than 15 days.
547 Paragraph 616(1)(a) of the Act is replaced by the following:
(a) is contravening or has failed to comply with a prudential agreement entered into under section 614.1 or a direction of the Superintendent made under subsection 615(1), (1.1) or (3),
548 (1) Subsection 619(2) of the Act is amended by striking out “or” at the end of paragraph (f) and by adding the following after paragraph (g):
(h) in the opinion of the Superintendent, the continued operation of the authorized foreign bank in Canada would be materially prejudicial to its integrity or security in relation to its business in Canada; or
(i) in the opinion of the Superintendent, the continued operation of the authorized foreign bank in Canada would pose a risk to national security.
(2) Section 619 of the Act is amended by adding the following after subsection (2):
Marginal note:Minister’s powers
(2.1) Subject to this Act, the Minister may, for reasons related to national security, direct the Superintendent to
(a) take control, for a period not exceeding 16 days, of the assets of the authorized foreign bank;
(b) take control, for a period exceeding 16 days, of the assets of the authorized foreign bank; or
(c) if control of assets has been taken under paragraph (a), continue the control beyond the 16 days referred to in that paragraph.
(3) Subsection 619(4) of the Act is replaced by the following:
Marginal note:Notice — up to 16 days
(3.1) If the Superintendent takes control of the assets of an authorized foreign bank under paragraph (2.1)(a), the Superintendent shall notify the authorized foreign bank that control has been taken at the direction of the Minister.
Marginal note:Notice — more than 16 days
(3.2) If the Minister is considering whether to exercise the powers under paragraph (2.1)(b) or (c), the Superintendent shall notify the authorized foreign bank of the action that is being considered and of its right to make written representations to the Minister within the time specified in the notice, not exceeding 10 days after it receives the notice.
Marginal note:Notice — Committee and Review Agency
(3.3) Within 30 days after exercising any of the powers under subsection (2.1), the Minister shall notify
(a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act; and
(b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.
Marginal note:Objectives of Superintendent
(4) If the Superintendent has control under subsection (1) or (2.1) of the assets of an authorized foreign bank referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada.
(4) The portion of subsection 619(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:Powers of Superintendent
(5) If the Superintendent has control under subsection (1) or (2.1) of the assets of an authorized foreign bank referred to in that subsection,
(5) Subsection 619(6) of the Act is replaced by the following:
Marginal note:Persons to assist
(6) If the Superintendent takes control of the assets of an authorized foreign bank under subparagraph (1)(b)(i) or (ii) or paragraph (2.1)(b) or (c), the Superintendent may appoint one or more persons to assist in the control of the assets.
549 Section 620 of the Act is renumbered as subsection 620(1) and is amended by adding the following:
Marginal note:Expiration of control — Minister’s direction
(2) Control by the Superintendent under subsection 619(2.1) of the assets of an authorized foreign bank expires on the day on which a notice by the Superintendent is sent to the principal officer of the authorized foreign bank stating that the Minister is of the opinion, on the recommendation of the Superintendent, that corrective measures have been taken in response to the reasons related to national security and that the authorized foreign bank can resume control of its assets.
550 Section 621 of the Act is replaced by the following:
Marginal note:Superintendent may request winding-up
621 The Superintendent may, at any time before the receipt of a request under section 622 to relinquish control of the assets of an authorized foreign bank, request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the authorized foreign bank, if the assets of the authorized foreign bank are under the control of the Superintendent under subparagraph 619(1)(b)(i) or (ii) or paragraph 619(2.1)(b) or (c).
- Date modified: