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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2019-09-10 and last amended on 2019-06-21. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 6Corporate Governance (continued)

Shareholders (continued)

Marginal note:Court may order meeting to be called

  •  (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if

    • (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;

    • (b) it is impracticable to conduct the meeting in the manner required by this Part or the by-laws; or

    • (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.

  • Marginal note:Varying quorum

    (2) Without restricting the generality of subsection (1), a court may order that the quorum required by the by-laws or this Part be varied or dispensed with at a meeting called, held and conducted pursuant to this section.

  • Marginal note:Valid meeting

    (3) A meeting called, held and conducted pursuant to this section is for all purposes a meeting of shareholders of the bank holding company duly called, held and conducted.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 101

Marginal note:Court review of election

  •  (1) A bank holding company or a shareholder or director of a bank holding company may apply to a court to resolve any dispute in respect of the election or appointment of a director or an auditor of the bank holding company.

  • Marginal note:Powers of court

    (2) On an application under subsection (1), a court may make any order it thinks fit including, without limiting the generality of the foregoing,

    • (a) an order restraining a director or auditor whose election or appointment is challenged from acting pending determination of the dispute;

    • (b) an order declaring the result of the disputed election or appointment;

    • (c) an order requiring a new election or appointment, and including in the order directions for the management of the business and affairs of the bank holding company until a new election is held or the new appointment is made; and

    • (d) an order determining the voting rights of shareholders and of persons claiming to own shares.

  • 2001, c. 9, s. 183

Marginal note:Notice to Superintendent

  •  (1) A person who makes an application under subsection 743(1) or 744(1) shall give notice of the application to the Superintendent before the hearing and shall deliver a copy of the order of the court, if any, to the Superintendent.

  • Marginal note:Superintendent representation

    (2) The Superintendent may appear and be heard in person or by counsel at the hearing of an application referred to in subsection (1).

  • 2001, c. 9, s. 183

Proxies and Voting Restrictions

Marginal note:Sections 156.01 to 156.09 apply

 Sections 156.01 to 156.09 apply in respect of bank holding companies, subject to the following:

  • (a) references to “bank” in those sections are to be read as references to “bank holding company”;

  • (b) references to “this Part” in those sections are to be read as references to “this Division”;

  • (c) the English version of subsection 156.05(1) is to be read without reference to “or auditors”;

  • (d) the reference to “section 375” in subsection 156.09(4) is to be read as a reference to “section 878”; and

  • (e) the reference to “subsection 138(1.1)” in subsection 156.09(11) is to be read as a reference to “subsection 727(2)”.

  • 2001, c. 9, s. 183

Directors and Officers

Duties

Marginal note:Duty to manage

  •  (1) Subject to this Act, the directors of a bank holding company shall manage or supervise the management of the business and affairs of the bank holding company.

  • Marginal note:Specific duties

    (2) Without limiting the generality of subsection (1), the directors of a bank holding company shall

    • (a) establish an audit committee to perform the duties referred to in subsections 782(3) and (4);

    • (b) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information;

    • (c) designate a committee of the board of directors to monitor the procedures referred to in paragraph (b); and

    • (d) establish investment and lending policies, standards and procedures in accordance with section 927.

  • Marginal note:Exception

    (3) Paragraph (2)(a) does not apply to the directors of a bank holding company if

    • (a) all the voting shares of the bank holding company are beneficially owned by a Canadian financial institution described in any of paragraphs (a) to (d) of the definition financial institution in section 2; and

    • (b) the audit committee of the financial institution performs for and on behalf of the bank holding company all the functions that would otherwise be required to be performed by the audit committee of the bank holding company under this Part.

  • 2001, c. 9, s. 183

Marginal note:Duty of care

  •  (1) Every director and officer of a bank holding company in exercising any of the powers of a director or an officer and discharging any of the duties of a director or an officer shall

    • (a) act honestly and in good faith with a view to the best interests of the bank holding company; and

    • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

  • Marginal note:Duty to comply

    (2) Every director, officer and employee of a bank holding company shall comply with this Act, the regulations, the bank holding company’s incorporating instrument and the by-laws of the bank holding company.

  • Marginal note:No exculpation

    (3) No provision in any contract, in any resolution or in the by-laws of a bank holding company relieves any director, officer or employee of the bank holding company from the duty to act in accordance with this Act and the regulations or relieves a director, officer or employee from liability for a breach thereof.

  • 2001, c. 9, s. 183
Qualification and Number — Directors

Marginal note:Minimum number of directors

  •  (1) A bank holding company shall have at least seven directors.

  • Marginal note:Residency requirement

    (2) At least one half of the directors of a bank holding company that is a subsidiary of a foreign bank and a majority of the directors of any other bank holding company must be, at the time of each director’s election or appointment, resident Canadians.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 114

Marginal note:Disqualified persons

 The following persons are disqualified from being directors of a bank holding company:

  • (a) a person who is less than eighteen years of age;

  • (b) a person who is of unsound mind and has been so found by a court in Canada or elsewhere;

  • (c) a person who has the status of a bankrupt;

  • (d) a person who is not a natural person;

  • (e) a person who is prohibited by subsection 156.09(9) or section 901 or 914 from exercising voting rights attached to shares of the bank holding company;

  • (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 901 or 914 from exercising voting rights attached to shares of the bank holding company;

  • (f.1) a person who is an officer, director, employee or agent of — or any other person acting on behalf of — an eligible agent within the meaning of subsection 370(1);

  • (g) [Repealed, 2013, c. 40, s. 163]

  • (h) a minister of Her Majesty in right of Canada or in right of a province; and

  • (i) a person who is an agent or employee of the government of a foreign country or any political subdivision thereof.

  • 2001, c. 9, s. 183
  • 2012, c. 19, s. 335, c. 31, s. 119
  • 2013, c. 40, s. 163
 
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