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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2020-06-17 and last amended on 2020-05-09. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 6Corporate Governance (continued)

Directors and Officers (continued)

Marginal note:Defence — due diligence

  •  (1) A director, officer or employee of a bank holding company is not liable under section 794 or 797 and has fulfilled their duty under subsection 748(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

    • (a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or

    • (b) a report of a person whose profession lends credibility to a statement made by them.

  • Marginal note:Defence — good faith

    (2) A director or officer of a bank holding company has fulfilled their duty under subsection 748(1) if they relied in good faith on

    • (a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or

    • (b) a report of a person whose profession lends credibility to a statement made by them.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 115

Marginal note:Indemnification

  •  (1) A bank holding company may indemnify a director or officer of the bank holding company, a former director or officer of the bank holding company or another person who acts or acted, at the bank holding company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank holding company or other entity.

  • Marginal note:Advances

    (2) A bank holding company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

  • Marginal note:No indemnification

    (3) A bank holding company may not indemnify a person under subsection (1) unless

    • (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank holding company or the other entity for which they acted at the bank holding company’s request as a director or officer or in a similar capacity; and

    • (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

  • Marginal note:Indemnification — derivative actions

    (4) A bank holding company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank holding company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank holding company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

  • Marginal note:Right to indemnity

    (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank holding company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank holding company or other entity described in that subsection if the person

    • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

    • (b) fulfils the conditions set out in subsection (3).

  • Marginal note:Heirs and personal representatives

    (6) A bank holding company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank holding company may indemnify under those subsections.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 115

Marginal note:Directors’ and officers’ insurance

 A bank holding company may purchase and maintain insurance for the benefit of any person referred to in section 799 against any liability incurred by the person

  • (a) in the capacity of a director or an officer of the bank holding company, except where the liability relates to a failure to act honestly and in good faith with a view to the best interests of the bank holding company; or

  • (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank holding company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 116

Marginal note:Application to court for indemnification

  •  (1) A bank holding company or a person referred to in section 799 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit.

  • Marginal note:Notice to Superintendent

    (2) An applicant under subsection (1) shall give the Superintendent written notice of the application and the Superintendent is entitled to appear and to be heard at the hearing of the application in person or by counsel.

  • Marginal note:Other notice

    (3) On an application under subsection (1), the court may order notice to be given to any interested person and that person is entitled to appear and to be heard in person or by counsel at the hearing of the application.

  • 2001, c. 9, s. 183

Fundamental Changes

Amendments

Marginal note:Sections 215 to 222 apply

 Sections 215 to 222 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 Act” in those sections are to be read as references to “this Part”;

  • (c) the reference to “subsection 159(1) and section 168” in paragraph 217(1)(i) is to be read as a reference to “subsection 749(1) and section 756”; and

  • (d) the reference to “sections 143 and 144” in subsection 221(1) is to be read as a reference to “sections 732 and 733”.

  • 2001, c. 9, s. 183
Amalgamation

Marginal note:Application to amalgamate

  •  (1) On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including banks and bank holding companies but not including federal credit unions, the Minister may issue letters patent amalgamating and continuing the applicants as one bank holding company.

  • Marginal note:Restriction

    (2) Despite subsection (1), if one of the applicants is a bank holding company that controls a bank named in Schedule I as that Schedule read immediately before the day section 184 of the Financial Consumer Agency of Canada Act comes into force, other than a bank in respect of which the Minister has specified that subsection 378(1) no longer applies, the Minister shall not issue letters patent referred to in subsection (1) unless

    • (a) the amalgamated bank holding company would be a widely held bank holding company; or

    • (b) the amalgamated bank holding company would be controlled by a widely held bank holding company that, at the time the application was made, controlled

      • (i) the applicant, or

      • (ii) any other applicant that is a bank holding company that controls a bank named in Schedule I as that Schedule read immediately before the day section 184 of the Financial Consumer Agency of Canada Act comes into force, other than a bank in respect of which the Minister has specified that subsection 378(1) no longer applies.

  • Marginal note:Restriction

    (3) Despite subsection (1), if the amalgamated bank holding company would be a bank holding company with equity of twelve billion dollars or more, the Minister shall not issue letters patent referred to in that subsection unless the amalgamated bank holding company is

    • (a) widely held;

    • (b) controlled, within the meaning of paragraphs 3(1)(a) and (d), by a widely held bank, or by a widely held bank holding company, that controlled one of the applicants at the time the application was made; or

    • (c) controlled, within the meaning of paragraph 3(1)(d), by a widely held insurance holding company, or by an eligible Canadian financial institution, within the meaning of subsection 370(1), other than a bank, or by an eligible foreign institution, within the meaning of subsection 370(1), that controlled one of the applicants at the time the application was made.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2010, c. 12, s. 2084
  • 2012, c. 5, s. 80
 
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