Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2019-08-15 and last amended on 2019-06-21. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 7Ownership (continued)

Constraints on Ownership (continued)

Marginal note:Loss of control — other entities

  •  (1) Despite sections 876 and 882, an eligible foreign institution, an eligible Canadian financial institution, other than a bank, or a widely held insurance holding company may be a major shareholder of a bank holding company with equity of twelve billion dollars or more and cease to control, within the meaning of paragraph 3(1)(d), the bank holding company if it has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the bank holding company on the expiration of the day specified in the agreement.

  • Marginal note:Extension

    (2) If general market conditions so warrant and the Minister is satisfied that the institution or insurance holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 96

Marginal note:Change in status

  •  (1) If a body corporate that is an eligible financial institution other than a bank controls, within the meaning of paragraph 3(1)(d), a bank holding company with equity of twelve billion dollars or more and the body corporate subsequently ceases to be an eligible financial institution, the body corporate must do all things necessary to ensure that, on the day that is one year after the day it ceased to be an eligible financial institution,

    • (a) it does not control, within the meaning of paragraph 3(1)(d), the bank holding company; and

    • (b) it is not a major shareholder of the bank holding company.

  • Marginal note:Extension

    (2) If general market conditions so warrant and the Minister is satisfied that the body corporate has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 97

Approval Process

Marginal note:Application for approval

  •  (1) An application for an approval of the Minister required under this Division must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require.

  • Marginal note:Applicant

    (2) If, with respect to any particular transaction, this Division applies to more than one person, any one of those persons may make the application to the Minister for approval on behalf of all of those persons.

  • 2001, c. 9, s. 183

Marginal note:Matters for consideration

  •  (1) Subject to subsection (2), if an application for an approval under section 875 is made, the Minister, in determining whether or not to approve the transaction, shall take into account all matters that the Minister considers relevant to the application, including

    • (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support of any bank that is a subsidiary of the bank holding company;

    • (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of any bank that is a subsidiary of the bank holding company;

    • (c) the business record and experience of the applicant or applicants;

    • (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity;

    • (e) whether the bank holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

    • (f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the bank holding company and its affiliates on the conduct of those businesses and operations; and

    • (g) the best interests of the financial system in Canada.

  • Marginal note:Exception

    (2) Except for an application by an eligible agent for an approval under section 875, and subject to subsection 882(1), the Minister shall take into account only paragraph (1)(d) if the application is in respect of a transaction that would result in the applicant or applicants holding

    • (a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of a widely held bank holding company with equity of twelve billion dollars or more; or

    • (b) more than 10 per cent but no more than 30 per cent of any class of the outstanding non-voting shares of such a bank holding company.

  • Marginal note:Favourable treatment

    (3) The Minister shall not approve a transaction that would cause a bank holding company to become a subsidiary of a foreign bank within the meaning of any of paragraphs (a) to (f) of the definition foreign bank in section 2 that is a non-WTO Member foreign bank, unless the Minister is satisfied that treatment as favourable for bank holding companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign bank principally carries on business, either directly or through a subsidiary.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 98, c. 31, s. 123

Marginal note:Terms and conditions

 The Minister may impose any terms and conditions in respect of an approval given under this Division that the Minister considers necessary to ensure compliance with any provision of this Act.

  • 2001, c. 9, s. 183

Marginal note:Certifying receipt of application

  •  (1) If, in the opinion of the Superintendent, an application filed under this Division contains all the required information, the Superintendent shall without delay refer the application to the Minister and send a receipt to the applicant certifying the date on which the completed application was received by the Superintendent.

  • Marginal note:Incomplete application

    (2) If, in the opinion of the Superintendent, an application filed under this Division is incomplete, the Superintendent shall send a notice to the applicant specifying the information required by the Superintendent to complete the application.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 120(F)

Marginal note:Notice of decision

  •  (1) Subject to subsections (2) and (3) and 910(1), the Minister shall, within a period of thirty days after the certified date referred to in subsection 908(1), send to the applicant

    • (a) a notice approving the transaction to which the application relates; or

    • (b) if the Minister is not satisfied that the transaction to which the application relates should be approved, a notice to that effect, advising the applicant of the right to make representations to the Minister in respect of the matter.

  • Marginal note:Notice of decision

    (2) Subject to subsections (4) and 910(2), the notice referred to in paragraph (1)(a) or (b) shall be sent by the Minister within a period of 45 days after the certified date referred to in subsection 908(1) in the following cases:

    • (a) the application involves the acquisition of control of a bank holding company;

    • (b) the application is made by an eligible agent or an entity controlled by an eligible agent; or

    • (c) an application is made for the approval referred to in subsection 913(3).

  • Marginal note:Extension of period for notice

    (3) If the Minister is unable to complete the consideration of an application within the period referred to in subsection (1), the Minister shall,

    • (a) within that period, send a notice to that effect to the applicant; and

    • (b) within a further period of thirty days after the date of the sending of the notice referred to in paragraph (a) or within any other further period that may be agreed on by the applicant and the Minister, send a notice referred to in paragraph (1)(a) or (b) to the applicant.

  • Marginal note:Further extensions

    (4) If the Minister considers it appropriate to do so, the Minister may extend the period referred to in subsection (2) for one or more periods of forty-five days.

  • 2001, c. 9, s. 183
  • 2012, c. 31, s. 124

Marginal note:Reasonable opportunity to make representations

  •  (1) If, after receipt of the notice referred to in paragraph 909(1)(b), the applicant advises the Minister that the applicant wishes to make representations, the Minister must provide the applicant with a reasonable opportunity within a period of thirty days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter.

  • Marginal note:Reasonable opportunity to make representations

    (2) If, after receipt of the notice sent in accordance with subsection 909(2) that the Minister is not satisfied that the transaction to which the application relates should be approved, the applicant advises the Minister that the applicant wishes to make representations, the Minister must provide the applicant with a reasonable opportunity within a period of 45 days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter.

  • 2001, c. 9, s. 183
  • 2012, c. 31, s. 125(E)
 
Date modified: