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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 9Investments (continued)

Exceptions and Exclusions (continued)

Marginal note:Regulations restricting ownership

 The Governor in Council may make regulations

  • (a) for the purposes of subsection 930(4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the bank holding companies or other entities in respect of which that subsection does not apply, including prescribing bank holding companies or other entities on the basis of the activities they engage in;

  • (b) for the purposes of subsection 930(5) or (6), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the bank holding companies or other entities in respect of which either of those subsections does not apply, including prescribing bank holding companies or other entities on the basis of the activities they engage in;

  • (c) for the purposes of subsection 930(11), permitting a bank holding company to give up control of an entity; and

  • (d) restricting the ownership by a bank holding company of shares of a body corporate or of ownership interests in an unincorporated entity under sections 930 to 935 and imposing terms and conditions applicable to bank holding companies that own such shares or interests.

  • 2001, c. 9, s. 183

Portfolio Limits

Marginal note:Exclusion from portfolio limits

  •  (1) Subject to subsection (3), the value of all loans, investments and interests acquired by a bank holding company and any of its prescribed subsidiaries under section 934 or as a result of a realization of a security interest is not to be included in calculating the value of loans, investments and interests of the bank holding company and its prescribed subsidiaries under sections 938 to 940

    • (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and

    • (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property.

  • Marginal note:Extension

    (2) The Superintendent may, in the case of any particular bank holding company, extend any period referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

  • Marginal note:Exception

    (3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 941 to be an interest in real property and

    • (a) the bank holding company or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 941 to be an interest in real property; or

    • (b) the bank holding company or the subsidiary acquired the investment or interest under section 934 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 941 to be an interest in real property.

  • 2001, c. 9, s. 183

Real Property

Marginal note:Limit on total property interest

 A bank holding company shall not, and shall not permit its prescribed subsidiaries to, purchase or otherwise acquire an interest in real property or make an improvement to any real property in which the bank holding company or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the bank holding company in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank holding company.

  • 2001, c. 9, s. 183

Equities

Marginal note:Limits on equity acquisitions

 A bank holding company shall not, and shall not permit its prescribed subsidiaries to,

  • (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the bank holding company has, or by virtue of the acquisition would have, a substantial investment, or

  • (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a),

if the aggregate value of

  • (c) all participating shares, excluding participating shares of permitted entities in which the bank holding company has a substantial investment, and

  • (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the bank holding company has a substantial investment,

beneficially owned by the bank holding company and its prescribed subsidiaries exceeds, or the purchase or acquisition would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank holding company.

  • 2001, c. 9, s. 183

Aggregate Limit

Marginal note:Aggregate limit

 A bank holding company shall not, and shall not permit its prescribed subsidiaries to,

  • (a) purchase or otherwise acquire

    • (i) participating shares of a body corporate, other than those of a permitted entity in which the bank holding company has, or by virtue of the acquisition would have, a substantial investment,

    • (ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the bank holding company has, or by virtue of the acquisition would have, a substantial investment, or

    • (iii) interests in real property, or

  • (b) make an improvement to real property in which the bank holding company or any of its prescribed subsidiaries has an interest

if the aggregate value of

  • (c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the bank holding company and its prescribed subsidiaries, and

  • (d) all interests of the bank holding company in real property referred to in subparagraph (a)(iii)

exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank holding company.

  • 2001, c. 9, s. 183

Miscellaneous

Marginal note:Regulations

 For the purposes of this Division, the Governor in Council may make regulations

  • (a) defining the interests of a bank holding company in real property;

  • (b) determining the method of valuing those interests; or

  • (c) exempting classes of bank holding companies from the application of sections 937 to 940.

  • 2001, c. 9, s. 183

Marginal note:Divestment order

  •  (1) The Superintendent may, by order, direct a bank holding company to dispose of, within any period that the Superintendent considers reasonable, any loan, investment or interest made or acquired in contravention of this Division.

  • Marginal note:Divestment order

    (2) If, in the opinion of the Superintendent,

    • (a) an investment by a bank holding company or any entity it controls in shares of a body corporate or in ownership interests in an unincorporated entity enables the bank holding company to control the body corporate or the unincorporated entity, or

    • (b) the bank holding company or any entity it controls has entered into an arrangement whereby it or its nominee may veto any proposal put before

      • (i) the board of directors of a body corporate, or

      • (ii) a similar group or committee of an unincorporated entity,

      or whereby no proposal may be approved except with the consent of the bank holding company, the entity it controls or the nominee,

    the Superintendent may, by order, require the bank holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the bank holding company no longer controls the body corporate or unincorporated entity or has the ability to veto or otherwise defeat any proposal referred to in paragraph (b).

  • Marginal note:Divestment order

    (3) If

    • (a) a bank holding company

      • (i) fails to provide or obtain within a reasonable time the undertakings referred to in subsection 932(1), (2) or (4), or

      • (ii) is in default of an undertaking referred to in subsection 932(1) or (2) and the default is not remedied within ninety days after the day of receipt by the bank holding company of a notice from the Superintendent of the default, or

    • (b) a permitted entity referred to in subsection 932(4) is in default of an undertaking referred to in subsection 932(4) and the default is not remedied within ninety days after the day of receipt by the bank holding company of a notice from the Superintendent of the default,

    the Superintendent may, by order, require the bank holding company, within any period that the Superintendent considers reasonable, to do all things necessary to ensure that the bank holding company no longer has a substantial investment in the entity to which the undertaking relates.

  • Marginal note:Exception

    (4) Subsection (2) does not apply in respect of an entity in which a bank holding company has a substantial investment permitted by this Division.

  • 2001, c. 9, s. 183
 
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