Bank Act

Marginal note:Prohibited activities — non-bank affiliates

• 519 (1) Despite anything in this Part, but subject to subsection (5) and section 509, a non-bank affiliate of a foreign bank shall not, in Canada,

  • (a) engage in the business of accepting deposit liabilities;

  • (b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank, other than for

    • (i) an authorized foreign bank,

    • (ii) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society, or

    • (iii) an entity referred to in any of paragraphs 468(1)(a), (c), (d) and (h) or a trust or loan corporation referred to in paragraph 468(1)(g); or

  • (c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.

• Marginal note:Disclosure of status

  (2) Despite anything in this Part, but subject to subsections (4) to (6) and section 509, a non-bank affiliate of a foreign bank that carries on as part of its business the provision of financial services shall not borrow money in Canada from the public without disclosing that

  • (a) the non-bank affiliate is not a member institution of the Canada Deposit Insurance Corporation;

  • (b) the liability incurred by the non-bank affiliate through the borrowing is not a deposit; and

  • (c) the non-bank affiliate is not regulated as a financial institution in Canada.

• Marginal note:Manner of disclosure

  (3) The disclosure shall be

  • (a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

  • (b) in any other manner that may be prescribed.

• Marginal note:Exception for certain borrowing

  (4) Subsection (2) does not apply

  • (a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or

  • (b) except as may be provided in any regulations, to a borrowing

    • (i) from a person in an amount of $150,000 or more, or

    • (ii) through the issue of instruments in denominations of $150,000 or more.

• Marginal note:Exception - deposit-taking institutions

  (5) Subsections (1) and (2) do not apply to a non-bank affiliate that is

  • (a) a trust or loan corporation incorporated under an Act of Parliament or of the legislature of a province;

  • (b) a Canadian entity referred to in paragraph 468(1)(d) or (h); or

  • (c) a prescribed entity.

• Marginal note:Exception - insurance company or securities dealer

  (6) Subsection (2) does not apply if the non-bank affiliate is

  • (a) an insurance company incorporated under an Act of Parliament or of the legislature of a province;

  • (b) a bank holding company or an insurance holding company;

  • (c) an entity controlled by a bank holding company or an insurance holding company or in which a bank holding company or an insurance holding company has a substantial investment;

  • (d) a financial institution referred to in paragraph (g) of the definition “financial institution” in section 2; or

  • (e) a prescribed entity.