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Bank Act

Version of section 540 from 2009-02-19 to 2012-05-23:


Marginal note:Restrictions

  •  (1) Where subsection 524(2) applies, the authorized foreign bank shall not, in respect of its business in Canada,

    • (a) except as permitted by subsection (4), engage in the business of accepting deposit liabilities, or otherwise borrow money;

    • (b) subject to the regulations, act as an agent for any person in the taking of deposit liabilities; or

    • (c) guarantee any securities or accept any bills of exchange or depository bills that are

      • (i) issued by any person, and

      • (ii) intended by the issuer or any party to be sold or traded.

  • Marginal note:Requirements

    (2) Where subsection 524(2) applies, the authorized foreign bank shall, in accordance with any regulations that may be made,

    • (a) post notices in its branches in Canada that it does not accept deposits in Canada and that it is not a member institution of the Canada Deposit Insurance Corporation; and

    • (b) include in its advertisements the prescribed information.

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations respecting notices and advertisements for the purpose of subsection (2).

  • Marginal note:Authorized borrowing

    (4) For the purposes of paragraph (1)(a), an authorized foreign bank may

    • (a) accept deposit liabilities or otherwise borrow money from

      • (i) a financial institution other than a foreign bank, or

      • (ii) a foreign bank described in any of subparagraphs 508(1)(a)(i) to (iii),

      by means of financial instruments that cannot be subsequently sold or traded; or

    • (b) accept deposit liabilities or otherwise borrow money, from prescribed classes of entities referred to in subparagraph (a)(i) or (ii), by means of financial instruments that can be sold to or traded with those classes of entities, in accordance with regulations made pursuant to subsection (6).

  • Marginal note:Non-application of paragraph (1)(c)

    (5) Paragraph (1)(c) does not apply in respect of

    • (a) securities or bills of exchange that are sold to or traded with any entity referred to in subparagraph (4)(a)(i) or (ii) and that cannot be subsequently sold or traded; or

    • (b) securities or bills of exchange that can be sold to or traded with prescribed classes of entities referred to in subparagraph (4)(a)(i) or (ii), in accordance with regulations made pursuant to subsection (6).

  • Marginal note:Regulations

    (6) The Governor in Council may make regulations

    • (a) prescribing the class, type or amount of deposit liabilities or borrowings referred to in paragraph (4)(b);

    • (b) prescribing the class, type or amount of securities or bills of exchange referred to in paragraph (5)(b);

    • (c) prescribing the classes of entities referred to in paragraph (4)(b) or (5)(b);

    • (d) prescribing the terms and conditions respecting any sale or trade of financial instruments, securities or bills of exchange;

    • (d.1) respecting circumstances in which and the conditions under which an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2) may act as agent for any person in the taking of deposit liabilities; and

    • (e) respecting such other matters or things as are necessary to carry out the purposes of this section.

  • 1991, c. 46, s. 540
  • 1996, c. 6, s. 16
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 141
  • 2007, c. 6, s. 83
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