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Canada Deposit Insurance Corporation Act (R.S.C., 1985, c. C-3)

Act current to 2019-06-20 and last amended on 2019-05-10. Previous Versions

Provincial Insuring Arrangements (continued)

Marginal note:Short term loans to insuring agents

 The Corporation may, with the approval of the Governor in Council and on such terms and conditions as the Governor in Council may prescribe, enter into an agreement with an agent of the government of a province that guarantees or insures deposits with provincial institutions in that province, to extend to that agent short term loans, secured by such security as the Corporation deems adequate, to enable that agent to meet short term requirements for liquid funds arising from its operations.

  • R.S., c. C-3, s. 33

Restructuring of Federal Member Institutions

Resolution Plans

Marginal note:Submission of plan

 A domestic systemically important bank shall, on the request of the Corporation, develop and maintain a resolution plan that meets the requirements referred to in paragraph 11(2)(e) and shall submit that plan to the Corporation.

  • 2017, c. 20, s. 110

Vesting in Corporation and Appointing Corporation as Receiver

Marginal note:Report of Superintendent

  •  (1) Where the Superintendent is of the opinion that

    the Superintendent, after providing the federal member institution with a reasonable opportunity to make representations, shall, in writing, report thereon to the Corporation.

  • Marginal note:Forming opinion

    (2) For the purposes of subsection (1), the Superintendent may take into account all matters the Superintendent considers relevant, but in all cases the Superintendent shall have regard to whether, in the opinion of the Superintendent,

    • (a) the federal member institution is dependent to an excessive extent on loans, advances, guarantees or other financial assistance to sustain its operations;

    • (b) the federal member institution has lost the confidence of depositors and the public;

    • (c) the federal member institution’s regulatory capital, within the meaning assigned to that expression by the Bank Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act, whichever is applicable, is or is about to become substantially deficient; or

    • (d) the federal member institution has failed to pay any liability that has become due and payable or will not be able to pay its liabilities as they become due and payable.

  • Marginal note:Report by Superintendent on winding-up circumstances

    (3) Where the Superintendent is of the opinion that

    • (a) circumstances exist in respect of a federal member institution that would allow the Superintendent to take control of the federal member institution under the Bank Act, the Trust and Loan Companies Act or the Cooperative Credit Associations Act, and

    • (b) if such control were taken, grounds would exist for the making of a winding-up order in respect of the federal member institution,

    the Superintendent, after providing the federal member institution with a reasonable opportunity to make representations, shall, in writing, report thereon to the Corporation.

  • Marginal note:Urgency

    (4) Despite subsections (1) and (3), the Superintendent may report to the Corporation orally if he or she is of the opinion that the federal member institution’s circumstances must be considered without delay.

  • 1992, c. 26, s. 11
  • 1996, c. 6, s. 41
  • 2001, c. 9, s. 211
  • 2009, c. 2, s. 242

Marginal note:Request of Corporation

 On receipt of a report made by the Superintendent under section 39.1, the Corporation may

  • (a) after determining that a transaction referred to in section 39.2 is reasonably likely to be expeditiously carried out after the making of the order, request the Minister to recommend that one or more orders be made under subsection 39.13(1); or

  • (b) in the case of a domestic systemically important bank, request the Minister to recommend that one or more orders be made under subsection 39.13(1) and that an order be made under subsection 39.13(1.3).

  • 1992, c. 26, s. 11
  • 1996, c. 6, s. 41
  • 1999, c. 31, s. 28(F)
  • 2016, c. 7, s. 130

Marginal note:Recommendation of Minister

 If a request referred to in section 39.11 is made by the Corporation, the Minister may, if he or she is of the opinion that it is in the public interest to do so, recommend to the Governor in Council that one or more orders be made under subsection 39.13(1) in respect of the federal member institution and, in the case of a domestic systemically important bank, that an order be made under subsection 39.13(1.3) in respect of that institution.

  • 1992, c. 26, s. 11
  • 1996, c. 6, s. 41
  • 2016, c. 7, s. 130

Marginal note:Order

  •  (1) The Governor in Council may, on the recommendation of the Minister made under section 39.12, by order,

    • (a) vest in the Corporation the shares and subordinated debt of the federal member institution that are specified in the order;

    • (b) appoint the Corporation as receiver in respect of the federal member institution;

    • (c) direct the Minister to incorporate a federal institution designated in the order as a bridge institution and specify the date and time as of which the federal member institution’s deposit liabilities are assumed; or

    • (d) direct the Corporation to carry out a conversion under subsection 39.2(2.3).

  • Marginal note:Condition precedent

    (1.1) The making of an order, under paragraph (1)(b), appointing the Corporation as receiver of the federal member institution is a condition precedent to the making of an order under paragraph (1)(c) in respect of the federal member institution.

  • Marginal note:Conditions for conversion

    (1.2) An order may be made under paragraph (1)(d) in respect of the federal member institution only if the institution is a domestic systemically important bank and an order has also been made under paragraph (1)(a) or (b) in respect of the institution.

  • Marginal note:Order — longer period

    (1.3) The Governor in Council may, on the recommendation of the Minister made under section 39.12, by order, require the Corporation to apply for a winding-up order in respect of the federal member institution in accordance with subsection 39.22(1.1).

  • Marginal note:Effects of vesting order

    (2) An order made under paragraph (1)(a)

    • (a) vests in the Corporation the shares and subordinated debt that are subject to the order, free from any adverse claim, including any claim that a transfer was wrongful or that a particular adverse person was the owner of or had an interest or right in respect of the shares or subordinated debt, even though the Corporation knows of the adverse claim;

    • (b) extinguishes any such adverse claim to the extent that the claim is a claim that a person other than the Corporation is the owner of or has an interest or right in respect of the shares or subordinated debt;

    • (c) does not extinguish any such adverse claim to the extent that the claim is a personal claim against a person other than the Corporation or a person claiming under it;

    • (d) does not prevent a secured creditor or assignee or successor in interest of the person who was the holder of the shares or subordinated debt immediately before the making of the order from being entitled to receive compensation under section 39.23; and

    • (e) gives the Corporation the right to recover, out of the assets of the federal member institution and in priority to all other claims, all the costs, charges and expenses properly incurred by the Corporation in furtherance of the order, including those related to its operation of the institution.

  • Marginal note:Federal credit union

    (2.1) In addition to subsection (2), if an order made under paragraph (1)(a) is in respect of a federal credit union, the Corporation has the powers, rights and privileges it would have if it were a member of the federal credit union and the federal credit union is exempt from any requirement to have a minimum number of members for so long as the shares are vested in the Corporation.

  • Marginal note:Effects of receivership order

    (3) An order made under paragraph (1)(b)

    • (a) constitutes the Corporation as the exclusive receiver of the assets and undertaking of the federal member institution or of such part thereof as may be specified in the order;

    • (b) gives the Corporation, as receiver, in respect of the assets and undertaking of the federal member institution or such part thereof as may be specified in the order, the power to

      • (i) enter the federal member institution and take possession and control of the assets and require any person therein to account for and deliver up to the Corporation possession and control of the assets,

      • (ii) subject to subparagraph (iii), sell or otherwise dispose of the assets and undertaking by private or public sale or in such other manner and on such terms and conditions as the Corporation deems appropriate,

      • (iii) sell or otherwise dispose of any asset that is subject to an agreement creating a security interest to any person who agrees to assume the obligation secured by the security interest,

      • (iv) arrange for the assumption by any person of all or any part of the federal member institution’s liabilities,

      • (v) carry on the business of the federal member institution to the extent that the Corporation deems is necessary or beneficial to the receivership,

      • (vi) sue for, defend, compromise and settle, in the name of the federal member institution, any claim made by or against it,

      • (vii) in the name of the federal member institution, do all acts and execute all receipts and other documents and for that purpose, when necessary, use its seal, and

      • (viii) do all such other things as may be necessary or incidental to the exercise of the Corporation’s rights, powers, privileges and immunities as receiver; and

    • (c) gives the Corporation the right to recover, out of the assets of the federal member institution and in priority to all other claims, all the costs, charges and expenses properly incurred by the Corporation in furtherance of the order, including those related to its operation of the institution.

  • Marginal note:For greater certainty — bankruptcy

    (4) For greater certainty, shares and subordinated debt that are subject to an order made under paragraph (1)(a) and that, immediately before the making of the order, are vested in a trustee in bankruptcy under the Bankruptcy and Insolvency Act are vested in the Corporation.

  • Marginal note:For greater certainty — exercising rights

    (4.1) For greater certainty, an order made under paragraph (1)(a) or (b) prevents any person, other than the Corporation, who is the holder of shares or subordinated debt or other debts or liabilities of the federal member institution or who is a party to or a beneficiary of a contract with the institution, and any secured creditor or assignee or successor in interest of such a person, from exercising any voting or other rights arising from the person’s status in any manner that could defeat or interfere with the rights, powers, privileges and immunities of the Corporation as holder of shares or subordinated debt or as receiver, as the case may be.

  • Marginal note:Receiver order dealings

    (5) Where an order is made under paragraph (1)(b),

    • (a) the Corporation, as receiver, may exercise its powers, rights, privileges and immunities without leave, approval or other intervention of a court, but may seek the assistance of a superior court in order to give effect to those powers, rights, privileges and immunities,

    • (b) an asset of the federal member institution that is acquired from the Corporation, as receiver, shall, except to the extent that it is an asset referred to in subparagraph (3)(b)(iii), be acquired free of any adverse claim of the federal member institution or any other person, and

    • (c) the Corporation, as receiver, may cause or refrain from causing any obligation of the federal member institution to be performed and may cause the federal member institution to incur an obligation or do so on its behalf,

    and the Corporation shall not, by reason of its appointment as receiver or any action taken by it, be held to have assumed or incurred any obligation of the federal member institution for its own account.

  • Marginal note:Non-liability — environmental matters

    (5.1) Without limiting the generality of subsection (5) and despite anything in federal or provincial law, the Corporation, as receiver, is not liable in that capacity for any environmental condition that arose or environmental damage that occurred

    • (a) before the Corporation’s appointment as receiver; or

    • (b) after the Corporation’s appointment as receiver unless it is established that the condition arose or the damage occurred as a result of the Corporation’s gross negligence or wilful misconduct or, in Quebec, the Corporation’s gross or intentional fault.

  • Marginal note:Reports, etc., still required

    (5.2) Nothing in subsection (5.1) exempts the Corporation, as receiver, from any duty to report or make disclosure imposed by a law referred to in that subsection.

  • Marginal note:Non-liability — certain orders

    (5.3) Without limiting the generality of subsection (5) and despite anything in federal or provincial law but subject to subsection (5.2), if an order is made that has the effect of requiring the Corporation, as receiver, to remedy any environmental condition or environmental damage affecting property involved in the receivership, the Corporation, as receiver, is not liable for failure to comply with the order, and is not liable for any costs that are or would be incurred by any person in carrying out the terms of the order,

    • (a) if, within the time that is specified in the order, or within 10 days after the appointment of the Corporation as receiver if the order is in effect when the Corporation is appointed as receiver, the Corporation, as receiver,

      • (i) complies with the order, or

      • (ii) on notice to the person who issued the order, abandons, disposes of or otherwise releases any interest in any real property, or any right in any immovable, affected by the condition or damage; or

    • (b) if the Corporation, as receiver, had, before the order was made, abandoned, disposed of or otherwise released any interest in any real property, or any right in any immovable, affected by the condition or damage.

  • Marginal note:Non-liability — employees

    (5.4) Without limiting the generality of subsection (5) and despite anything in federal or provincial law, the Corporation, as receiver, is not liable in respect of a liability, including one as a successor employer,

    • (a) that is in respect of the employees or former employees of the federal member institution or a predecessor of the federal member institution or in respect of a pension plan for the benefit of those employees or former employees; and

    • (b) that existed before the Corporation is appointed as receiver or that is calculated by reference to a period before the Corporation’s appointment.

  • Marginal note:Liability of other successor employers

    (5.5) Subsection (5.4) does not affect the liability of a successor employer other than the Corporation, as receiver.

  • Marginal note:Order conclusive

    (6) An order made under this section and any action taken or decision made in furtherance of such an order are for all purposes final and conclusive and shall not be questioned or reviewed in any court.

  • 1992, c. 26, ss. 11, 16
  • 1996, c. 6, s. 41
  • 2009, c. 2, s. 243
  • 2010, c. 12, ss. 1888, 2100
  • 2012, c. 5, s. 196
  • 2016, c. 7, s. 131
 
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