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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2019-06-20 and last amended on 2019-06-17. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 2Status and Powers

Marginal note:Corporate powers

  •  (1) A bank holding company has the capacity of a natural person and, subject to this Act, the rights, powers and privileges of a natural person.

  • Marginal note:Powers restricted

    (2) A bank holding company shall not carry on any business or exercise any power that it is restricted by this Act from carrying on or exercising, or exercise any of its powers in a manner contrary to this Act.

  • Marginal note:Business in Canada

    (3) A bank holding company may carry on business throughout Canada.

  • Marginal note:Powers outside Canada

    (4) Subject to this Act, a bank holding company has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Canada to the extent and in the manner that the laws of that jurisdiction permit.

  • 1999, c. 28, s. 61
  • 2001, c. 9, s. 183

Marginal note:No invalidity

 No act of a bank holding company, including any transfer of property to or by a bank holding company, is invalid by reason only that the act or transfer is contrary to the bank holding company’s incorporating instrument or this Act.

  • 1999, c. 28, s. 62
  • 2001, c. 9, s. 183

Marginal note:By-law not necessary

 It is not necessary for a bank holding company to pass a by-law in order to confer any particular power on the bank holding company or its directors.

  • 1999, c. 28, s. 63
  • 2001, c. 9, s. 183

Marginal note:No personal liability

 The shareholders of a bank holding company are not, as shareholders, liable for any liability, act or default of the bank holding company except as otherwise provided by this Act.

  • 1999, c. 28, s. 63
  • 2001, c. 9, s. 183

Marginal note:No constructive notice

 No person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a bank holding company by reason only that the document has been filed with the Superintendent or the Minister or is available for inspection at an office of the bank holding company.

  • 1999, c. 28, s. 64, c. 31, ss. 16(F), 250
  • 2001, c. 9, s. 183

Marginal note:Authority of directors, officers and representatives

  •  (1) No bank holding company and no guarantor of an obligation of a bank holding company may assert against a person dealing with the bank holding company or against a person who has acquired rights from the bank holding company that

    • (a) the bank holding company’s incorporating instrument or any by-laws of the bank holding company have not been complied with;

    • (b) the persons named as directors of the bank holding company in the most recent return sent to the Superintendent under section 951 are not the directors of the bank holding company;

    • (c) the place named in the incorporating instrument or by-laws of the bank holding company is not the place where the head office of the bank holding company is situated;

    • (d) a person held out by the bank holding company as a director, officer or representative of the bank holding company has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the bank holding company or usual for a director, officer or representative; or

    • (e) a document issued by any director, officer or representative of the bank holding company with actual or usual authority to issue the document is not valid or not genuine.

  • Marginal note:Exception — knowledge

    (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the bank holding company.

  • 1999, c. 28, s. 65
  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 83

Marginal note:Sunset provision

  •  (1) Subject to subsections (2) and (4), bank holding companies shall not carry on business after the fifth anniversary of the day on which the Budget Implementation Act, 2018, No. 1 receives royal assent.

  • Marginal note:Extension

    (2) The Governor in Council may, by order, extend by up to six months the time during which bank holding companies may continue to carry on business. No more than one order may be made under this subsection.

  • Marginal note:Order not a regulation

    (3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.

  • Marginal note:Exception — dissolution

    (4) If Parliament dissolves on the fifth anniversary of the day on which the Budget Implementation Act, 2018, No. 1 receives royal assent or on any day within the six-month period before that anniversary or on any day within an extension ordered under subsection (2), bank holding companies may continue to carry on business until the end of the 180th day after the first day of the first session of the next Parliament.

  • 1999, c. 28, s. 65
  • 2001, c. 9, s. 183
  • 2006, c. 4, s. 199.1
  • 2007, c. 6, s. 105
  • 2012, c. 5, s. 77
  • 2016, c. 7, s. 119
  • 2018, c. 12, s. 356

DIVISION 3Incorporation and Continuance

Formalities of Incorporation

Marginal note:Incorporation of bank holding company

 On the application of one or more persons made in accordance with this Part, the Minister may, subject to this Division, issue letters patent incorporating a bank holding company.

  • 1999, c. 28, s. 66
  • 2001, c. 9, s. 183

Marginal note:Restrictions on incorporation

 Letters patent incorporating a bank holding company may not be issued if the application therefor is made by or on behalf of

  • (a) Her Majesty in right of Canada or in right of a province, an agency of Her Majesty in either of those rights, or an entity controlled by Her Majesty in either of those rights;

  • (b) the government of a foreign country or any political subdivision thereof;

  • (c) an agency of the government of a foreign country or any political subdivision thereof; or

  • (d) an entity, other than a foreign institution or any subsidiary of a foreign institution, that is controlled by the government of a foreign country or any political subdivision thereof.

  • 1999, c. 28, s. 66
  • 2001, c. 9, s. 183

Marginal note:National treatment

 If a proposed bank holding company would be a subsidiary of a foreign bank, within the meaning of any of paragraphs (a) to (f) of the definition foreign bank in section 2, letters patent to incorporate the bank holding company may not be issued unless the Minister is satisfied that, if the application is made by a non-WTO Member foreign bank, 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.

  • 1999, c. 28, s. 67
  • 2001, c. 9, s. 183

Marginal note:Application for incorporation

 An application for letters patent to incorporate a bank holding company setting out the names of the first directors of the bank holding company shall be filed with the Superintendent, together with such other information, material and evidence as the Superintendent may require.

  • 1999, c. 28, s. 68
  • 2001, c. 9, s. 183

Marginal note:Matters for consideration

 Before issuing letters patent to incorporate a bank holding company, the Minister 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 for the bank that is proposed to be its subsidiary;

  • (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the bank that is proposed to be its subsidiary;

  • (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.

  • 1999, c. 28, s. 69
  • 2000, c. 12, s. 6
  • 2001, c. 9, s. 183
 
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