Bank Act (S.C. 1991, c. 46)

Marginal note:Permission to become another body corporate

402.1 If subsection 402(1) applies, the Minister may, on application by the bank, permit the bank to apply to be continued as a body corporate under any Act of Parliament referred to in subsection 39.1(1) or 39.2(1) instead of, or in addition to, issuing an order under subsection 402(1).

Marginal note:Application to court

• 403 (1) If a person fails to comply with a direction made under subsection 401.2(7) or 402(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction.

• Marginal note:Court order

  (2) A court may, on an application under subsection (1), make any order that the circumstances require to give effect to the terms of the direction, including requiring the bank concerned to sell the shares, or to redeem, purchase or transfer to another member the membership shares, that are the subject-matter of the direction.

• Marginal note:Appeal

  (3) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court.

General Provisions

Marginal note:Interest of securities underwriter

404 This Part does not apply to a securities underwriter in respect of shares of a body corporate or ownership interests in an unincorporated entity that are acquired by the underwriter in the course of a distribution to the public of those shares or ownership interests and that are held by the underwriter for a period of not more than six months.

Marginal note:Arrangements to effect compliance

• 405 (1) The directors of a bank may make such arrangements as they deem necessary to carry out the intent of this Part and, in particular, but without limiting the generality of the foregoing, may

  • (a) require any person in whose name a share or membership share of the bank is held to submit a declaration setting out

    • (i) the beneficial ownership of the share or membership share, and

    • (ii) any other information that the directors consider relevant for the purposes of this Part;

  • (b) require any person who wishes to have a transfer of a share or membership share registered in the name of, or to have a share or membership share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share or membership share; and

  • (c) determine the circumstances in which a declaration referred to in paragraph (a) is to be required, the form of the declaration and the times at which it is to be submitted.

• Marginal note:Order of Superintendent

  (2) The Superintendent may, by order, direct a bank to obtain from any person in whose name a share or membership share of the bank is held a declaration setting out the name of every entity controlled by that person and containing information concerning

  • (a) the ownership or beneficial ownership of the share or membership share; and

  • (b) such other related matters as are specified by the Superintendent.

• Marginal note:Compliance required

  (3) As soon as possible after receipt by a bank of a direction under subsection (2),

  • (a) the bank shall comply with the direction; and

  • (b) every person who is requested by the bank to provide a declaration containing information referred to in subsection (1) or (2) shall comply with the request.

• Marginal note:Outstanding declaration: effect

  (4) If, under this section, a declaration is required to be submitted by a shareholder, member or other person in respect of the issue or transfer of any share or membership share, a bank may refuse to issue the share or membership share or register the transfer unless the required declaration is submitted.

Marginal note:Reliance on information

406 A bank and any person who is a director or an officer, employee or agent of the bank may rely on any information contained in a declaration required by the directors pursuant to section 405 or on any information otherwise acquired in respect of any matter that might be the subject of such a declaration, and no action lies against the bank or any such person for anything done or omitted to be done in good faith in reliance on any such information.

407 [Repealed, 1994, c. 47, s. 23]

Marginal note:Competition Act

408 Nothing in, or done under the authority of, this Act affects the operation of the Competition Act.

PART VIIIBusiness and Powers

General Business

Marginal note:Main business

• 409 (1) Subject to this Act, a bank shall not engage in or carry on any business other than the business of banking and such business generally as appertains thereto.

• Marginal note:Idem

  (2) For greater certainty, the business of banking includes

  • (a) providing any financial service;

  • (b) acting as a financial agent;

  • (c) providing investment counselling services and portfolio management services; and

  • (d) issuing payment, credit or charge cards and, in cooperation with others including other financial institutions, operating a payment, credit or charge card plan.

Marginal note:Additional activities

• 410 (1) In addition, a bank may

  • (a) hold, manage and otherwise deal with real property;

  • (b) provide prescribed bank-related data processing services;

  • (c) outside Canada or, with the prior written approval of the Minister, in Canada, engage in any of the following activities, namely,

    • (i) collecting, manipulating and transmitting

      • (A) information that is primarily financial or economic in nature,

      • (B) information that relates to the business of a permitted entity, as defined in subsection 464(1), or

      • (C) any other information that the Minister may, by order, specify,

    • (ii) providing advisory or other services in the design, development or implementation of information management systems,

    • (iii) designing, developing or marketing computer software, and

    • (iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the bank is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services;

  • (c.1) with the prior written approval of the Minister, develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used

    • (i) to provide information that is primarily financial or economic in nature,

    • (ii) to provide information that relates to the business of a permitted entity, as defined in subsection 464(1), or

    • (iii) for a prescribed purpose or in prescribed circumstances;

  • (c.2) engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services;

  • (d) promote merchandise and services to the holders of any payment, credit or charge card issued by the bank;

  • (e) engage in the sale of

    • (i) tickets, including lottery tickets, on a non-profit public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest,

    • (ii) urban transit tickets, and

    • (iii) tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government or governments;

  • (f) act as a custodian of property;

  • (g) act as receiver, liquidator or sequestrator; and

  • (h) provide identification, authentication or verification services.

• Marginal note:Restriction

  (2) Except as authorized by or under this Act, a bank shall not deal in goods, wares or merchandise or engage in any trade or other business.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations

  • (a) respecting what a bank may or may not do with respect to the carrying on of the activities referred to in paragraphs (1)(c) to (c.2);

  • (b) imposing terms and conditions in respect of

    • (i) the provision of financial services referred to in paragraph 409(2)(a) that are financial planning services,

    • (ii) the provision of services referred to in paragraph 409(2)(c), and

    • (iii) the carrying on of the activities referred to in any of paragraphs (1)(c) to (c.2); and

  • (c) respecting the circumstances in which banks may be exempted from the requirement to obtain the approval of the Minister before carrying on a particular activity referred to in paragraph (1)(c) or (c.1).

Marginal note:Networking

• 411 (1) Subject to section 416, a bank may

  • (a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 464(1) or a prescribed entity and may enter into an arrangement with any person in respect of the provision of that service; or

  • (b) refer any person to any such financial institution or entity.

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the disclosure of

  • (a) the name of the principal for whom a bank is acting as agent pursuant to subsection (1); and

  • (b) whether any commission is being earned by a bank when acting as agent pursuant to subsection (1).

Marginal note:Restriction on fiduciary activities

412 No bank shall act in Canada as

• (a) an executor, administrator or official guardian or a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person; or

• (b) a trustee for a trust.

Marginal note:Restriction on deposit taking

• 413 (1) A bank shall not accept deposits in Canada unless

  • (a) it is a member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act;

  • (b) it has been authorized under subsection 26.03(1) of that Act to accept deposits without being a member institution, as defined in section 2 of that Act; or

  • (c) the order approving the commencement and carrying on of business by the bank authorizes it to accept deposits solely in accordance with subsection (3).

• (2) [Repealed, 2001, c. 9, s. 102]

• Marginal note:Deposits that fall below $150,000

  (3) A bank referred to in paragraph (1)(b) or (c) shall ensure that, on each day that is at least 30 days after the bank receives the authorization referred to in that paragraph,

  A/B ≤ 0.01

  where

  A

  is the sum of all amounts each of which is the sum of all the deposits held by the bank at the end of a day in the preceding 30 days each of which deposits is less than $150,000 and payable in Canada; and

  B

  is the sum of all amounts each of which is the sum of all deposits held by the bank at the end of a day in those preceding 30 days and payable in Canada.

• Marginal note:Exchange rate

  (4) For the purpose of subsection (3), the rate of exchange that shall be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada shall be determined in accordance with rules prescribed under subsection 26.03(2) of the Canada Deposit Insurance Corporation Act.

• Definition of deposit

  (5) For the purpose of subsection (3), deposit has the meaning that would be given to it by the schedule to the Canada Deposit Insurance Corporation Act for the purposes of deposit insurance if that schedule were read without reference to subsections 2(2), (5) and (6) of that schedule, but does not include prescribed deposits.

• Marginal note:Regulations

  (6) The Governor in Council may make regulations

  • (a) prescribing the deposits referred to in subsection (5); and

  • (b) prescribing terms and conditions with respect to the acceptance of those deposits.

413.1 [Repealed, 2018, c. 27, s. 319]

Marginal note:Deposits less than $150,000

• 413.2 (1) Subject to the regulations, a bank referred to in paragraph 413(1)(b) or (c) may not, in respect of its business in Canada, act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

• Meaning of deposit

  (2) In this section, deposit has the meaning assigned to that term by subsection 413(5).

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the circumstances in which, and the conditions under which, a bank referred to in subsection (1) may act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

Marginal note:Shared premises

• 413.3 (1) Subject to the regulations, no bank referred to in paragraph 413(1)(b) or (c) shall carry on business in Canada on premises that are shared with those of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the bank.

• Marginal note:Limitation

  (2) Subsection (1) only applies in respect of premises or any portion of premises on which both the bank and the member institution carry on business with the public and to which the public has access.

• Marginal note:Adjacent premises

  (3) Subject to the regulations, no bank referred to in paragraph 413(1)(b) or (c) shall carry on business in Canada on premises that are adjacent to a branch or office of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the bank, unless the bank clearly indicates to its customers that its business and the premises on which it is carried on are separate and distinct from the business and premises of the affiliated member institution.

• Marginal note:Regulations

  (4) The Governor in Council may make regulations

  • (a) respecting the circumstances in which, and the conditions under which, a bank referred to in paragraph 413(1)(b) or (c) may carry on business in Canada on premises that are shared with those of a member institution referred to in subsection (1); and

  • (b) respecting the circumstances in which, and the conditions under which, a bank referred to in paragraph 413(1)(b) or (c) may carry on business in Canada on premises that are adjacent to a branch or office of a member institution referred to in subsection (3).