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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 VICorporate Governance (continued)

Corporate Records (continued)

Insider Reporting

Marginal note:Insider report

 An insider shall submit an insider report in accordance with the regulations.

  • 1991, c. 46, s. 266
  • 1997, c. 15, s. 31
  • 2005, c. 54, s. 56

Marginal note:Exemption by Superintendent

 On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 266. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.

  • 1991, c. 46, s. 267
  • 2005, c. 54, s. 56

 [Repealed, 2005, c. 54, s. 56]

Marginal note:Regulations

 The Governor in Council may make regulations for carrying out the purposes of sections 266 and 267, including

  • (a) defining insider for the purposes of sections 266 and 267;

  • (b) respecting the form and content of an insider report; and

  • (c) respecting the submission or publication of an insider report.

  • 1991, c. 46, s. 268
  • 2005, c. 54, s. 56

 [Repealed, 2005, c. 54, s. 56]

Insider Trading

Meaning of insider

  •  (1) In this section, insider means with respect to a distributing bank

    • (a) a director or officer of the bank;

    • (b) a director or officer of a subsidiary of the bank;

    • (c) a director or officer of a body corporate that enters into a business combination with the bank; or

    • (d) a person employed or retained by the bank.

  • Marginal note:Prohibition — short sale

    (2) No insider may knowingly sell, directly or indirectly, a security of a distributing bank or of any of the distributing bank’s affiliates if the insider does not own or has not fully paid for the security.

  • Marginal note:Exception

    (3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they

    • (a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

    • (b) transfer the convertible security, option or right to the purchaser.

  • Marginal note:Prohibition — calls and puts

    (4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of a bank or of any of the bank’s affiliates.

  • 1991, c. 46, s. 270
  • 2005, c. 54, s. 57

Civil remedies

Extended meaning of insider

  •  (1) In this section and sections 271.1 and 272, insider with respect to a bank means

    • (a) the bank;

    • (b) an affiliate of the bank;

    • (c) a director or officer of the bank or of any person described in paragraph (b), (d) or (f);

    • (d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the bank carrying more than the prescribed percentage of the voting rights attached to all of the bank’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;

    • (e) a person, other than a person described in paragraph (f), who is employed or retained by the bank or by a person described in paragraph (f);

    • (f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the bank;

    • (g) a person who received material confidential information concerning the bank while they were a person described in any of paragraphs (a) to (f);

    • (h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or

    • (i) a prescribed person.

  • Extended meaning of insider — federal credit union

    (1.1) In addition to subsection (1), in this section and sections 271.1 and 272, insider with respect to a bank that is a federal credit union means a member of the federal credit union who holds more than the prescribed percentage of the membership shares of the federal credit union.

  • Extended meaning of security

    (2) For the purposes of this section, each of the following is deemed to be a security of a bank:

    • (a) a membership share of the bank, if the bank is a federal credit union;

    • (a.1) a put, call, option or other right or obligation to purchase or sell a security of the bank; and

    • (b) a security of another entity, the market price of which varies materially with the market price of the securities of the bank.

  • Marginal note:Deemed insider — take-over bid or business combination

    (3) For the purposes of this section and subsection 271.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a bank or to enter into a business combination with a bank is an insider of the bank with respect to material confidential information obtained from the bank.

  • Marginal note:Deemed insider — affiliate or associate

    (4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the bank referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “bank” are to be read as references to “person described in subsection (3)”.

  • Meaning of associate

    (5) In subsection (4), associate means with respect to a person

    • (a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;

    • (b) a partner of the person acting on behalf of the partnership of which they are partners;

    • (c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;

    • (d) a spouse or common-law partner of the person;

    • (e) a child of the person or of their spouse or common-law partner; or

    • (f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.

  • Marginal note:Insider trading — compensation to sellers and purchasers

    (6) An insider of a bank who purchases or sells a security of the bank with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the bank is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that

    • (a) the insider reasonably believed that the information had been generally disclosed;

    • (b) the information was known or ought reasonably to have been known by the seller or purchaser; or

    • (c) the purchase or sale of the security took place in the prescribed circumstances.

  • Marginal note:Insider trading — compensation to bank

    (7) The insider is accountable to the bank for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).

  • 1991, c. 46, s. 271
  • 2005, c. 54, s. 57
  • 2010, c. 12, s. 2017
 
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