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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2022-06-20 and last amended on 2022-02-26. Previous Versions

PART XIIForeign Banks (continued)

DIVISION 2General Prohibitions and Exceptions (continued)

Marginal note:Examination of representative offices

  •  (1) The Superintendent shall, from time to time, make or cause to be made any examination and inquiry into the operation of any representative office of a foreign bank and the conduct of the personnel in that office that the Superintendent considers necessary for the purpose of ascertaining whether the office is being operated, and whether the personnel of the office are conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522(a).

  • Marginal note:Powers of Superintendent

    (2) For the purposes of subsection (1), the Superintendent and any person acting under the direction of the Superintendent have the same powers and obligations that the Superintendent has in relation to the examination of banks under this Act.

  • 2001, c. 9, s. 132

Marginal note:Name of representative office

 If the name under which a representative office of a foreign bank is or will be identifying itself in Canada is one referred to in any of paragraphs 530(1)(a) to (e), the Superintendent may, as the case may be,

  • (a) refuse to grant the approval referred to in paragraph 522(a);

  • (b) impose restrictions on the use of the name in Canada; or

  • (c) direct the foreign bank to change the name.

  • 2007, c. 6, s. 57

Marginal note:Cancellation of registration

 The Superintendent may cancel the registration of a representative office of a foreign bank if

  • (a) the foreign bank requests the Superintendent to cancel the registration;

  • (b) the Superintendent is of the opinion that the representative office is not being operated, or the personnel of that office are not conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522(a); or

  • (c) the Superintendent is of the opinion that the foreign bank has failed to comply with a restriction imposed under paragraph 522.011(b) or a direction made under paragraph 522.011(c).

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 57

Marginal note:Business conducted from head office in Canada

  •  (1) Subject to subsections (2) and (3), if the head office of a foreign bank is located in Canada under paragraph 522(b), the foreign bank shall not conduct any business from that office with persons resident in Canada or with Her Majesty in right of Canada or a province except for the purpose of acquiring premises, supplies, services and staff for that office.

  • Marginal note:Exception

    (2) If a foreign bank, immediately before the establishment of its head office in Canada under paragraph 522(b), held deposits of, or had loans outstanding to, persons resident in Canada or Her Majesty in right of Canada or a province, the foreign bank may repay those deposits and collect those loans through the head office in Canada.

  • Marginal note:Exception

    (3) If a foreign bank controlled a bank or was a major shareholder of a bank immediately before the establishment of the foreign bank’s head office in Canada under paragraph 522(b), the foreign bank may continue to carry out from the head office in Canada any activities that were carried out from the head office of the foreign bank in relation to the bank before the establishment of the head office in Canada.

  • 2001, c. 9, s. 132

DIVISION 3No Financial Establishment in Canada

Marginal note:Permitted investment — foreign bank

  •  (1) A foreign bank that does not have a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity, so long as, by virtue of the acquisition, neither the foreign bank nor any entity associated with the foreign bank controls or becomes a major owner of

    • (a) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i); or

    • (b) a Canadian entity that is a financial services entity.

  • Marginal note:Permitted investment — associated entity

    (2) An entity that is associated with a foreign bank and that does not have a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity, so long as, by virtue of the acquisition, neither the entity nor the foreign bank, nor any other entity associated with the foreign bank, controls or becomes a major owner of

    • (a) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i); or

    • (b) a Canadian entity that is a financial services entity.

  • 2001, c. 9, s. 132

Marginal note:Permitted Canadian commercial branch

 A foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that does not have a financial establishment in Canada may maintain a branch in Canada or engage in or carry on business in Canada so long as less than

  • (a) the prescribed portion — or if no portion is prescribed, 10 per cent — of its business in Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of paragraphs (a) to (g) of the definition financial services entity in subsection 507(1); and

  • (b) the prescribed portion — or if no portion is prescribed, 10 per cent — of its business outside Canada, determined in the prescribed manner, consists of one or more activities referred to in any of

    • (i) paragraphs (a) to (g) of the definition financial services entity in subsection 507(1), and

    • (ii) paragraph (h) of that definition, except under prescribed circumstances.

  • 2001, c. 9, s. 132

Marginal note:Permitted branches re leasing

 Despite section 522.05, a foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that does not have a financial establishment in Canada and that outside Canada

  • (a) engages only in the activities referred to in the definition leasing entity in subsection 507(1), or

  • (b) engages only in activities other than those referred to in any of

    • (i) paragraphs (a) to (g) of the definition financial services entity in subsection 507(1), and

    • (ii) paragraph (h) of that definition, except under prescribed circumstances,

may in Canada engage in the activities of a leasing entity so long as it does not engage in any other activity in Canada.

  • 2001, c. 9, s. 132

DIVISION 4Financial Establishment in Canada

Investments

Marginal note:Investment in a financial institution

 Subject to the requirements relating to approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity referred to in any of paragraphs 468(1)(a) to (i).

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 58

Marginal note:Permitted investments

  •  (1) Subject to subsection (2) and the requirements relating to approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity, other than an entity referred to in any of paragraphs 468(1)(a) to (i), whose business is limited to one or more of the following:

    • (a) engaging in

      • (i) any financial service activity that a bank is permitted to engage in under any of paragraphs 409(2)(a) to (d), or

      • (ii) any other activity that a bank is permitted to engage in under section 410 or 411;

    • (b) acquiring or holding shares of, or ownership interests in, entities that a foreign bank or an entity associated with a foreign bank is permitted to acquire or hold under this Division or Division 8 — other than limited commercial entities, except in prescribed circumstances;

    • (b.1) acquiring or holding shares of, or ownership interests in, entities incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province;

    • (c) engaging in the provision of any services exclusively to any or all of the following, so long as the Canadian entity is also providing those services to the foreign bank or to any member of the foreign bank’s group, namely,

      • (i) the foreign bank,

      • (ii) any member of the foreign bank’s group,

      • (iii) any entity that is primarily engaged in the business of providing financial services,

      • (iv) any entity in which an entity referred to in subparagraph (iii) has a substantial investment and that is

        • (A) an entity in which a bank is permitted to acquire a substantial investment under section 468,

        • (B) an entity in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment under this section and section 522.07, or

        • (C) a prescribed entity, or

      • (v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;

    • (d) engaging in any activity that a bank is permitted to engage in — or in any other prescribed activity —, other than an activity referred to in paragraph (a) or (e), that relates to

      • (i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the foreign bank or by any member of the foreign bank’s group, or

      • (ii) if a significant portion of the business of the Canadian entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services;

    • (e) engaging in the activities referred to in the definition closed-end fund, mutual fund distribution entity, mutual fund entity or real property brokerage entity in subsection 464(1); and

    • (f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.

  • Marginal note:Additional restriction

    (2) A foreign bank or an entity associated with a foreign bank may not acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes any activity referred to in any of paragraphs (1)(a) to (e) if the activities of the Canadian entity include

    • (a) activities that a bank is not permitted to engage in under section 412, 417 or 418;

    • (b) dealing in securities, except as may be permitted under paragraph (1)(e) or as may be permitted to a bank under paragraph 409(2)(c);

    • (c) activities that a bank is not permitted to engage in under section 416, if the Canadian entity engages in the activities of a finance entity or of any other entity as may be prescribed;

    • (d) acquiring or holding control of, or a substantial investment in, another Canadian entity unless

      • (i) in the case of a Canadian entity that is controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section or section 522.07 or 522.1 or Division 8, or

      • (ii) in the case of a Canadian entity that is not controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section, section 522.07, any of paragraphs 522.1(a) or (c) to (e) or Division 8; or

    • (e) any prescribed activity.

  • Marginal note:Exception

    (2.1) Despite paragraph (2)(a), a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied:

    • (a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and

    • (b) if the entity engages in other business, that business is limited to engaging in one or more of the following:

      • (i) the activities of a mutual fund distribution entity,

      • (ii) any activity that a bank is permitted to engage in under paragraph 410(1)(c.2), and

      • (iii) the provision of investment counselling services and portfolio management services.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 59
  • 2012, c. 5, s. 55

Marginal note:Investment in a limited commercial entity — foreign bank

  •  (1) Subject to the requirements relating to approval set out in Division 5, a foreign bank that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if

    • (a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(a) to (i);

    • (b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition financial services entity in subsection 507(1), determined in the prescribed manner;

    • (c) the Canadian entity does not engage in any leasing activities; and

    • (d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or any entity associated with the foreign bank.

  • Marginal note:Investment in a limited commercial entity — entity associated with a foreign bank

    (2) Subject to the requirements relating to approval set out in Division 5, an entity that is associated with a foreign bank and that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if

    • (a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(a) to (i);

    • (b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition financial services entity in subsection 507(1), determined in the prescribed manner;

    • (c) the Canadian entity does not engage in leasing activities; and

    • (d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank.

  • Marginal note:Investment in holding body corporate — limited commercial entities

    (3) A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity whose business is limited to acquiring or holding shares of, or ownership interests in, limited commercial entities.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 60

Marginal note:Acquisition of other investments

 A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity

  • (a) by way of an investment permitted by any of sections 522.11 to 522.13;

  • (b) by way of a temporary investment permitted by section 522.14;

  • (c) as a result of a default that has occurred under the terms of an agreement with respect to a loan or under any other documents governing the terms of a loan, as permitted by section 522.15;

  • (d) through a realization of security, as permitted by section 522.15; or

  • (e) if it does so in accordance with regulations made under paragraph 522.23(a) concerning specialized financing.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 61
 
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