PART VIIIBusiness and Powers (continued)
General Business (continued)
Marginal note:Restriction on guarantees
(2) Paragraph (1)(a) does not apply where the person on whose behalf the bank has undertaken to guarantee the payment or repayment is a subsidiary of the bank.
(3) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section.
- 1991, c. 46, s. 414
- 1997, c. 15, s. 44
- 2001, c. 9, s. 105
Marginal note:Restriction on securities activities
415 A bank shall not deal in Canada in securities to the extent prohibited or restricted by such regulations as the Governor in Council may make for the purposes of this section.
415.1 (1) It is prohibited for a bank to issue a debt obligation in relation to which the amounts of principal and interest owing are guaranteed to be paid from loans or other assets held by an entity that is created and organized for the principal purpose of holding those loans or other assets and with the intention of legally isolating those loans or other assets from the bank, unless
(b) the bank is a registered issuer as defined in section 21.5 of that Act other than one whose right to issue covered bonds has been suspended; and
(c) the debt obligation is issued under a registered program as defined in section 21.5 of that Act.
(2) The Governor in Council may make regulations exempting any type of debt obligation from the application of subsection (1).
- 2012, c. 19, s. 362
Marginal note:Derivatives and eligible financial contracts — regulations
Definition of derivative
(2) In this section, derivative means an option, swap, futures contract, forward contract or other financial or commodity contract or instrument whose market price, value, delivery obligations, payment obligations or settlement obligations are derived from, referenced to or based on an underlying interest, including a price, rate, index, value, variable, event, probability or thing.
Definition of eligible financial contract
- 2014, c. 20, s. 210
- 2016, c. 7, s. 157
Marginal note:Benchmarks — regulations
Definition of benchmark
(2) In this section, benchmark means a price, estimate, rate, index or value that is
(a) determined from time to time by reference to an assessment of one or more underlying interests;
(b) made available to the public, either free of charge or on payment; and
(c) used for reference for any purpose, including
- 2014, c. 20, s. 210
Marginal note:Restriction on insurance business
Marginal note:Restriction on acting as agent
(2) A bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space in any branch in Canada of the bank to any person engaged in the placing of insurance.
(3) The Governor in Council may make regulations respecting the matters referred to in subsection (1) and regulations respecting relations between banks and
(4) Nothing in this section precludes a bank from
(5) [Repealed, 1997, c. 15, s. 45]
Definition of business of insurance
(6) In this section, business of insurance includes
(a) the issuance of any annuity if the liability in respect of the annuity is contingent on the death of a person; and
(b) the issuance of any debt obligation, any of whose terms and conditions are established on the basis of mortality considerations, under which the issuer is obliged to make periodic payments.
- 1991, c. 46, s. 416
- 1997, c. 15, s. 45
- 2012, c. 19, s. 206
Marginal note:Restriction on leasing
417 A bank shall not engage in Canada in any personal property leasing activity in which a financial leasing entity, as defined in subsection 464(1), is not permitted to engage.
- 1991, c. 46, s. 417
- 2001, c. 9, s. 106
Marginal note:Restriction on residential mortgages
418 (1) A bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.
(2) Subsection (1) does not apply in respect of
(a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the bank may make a loan is established;
(b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;
(c) the acquisition by the bank from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the bank to the entity against the issue of such securities; or
(d) a loan secured by a mortgage where
- 1991, c. 46, s. 418
- 1997, c. 15, s. 46
- 2007, c. 6, s. 27
- Date modified: