Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

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 IXInvestments (continued)

Exceptions and Exclusions (continued)

Marginal note:Realizations

  •  (1) Despite anything in this Act, a bank may acquire

    • (a) an investment in a body corporate,

    • (b) an interest in an unincorporated entity, or

    • (c) an interest in real property

    if the investment or interest is acquired through the realization of a security interest held by the bank or any of its subsidiaries.

  • Marginal note:Disposition

    (2) Subject to subsection 73(2), if a bank acquires control of, or acquires a substantial investment in, an entity by way of the realization of a security interest held by the bank or any of its subsidiaries, the bank shall, within five years after the day on which control or the substantial investment is acquired, do all things necessary, or cause its subsidiary to do all things necessary, as the case may be, to ensure that the bank no longer controls the entity or has a substantial investment in the entity.

  • Marginal note:Transitional

    (3) Despite subsection (2), if a bank that was in existence immediately before June 1, 1992 had an investment in an entity on September 27, 1990 that is a substantial investment within the meaning of section 10 and the bank later increases that substantial investment by way of a realization of a security interest under subsection (1), the bank shall, within five years after increasing the substantial investment, do all things necessary to ensure that its substantial investment in the entity is no greater than it was on September 27, 1990.

  • Marginal note:Extension

    (4) The Superintendent may, in the case of any particular bank that makes an application under this subsection, extend the period referred to in subsection (2) or (3) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

  • Marginal note:Exception

    (5) If, under subsection (1), a bank acquires control of, or acquires or increases a substantial investment in, an entity that it would otherwise be permitted to acquire or increase under section 468, the bank may retain control of the entity or continue to hold the substantial investment for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (2) or (3), including any extension of it granted under subsection (4).

  • 1991, c. 46, s. 473
  • 1997, c. 15, s. 60
  • 2001, c. 9, s. 127

Marginal note:Regulations restricting ownership

 The Governor in Council may make regulations

  • (a) for the purposes of subsection 468(4), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which that subsection does not apply or the banks or other entities in respect of which that subsection does not apply, including prescribing banks or other entities on the basis of the activities they engage in;

  • (b) for the purposes of subsection 468(5) or (6), permitting the acquisition of control or the acquisition or increase of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the banks or other entities in respect of which either of those subsections does not apply, including prescribing banks or other entities on the basis of the activities they engage in;

  • (c) for the purposes of subsection 468(11), permitting a bank to give up control of an entity; and

  • (d) restricting the ownership by a bank of shares of a body corporate or of ownership interests in an unincorporated entity under sections 468 to 473 and imposing terms and conditions applicable to banks that own such shares or interests.

  • 1991, c. 46, s. 474
  • 1997, c. 15, s. 61
  • 2001, c. 9, s. 127

Portfolio Limits

Marginal note:Exclusion from portfolio limits

  •  (1) Subject to subsection (3), the value of all loans, investments and interests acquired by a bank and any of its prescribed subsidiaries under section 472 or as a result of a realization of a security interest is not to be included in calculating the value of loans, investments and interests of the bank and its prescribed subsidiaries under sections 476 to 478

    • (a) for a period of twelve years following the day on which the interest was acquired, in the case of an interest in real property; and

    • (b) for a period of five years after the day on which the loan, investment or interest was acquired, in the case of a loan, investment or interest, other than an interest in real property.

  • Marginal note:Extension

    (2) The Superintendent may, in the case of any particular bank, extend any period referred to in subsection (1) for any further period or periods, and on any terms and conditions, that the Superintendent considers necessary.

  • Marginal note:Exception

    (3) Subsection (1) does not apply to an investment or interest described in that subsection if the investment or interest is defined by a regulation made under section 479 to be an interest in real property and

    • (a) the bank or the subsidiary acquired the investment or interest as a result of the realization of a security interest securing a loan that was defined by a regulation made under section 479 to be an interest in real property; or

    • (b) the bank or the subsidiary acquired the investment or interest under section 472 as a result of a default referred to in that section in respect of a loan that was defined by a regulation made under section 479 to be an interest in real property.

  • 1991, c. 46, s. 475
  • 1997, c. 15, s. 62
  • 2001, c. 9, s. 127

Real Property

Marginal note:Limit on total property interest

 A bank shall not, and shall not permit its prescribed subsidiaries to, purchase or otherwise acquire an interest in real property or make an improvement to any real property in which the bank or any of its prescribed subsidiaries has an interest if the aggregate value of all interests of the bank in real property exceeds, or the acquisition of the interest or the making of the improvement would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank.

  • 1991, c. 46, s. 476
  • 2001, c. 9, s. 127

Equities

Marginal note:Limits on equity acquisitions

 A bank shall not, and shall not permit its prescribed subsidiaries to,

  • (a) purchase or otherwise acquire any participating shares of any body corporate or any ownership interests in any unincorporated entity, other than those of a permitted entity in which the bank has, or by virtue of the acquisition would have, a substantial investment, or

  • (b) acquire control of an entity that holds shares or ownership interests referred to in paragraph (a),

if the aggregate value of

  • (c) all participating shares, excluding participating shares of permitted entities in which the bank has a substantial investment, and

  • (d) all ownership interests in unincorporated entities, other than ownership interests in permitted entities in which the bank has a substantial investment,

beneficially owned by the bank and its prescribed subsidiaries, exceeds, or the purchase or acquisition would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank.

  • 1991, c. 46, s. 477
  • 2001, c. 9, s. 127

Aggregate Limit

Marginal note:Aggregate limit

 A bank shall not, and shall not permit its prescribed subsidiaries to,

  • (a) purchase or otherwise acquire

    • (i) participating shares of a body corporate, other than those of a permitted entity in which the bank has, or by virtue of the acquisition would have, a substantial investment,

    • (ii) ownership interests in an unincorporated entity, other than ownership interests in a permitted entity in which the bank has, or by virtue of the acquisition would have, a substantial investment, or

    • (iii) interests in real property, or

  • (b) make an improvement to real property in which the bank or any of its prescribed subsidiaries has an interest

if the aggregate value of

  • (c) all participating shares and ownership interests referred to in subparagraphs (a)(i) and (ii) that are beneficially owned by the bank and its prescribed subsidiaries, and

  • (d) all interests of the bank in real property referred to in subparagraph (a)(iii)

exceeds, or the acquisition or the making of the improvement would cause that aggregate value to exceed, the prescribed percentage of the regulatory capital of the bank.

  • 1991, c. 46, s. 478
  • 1997, c. 15, s. 63
  • 2001, c. 9, s. 127

Miscellaneous

Marginal note:Regulations

 For the purposes of this Part, the Governor in Council may make regulations

  • (a) defining the interests of a bank in real property;

  • (b) determining the method of valuing those interests; or

  • (c) exempting classes of banks from the application of sections 475 to 478.

  • 1991, c. 46, s. 479
  • 1997, c. 15, s. 64
  • 2001, c. 9, s. 127
 
Date modified: