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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 XVBank Holding Companies (continued)

DIVISION 6Corporate Governance (continued)

Fundamental Changes (continued)

Marginal note:Shareholder approval

  •  (1) The directors of each applicant shall submit an amalgamation agreement for approval to a meeting of the holders of shares of the applicant body corporate of which they are directors and, subject to subsection (3), to the holders of each class or series of such shares.

  • Marginal note:Right to vote

    (2) Each share of an applicant carries the right to vote in respect of an amalgamation agreement whether or not it otherwise carries the right to vote.

  • Marginal note:Separate vote for class or series

    (3) The holders of shares of a class or series of shares of each applicant are entitled to vote separately as a class or series in respect of an amalgamation agreement if the agreement contains a provision that, if it were contained in a proposed amendment to the by-laws or incorporating instrument of the applicant, would entitle those holders to vote separately as a class or series.

  • Marginal note:Special resolution

    (4) Subject to subsection (3), an amalgamation agreement is approved when the shareholders of each applicant that is a body corporate have approved the amalgamation by special resolution.

  • Marginal note:Termination

    (5) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant notwithstanding that the agreement has been approved by the shareholders of all or any of the applicant bodies corporate.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 118

Marginal note:Vertical short-form amalgamation

  •  (1) A bank holding company may, without complying with sections 804 to 806, amalgamate with one or more bodies corporate that are incorporated by or under an Act of Parliament if the body or bodies corporate, as the case may be, are wholly-owned subsidiaries of the bank holding company and

    • (a) the amalgamation is approved by a resolution of the directors of the bank holding company and of each amalgamating subsidiary; and

    • (b) the resolutions provide that

      • (i) the shares of each amalgamating subsidiary will be cancelled without any repayment of capital in respect thereof,

      • (ii) the letters patent of amalgamation and the by-laws of the amalgamated bank holding company will be the same as the incorporating instrument and the by-laws of the amalgamating bank holding company that is the holding body corporate, and

      • (iii) no securities will be issued by the amalgamated bank holding company in connection with the amalgamation.

  • Marginal note:Horizontal short-form amalgamation

    (2) Two or more bodies corporate incorporated by or under an Act of Parliament may amalgamate and continue as one bank holding company without complying with sections 804 to 806 if

    • (a) at least one of the applicants is a bank holding company;

    • (b) the applicants are all wholly-owned subsidiaries of the same holding body corporate;

    • (c) the amalgamation is approved by a resolution of the directors of each of the applicants; and

    • (d) the resolutions provide that

      • (i) the shares of all applicants, except those of one of the applicants that is a bank holding company, will be cancelled without any repayment of capital in respect thereof,

      • (ii) the letters patent of amalgamation and the by-laws of the amalgamated bank holding company will be the same as the incorporating instrument and the by-laws of the amalgamating bank holding company whose shares are not cancelled, and

      • (iii) the stated capital of the amalgamating bank holding companies and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating bank holding company whose shares are not cancelled.

  • 2001, c. 9, s. 183

Marginal note:Joint application to Minister

  •  (1) Subject to subsection (2), unless an amalgamation agreement is terminated in accordance with subsection 806(5), the applicants shall, within three months after the approval of the agreement in accordance with subsection 806(4) or the approval of the directors in accordance with subsection 807(1) or (2), jointly apply to the Minister for letters patent of amalgamation continuing the applicants as one bank holding company.

  • Marginal note:Conditions precedent to application

    (2) No application for the issue of letters patent under subsection (1) may be made unless

    • (a) notice of intention to make such an application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of each applicant is situated; and

    • (b) the application is supported by satisfactory evidence that the applicants have complied with the requirements of this Part relating to amalgamations.

  • Marginal note:Application of sections 672 to 674

    (3) If two or more bodies corporate, none of which is a bank holding company, apply for letters patent under subsection (1), sections 672 to 674 apply in respect of the application with any modifications that the circumstances require.

  • Marginal note:Matters for consideration

    (4) Before issuing letters patent of amalgamation continuing the applicants as one bank holding company, the Minister shall take into account all matters that the Minister considers relevant to the application, including

    • (a) the sources of continuing financial support for any bank that will be a subsidiary of the amalgamated bank holding company;

    • (b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of any bank that will be a subsidiary of the amalgamated bank holding company;

    • (c) the business record and experience of the applicants;

    • (d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;

    • (e) whether the amalgamated bank holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

    • (f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;

    • (g) the opinion of the Superintendent regarding the extent to which the proposed corporate structure of the amalgamated bank holding company and its affiliates may affect the supervision and regulation of any bank that will be its subsidiary, having regard to

      • (i) the nature and extent of the proposed financial services activities to be carried out by the affiliates of the amalgamated bank holding company, and

      • (ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the amalgamated bank holding company; and

    • (h) the best interests of the financial system in Canada.

  • 2001, c. 9, s. 183

Marginal note:Issue of letters patent

  •  (1) Where an application has been made to the Minister in accordance with section 808, the Minister may issue letters patent of amalgamation continuing the applicants as one bank holding company.

  • Marginal note:Letters patent

    (2) Where letters patent are issued pursuant to this section, section 676 applies with such modifications as the circumstances require in respect of the issue of the letters patent.

  • Marginal note:Publication of notice

    (3) The Superintendent shall cause to be published in the Canada Gazette notice of the issuance of letters patent pursuant to subsection (1).

  • 2001, c. 9, s. 183

Marginal note:Court enforcement

  •  (1) If a bank holding company or any director, officer, employee or agent of a bank holding company is contravening or has failed to comply with any term or condition made in respect of the issuance of letters patent of amalgamation, the Minister may, in addition to any other action that may be taken under this Act, apply to a court for an order directing the bank holding company or the director, officer, employee or agent to comply with the term or condition, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit.

  • Marginal note:Appeal

    (2) 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.

  • 2001, c. 9, s. 183

Marginal note:Effect of letters patent

  •  (1) On the day provided for in the letters patent issued under section 809,

    • (a) the amalgamation of the applicants and their continuance as one bank holding company becomes effective;

    • (b) the property of each applicant continues to be the property of the amalgamated bank holding company;

    • (c) the amalgamated bank holding company continues to be liable for the obligations of each applicant;

    • (d) any existing cause of action, claim or liability to prosecution is unaffected;

    • (e) any civil, criminal or administrative action or proceeding pending by or against an applicant may be continued to be prosecuted by or against the amalgamated bank holding company;

    • (f) any conviction against, or ruling, order or judgment in favour of or against, an applicant may be enforced by or against the amalgamated bank holding company;

    • (g) if any director or officer of an applicant continues as a director or officer of the amalgamated bank holding company, any disclosure by that director or officer of a material interest in any contract made to the applicant shall be deemed to be disclosure to the amalgamated bank holding company; and

    • (h) the letters patent of amalgamation are the incorporating instrument of the amalgamated bank holding company.

  • Marginal note:Minutes

    (2) Any deemed disclosure under paragraph (1)(g) shall be recorded in the minutes of the first meeting of directors of the amalgamated bank holding company.

  • 2001, c. 9, s. 183

Marginal note:Transitional

  •  (1) Despite any other provision of this Act or the regulations, the Minister may, by order, on the recommendation of the Superintendent, grant to a bank holding company in respect of which letters patent were issued under subsection 809(1) permission to

    • (a) engage in a business activity specified in the order that a bank holding company is not otherwise permitted by this Act to engage in and that one or more of the amalgamating bodies corporate was engaging in at the time application for the letters patent was made;

    • (b) continue to have issued and outstanding debt obligations the issue of which is not authorized by this Act if the debt obligations were outstanding at the time the application for the letters patent was made;

    • (c) hold assets that a bank holding company is not otherwise permitted by this Act to hold if the assets were held by one or more of the amalgamating bodies corporate at the time the application for the letters patent was made;

    • (d) acquire and hold assets that a bank holding company is not otherwise permitted by this Act to acquire or hold if one or more of the amalgamating bodies corporate were obliged, at the time the application for the letters patent was made, to acquire those assets; and

    • (e) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

  • Marginal note:Duration of exceptions

    (2) The permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding

    • (a) with respect to any matter described in paragraph (1)(a), thirty days after the date of issue of the letters patent or, where the activity is conducted pursuant to an agreement existing on the date of issue of the letters patent, the expiration of the agreement;

    • (b) with respect to any matter described in paragraph (1)(b), ten years; and

    • (c) with respect to any matter described in any of paragraphs (1)(c) to (e), two years.

  • Marginal note:Renewal

    (3) Subject to subsection (4), the Minister may, by order on the recommendation of the Superintendent, renew a permission granted by order under subsection (1) with respect to any matter described in any of paragraphs (1)(b) to (d) for any further period or periods that the Minister considers necessary.

  • Marginal note:Limitation

    (4) The Minister shall not grant to a bank holding company any permission

    • (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the effective date of the letters patent of amalgamation, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the bank holding company that the bank holding company will not be able at law to redeem at the end of the ten years the outstanding debt obligations to which the permission relates; and

    • (b) with respect to matters described in paragraphs (1)(c) and (d), that purports to be effective more than ten years after the effective date of the letters patent.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 116
Transfer of Business

Marginal note:Shareholder approval

  •  (1) A sale, lease or exchange of all or substantially all the property of a bank holding company requires the approval of the shareholders in accordance with subsections (2) to (7).

  • Marginal note:Notice of meeting

    (2) A notice of a meeting of shareholders complying with sections 727 and 730 shall be sent in accordance with those sections to each shareholder and shall include or be accompanied by a copy or summary of the agreement of sale, lease or exchange.

  • Marginal note:Shareholder approval

    (3) At the meeting referred to in the notice, the shareholders may authorize the sale, lease or exchange and may fix or authorize the directors to fix any of the sale’s, lease’s or exchange’s terms and conditions.

  • Marginal note:Right to vote

    (4) Each share of the bank holding company carries the right to vote in respect of the proposal whether or not the share otherwise carries the right to vote.

  • Marginal note:Class vote

    (5) The holders of shares of a class or series of shares of the bank holding company are entitled to vote separately as a class or series in respect of the proposal if the shares of the class or series are affected by the proposed transaction in a manner different from the shares of another class or series.

  • Marginal note:Special resolution

    (6) For the purpose of subsection (1), the proposal is not approved unless the holders of the shares of each class or series of shares entitled to vote separately on the proposal have approved the proposal by special resolution.

  • Marginal note:Abandoning transaction

    (7) Where a special resolution under subsection (6) approving a proposed transaction so states, the directors of a bank holding company may, subject to the rights of third parties, abandon the transaction without further approval of the shareholders.

  • 2001, c. 9, s. 183

Corporate Records

Head Office and Corporate Records

Marginal note:Head office

  •  (1) A bank holding company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

  • Marginal note:Change of head office

    (2) The directors of a bank holding company may change the address of the head office within the province specified in the incorporating instrument or by-laws.

  • Marginal note:Notice of change of address

    (3) A bank holding company shall send to the Superintendent, within fifteen days after any change of address of its head office, a notice of the change of address.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 119
 
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