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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 IXInvestments (continued)

Miscellaneous (continued)

Marginal note:Transitional

 Nothing in this Part requires

  • (a) the termination of a loan made before February 7, 2001;

  • (b) the termination of a loan made after that date as a result of a commitment made before that date;

  • (c) the disposal of an investment made before that date; or

  • (d) the disposal of an investment made after that date as a result of a commitment made before that date.

But if the loan or investment would be precluded or limited by this Part, the amount of the loan or investment may not, except as provided in subsections 471(2), 472(3) and 473(3), be increased after that date.

  • 1991, c. 46, s. 483
  • 2001, c. 9, s. 127

Marginal note:Saving

 A loan or investment referred to in section 483 is deemed not to be prohibited by the provisions of this Part.

  • 1991, c. 46, s. 484
  • 2001, c. 9, s. 127

PART XCapital, Liquidity and Capacity to Absorb Losses

Marginal note:Domestic systemically important bank

  •  (1) The Superintendent may, by order, designate a bank as a domestic systemically important bank unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so.

  • Marginal note:Revocation

    (2) The Superintendent may, by order, revoke the designation unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so.

  • Marginal note:Factors

    (3) In making the designation or revoking it, the Superintendent shall take into account all factors that he or she considers relevant, including whether the distress or failure of the bank could have a significant adverse impact on the financial system in Canada.

  • Marginal note:Notice and publication

    (4) If a designation is made or revoked, the Superintendent shall, as soon as feasible, cause a notice of the designation or revocation, as the case may be, to be published in the Canada Gazette and on the website of the Office of the Superintendent of Financial Institutions.

  • 2016, c. 7, s. 159

Marginal note:Adequacy of capital and liquidity

  •  (1) A bank shall, in relation to its operations, maintain

    • (a) adequate capital, and

    • (b) adequate and appropriate forms of liquidity,

    and shall comply with any regulations in relation thereto.

  • Marginal note:Domestic systemically important banks

    (1.1) If the bank is a domestic systemically important bank, it shall also maintain the minimum capacity to absorb losses that is provided for under subsection (1.2) and shall comply with any regulations in relation to that requirement.

  • Marginal note:Superintendent’s order

    (1.2) For each domestic systemically important bank, the Superintendent shall, by order made after consulting with the other members of the committee established under subsection 18(1) of the Office of the Superintendent of Financial Institutions Act, provide for the amount that constitutes the bank’s minimum capacity to absorb losses.

  • Marginal note:Amount — subsection (1.2)

    (1.21) The amount set under subsection (1.2) consists of capital, prescribed shares and prescribed liabilities, which have the value determined in accordance with any criteria the Superintendent considers appropriate.

  • Marginal note:Public interest

    (1.3) Despite subsection (1.2), if, before the order is made, the Minister advises the Superintendent that the Minister is of the opinion that the amount provided for by the Superintendent is not in the public interest, the Superintendent shall provide for another amount in accordance with that subsection.

  • Marginal note:Notice and publication

    (1.4) If an order is made under subsection (1.2), the Superintendent shall, in writing and without delay, inform the bank that is subject to the order and shall, as soon as feasible, cause the order to be published in the Canada Gazette and on the website of the Office of the Superintendent of Financial Institutions.

  • Marginal note:Regulations and guidelines

    (2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by banks of adequate capital and adequate and appropriate forms of liquidity and the maintenance by domestic systemically important banks of the minimum capacity to absorb losses.

  • Marginal note:Directives

    (3) Notwithstanding that a bank is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the bank

    • (a) to increase its capital; or

    • (b) to provide additional liquidity in such forms and amounts as the Superintendent may require.

  • Marginal note:Orders to limit or prohibit

    (3.1) If the Superintendent becomes aware that a domestic systemically important bank is not maintaining its minimum capacity to absorb losses, the Superintendent shall notify the other members of the committee established under subsection 18(1) of the Office of the Superintendent of Financial Institutions Act and may, by order, take any measures that he or she considers appropriate, including

    • (a) limiting the growth of the bank’s total assets;

    • (b) limiting or prohibiting acquisitions of assets by the bank;

    • (c) limiting or prohibiting discretionary payments in respect of the bank’s shares or subordinated indebtedness;

    • (d) limiting or prohibiting purchases by the bank, or redemptions, of the bank’s shares, subordinated indebtedness or prescribed liabilities;

    • (e) limiting or prohibiting reductions of the bank’s stated capital; and

    • (f) limiting or prohibiting the opening of new branches by the bank.

  • Marginal note:Consultation

    (3.2) Before making an order under subsection (3.1) or varying or revoking such an order, the Superintendent shall consult with the other members of the committee established under subsection 18(1) of the Office of the Superintendent of Financial Institutions Act.

  • Marginal note:Compliance

    (4) A bank shall comply with an order made under subsection (3) or (3.1) within the time that is specified in the order.

  • Marginal note:Notice of value

    (5) Where an appraisal of any asset held by a bank or any of its subsidiaries has been made by the Superintendent and the value determined by the Superintendent to be the appropriate value of the asset varies materially from the value placed by the bank or subsidiary on the asset, the Superintendent shall send to the bank, the auditor or auditors of the bank and the audit committee of the bank a written notice of the appropriate value of the asset as determined by the Superintendent.

  • 1991, c. 46, s. 485
  • 1996, c. 6, s. 7
  • 2016, c. 7, s. 160
  • 2017, c. 20, s. 111

Marginal note:Prescribed conditions

 The Governor in Council may make regulations respecting the conditions that domestic systemically important banks must meet in issuing, originating or amending prescribed shares or liabilities.

  • 2016, c. 7, s. 161

Marginal note:Regulations and guidelines — disclosure of information

 The Governor in Council may make regulations and the Superintendent may make guidelines respecting the disclosure by domestic systemically important banks of information in relation to their capacity to absorb losses.

  • 2016, c. 7, s. 162

PART XISelf-dealing

Interpretation and Application

Definition of senior officer

 For the purposes of this Part, a senior officer of a body corporate is a person who is

  • (a) a director of the body corporate who is a full-time employee of the body corporate;

  • (b) the chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary of the body corporate;

  • (c) a natural person who performs functions for the body corporate similar to those performed by a person referred to in paragraph (b);

  • (d) the head of the strategic planning unit of the body corporate;

  • (e) the head of the unit of the body corporate that provides legal services or human resources services to the body corporate; or

  • (f) any other officer reporting directly to the body corporate’s board of directors, chief executive officer or chief operating officer.

  • 1997, c. 15, s. 67
 
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