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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2021-11-17 and last amended on 2021-06-30. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 6Corporate Governance (continued)

Financial Statements and Auditor (continued)

Marginal note:Auditor’s report

  •  (1) The auditor shall, not less than twenty-one days before the date of the annual meeting of the shareholders of the bank holding company, make a report in writing to the shareholders on the annual statement referred to in subsection 840(1).

  • Marginal note:Audit for shareholders

    (2) In each report required under subsection (1), the auditor shall state whether, in the opinion of the auditor, the annual statement presents fairly, in accordance with the accounting principles referred to in subsection 840(4), the financial position of the bank holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the bank holding company for that financial year.

  • Marginal note:Auditor’s remarks

    (3) In each report referred to in subsection (2), the auditor shall include such remarks as the auditor considers necessary when

    • (a) the examination has not been made in accordance with the auditing standards referred to in subsection 855(2);

    • (b) the annual statement has not been prepared on a basis consistent with that of the preceding financial year; or

    • (c) the annual statement does not present fairly, in accordance with the accounting principles referred to in subsection 840(4), the financial position of the bank holding company as at the end of the financial year to which it relates or the results of the operations or changes in the financial position of the bank holding company for that financial year.

  • 2001, c. 9, s. 183

Marginal note:Report on directors’ statement

  •  (1) The auditor of a bank holding company shall, if required by the shareholders, audit and report to the shareholders on any financial statement submitted by the directors to the shareholders, and the report shall state whether, in the opinion of the auditor, the financial statement presents fairly the information required by the shareholders.

  • Marginal note:Making of report

    (2) A report of the auditor made under subsection (1) shall be attached to the financial statement to which it relates and a copy of the statement and report shall be sent by the directors to every shareholder and to the Superintendent.

  • 2001, c. 9, s. 183

Marginal note:Auditor of subsidiaries

  •  (1) A bank holding company shall take all necessary steps to ensure that

    • (a) its auditor is the auditor of each of its subsidiaries; and

    • (b) in the case of a subsidiary with more than one auditor, the auditor of the bank holding company is one of the subsidiary’s auditors.

  • Marginal note:Subsidiary outside Canada

    (2) Subsection (1) applies in the case of a subsidiary that carries on its operations in a country other than Canada unless the laws of that country do not permit the appointment of an auditor of the bank holding company as the auditor of that subsidiary.

  • Marginal note:Exception

    (3) Subsection (1) does not apply in respect of any particular subsidiary where the bank holding company, after having consulted its auditor, is of the opinion that the total assets of the subsidiary are not a material part of the total assets of the bank holding company.

  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 131

Marginal note:Auditor’s attendance

  •  (1) The auditor of a bank holding company is entitled to receive notice of every meeting of the audit committee of the bank holding company and, at the expense of the bank holding company, to attend and be heard at that meeting.

  • Marginal note:Attendance

    (2) If so requested by a member of the audit committee, the auditor shall attend every meeting of the audit committee held during the member’s term of office.

  • 2001, c. 9, s. 183

Marginal note:Calling meeting

  •  (1) The auditor of a bank holding company or a member of the audit committee may call a meeting of the audit committee.

  • Marginal note:Right to interview

    (2) The chief internal auditor of a bank holding company or any officer or employee of the bank holding company acting in a similar capacity shall, at the request of the auditor of the bank holding company and on receipt of reasonable notice, meet with the auditor.

  • 2001, c. 9, s. 183

Marginal note:Notice of errors

  •  (1) A director or an officer of a bank holding company shall forthwith notify the audit committee and the auditor of the bank holding company of any error or misstatement of which the director or officer becomes aware in an annual statement or other financial statement on which the auditor or any former auditor has reported.

  • Marginal note:Error noted by auditor

    (2) If the auditor or former auditor of a bank holding company is notified or becomes aware of an error or misstatement in an annual statement or other financial statement on which the auditor reported and in the opinion of the auditor the error or misstatement is material, the auditor or former auditor shall inform each director of the bank holding company accordingly.

  • Marginal note:Duty of directors

    (3) When under subsection (2) the auditor or former auditor of a bank holding company informs the directors of an error or misstatement in an annual statement or other financial statement, the directors shall

    • (a) prepare and issue a revised annual statement or financial statement; or

    • (b) otherwise inform the shareholders and the Superintendent of the error or misstatement.

  • 2001, c. 9, s. 183

Marginal note:Qualified privilege for statements

 Any oral or written statement or report made under this Part by the auditor or former auditor of a bank holding company has qualified privilege.

  • 2001, c. 9, s. 183
Remedial Actions

Marginal note:Sections 334 to 338 apply

 Sections 334 to 338 apply in respect of bank holding companies, subject to the following:

  • (a) references to “bank” in those sections are to be read as references to “bank holding company”; and

  • (b) references to “this Act” in those sections are to be read as references to “this Part”.

  • 2001, c. 9, s. 183
Liquidation and Dissolution

Definition of court

 For the purposes of subsections 346(1) and 347(1) and (2), sections 348 to 352, subsection 353(1), sections 355 and 357 to 359, subsections 363(3) and (4) and section 368, court means a court having jurisdiction in the place where the bank holding company has its head office.

  • 2001, c. 9, s. 183

Marginal note:Non-application of certain provisions

  •  (1) Subsection (2) and sections 342 to 365, 368 and 868 do not apply to a bank holding company that is an insolvent person or a bankrupt as those terms are defined in subsection 2(1) of the Bankruptcy and Insolvency Act.

  • Marginal note:Staying proceedings on insolvency

    (2) Any proceedings taken under this Division to dissolve or to liquidate and dissolve a bank holding company shall be stayed if the bank holding company is at any time found, in a proceeding under the Bankruptcy and Insolvency Act, to be an insolvent person as defined in subsection 2(1) of that Act.

  • Marginal note:Winding-up and Restructuring Act does not apply

    (3) The Winding-up and Restructuring Act does not apply to a bank holding company.

  • 2001, c. 9, s. 183

Marginal note:Returns to Superintendent

 A liquidator appointed under this Division to wind up the business of a bank holding company shall provide the Superintendent with such information relating to the business and affairs of the bank holding company in such form as the Superintendent requires.

  • 2001, c. 9, s. 183
Simple Liquidation

Marginal note:Sections 342 to 346 apply

 Sections 342 to 346 apply in respect of bank holding companies, subject to the following:

  • (a) references to “bank” in those sections are to be read as references to “bank holding company”; and

  • (b) the reference to “sections 143 and 144” in subsection 343(1) is to be read as a reference to “sections 732 and 733”.

  • 2001, c. 9, s. 183
Court-supervised Liquidation

Marginal note:Sections 347 to 360 apply

 Sections 347 to 360 apply in respect of bank holding companies, subject to the following:

  • (a) references to “bank” in those sections are to be read as references to “bank holding company”;

  • (b) the reference to “subsection 308(1)” in subsection 353(1) is to be read as a reference to “subsection 840(1)”; and

  • (c) paragraph 354(a) is to be read without reference to “or auditors”.

  • 2001, c. 9, s. 183
General

Marginal note:Sections 361 to 365 and 368 apply

 Sections 361 to 365 and 368 apply in respect of bank holding companies, subject to the following:

  • (a) references to “bank” in those sections are to be read as references to “bank holding company”;

  • (b) references to “this Part” in those sections are to be read as references to “this Division”;

  • (c) the reference to “section 632” in subsection 362(2) is to be read as a reference to “section 951”;

  • (d) the reference to “section 366” in section 364 is to be read as a reference to “section 872”; and

  • (e) the reference to “sections 366 and 367” in section 365 is to be read as a reference to “section 872”.

  • 2001, c. 9, s. 183

Marginal note:Unknown claimants

  •  (1) On the dissolution of a bank holding company under this Act, the portion of the property distributable to a creditor or shareholder who cannot be found shall be converted into money and paid to the Receiver General.

  • Marginal note:Constructive satisfaction

    (2) A payment under subsection (1) is deemed to be in satisfaction of a debt or claim of such creditor or shareholder.

  • Marginal note:Recovery

    (3) If at any time a person establishes that he or she is entitled to any moneys paid to the Receiver General under this Act, the Receiver General shall pay an equivalent amount to him or her out of the Consolidated Revenue Fund.

  • 2001, c. 9, s. 183

DIVISION 7Ownership

Constraints on Ownership

Marginal note:Sections 370 to 371.1 apply

 Sections 370 to 371.1 apply in respect of bank holding companies, except that references to “bank” in sections 371 and 371.1 are to be read as references to “bank holding company”.

  • 2001, c. 9, s. 183
  • 2012, c. 19, s. 336

Marginal note:Significant interest

 Except as permitted by this Division, no person shall have a significant interest in any class of shares of a bank holding company.

  • 2001, c. 9, s. 183

Marginal note:Acquisition of significant interest

  •  (1) Subject to section 876, no person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share of a bank holding company or purchase or otherwise acquire control of any entity that holds any share of a bank holding company if

    • (a) the acquisition would cause the person to have a significant interest in any class of shares of the bank holding company; or

    • (b) if the person has a significant interest in a class of shares of the bank holding company, the acquisition would increase the significant interest of the person in that class of shares.

  • Marginal note:Amalgamation, etc., constitutes acquisition

    (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares of a bank holding company, the entity is deemed to be acquiring a significant interest in that class of shares of the bank holding company through an acquisition for which the approval of the Minister is required under subsection (1).

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 118

Marginal note:Limitations on share holdings

  •  (1) No person may be a major shareholder of a bank holding company with equity of twelve billion dollars or more.

  • Marginal note:Exception — widely held bank

    (2) Subsection (1) does not apply to a widely held bank that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company with equity of twelve billion dollars or more if it controlled, within the meaning of those paragraphs, the bank holding company on the day the bank holding company’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank holding company since that day.

  • Marginal note:Exception — widely held bank holding company

    (3) Subsection (1) does not apply to a widely held bank holding company that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company with equity of twelve billion dollars or more if the widely held bank holding company controlled, within the meaning of those paragraphs, the bank holding company on the day the bank holding company’s equity reached twelve billion dollars and the widely held bank holding company has controlled, within the meaning of those paragraphs, the bank holding company since that day.

  • Marginal note:Exception — insurance holding companies and certain institutions

    (4) Subsection (1) does not apply to any of the following that controls, within the meaning of paragraph 3(1)(d), the bank holding company with equity of twelve billion dollars or more if it controlled, within the meaning of that paragraph, the bank holding company on the day the bank holding company’s equity reached twelve billion dollars and it has controlled, within the meaning of that paragraph, the bank holding company since that day:

    • (a) a widely held insurance holding company;

    • (b) an eligible Canadian financial institution, other than a bank; or

    • (c) an eligible foreign institution.

  • Marginal note:Exception — other entities

    (5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company with equity of twelve billion dollars or more if the entity is controlled, within the meaning of those paragraphs, by a widely held bank to which subsection (2) applies, or a widely held bank holding company to which subsection (3) applies, that controls the bank holding company.

  • Marginal note:Exception — other entities

    (6) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the bank holding company with equity of twelve billion dollars or more if the entity is controlled, within the meaning of that paragraph, by

    • (a) a widely held insurance holding company to which subsection (4) applies that controls the bank holding company;

    • (b) an eligible Canadian financial institution, other than a bank, to which subsection (4) applies that controls the bank holding company; or

    • (c) an eligible foreign institution to which subsection (4) applies that controls the bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 81
 
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