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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2022-09-22 and last amended on 2022-06-30. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 7Ownership (continued)

Constraints on Ownership (continued)

Marginal note:Prohibition against significant interest

 No person who has a significant interest in any class of shares of a widely held bank holding company with equity of twelve billion dollars or more may have a significant interest in any class of shares of a subsidiary of the widely held bank holding company that is a bank or a bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 86

Marginal note:Prohibition against significant interest

 No person who has a significant interest in any class of shares of a bank holding company may have a significant interest in any class of shares of any widely held bank with equity of twelve billion dollars or more, or of any widely held bank holding company with equity of twelve billion dollars or more, that controls the bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 86

Marginal note:Prohibition against control

  •  (1) No person shall control, within the meaning of paragraph 3(1)(d), a bank holding company with equity of twelve billion dollars or more.

  • Marginal note:Exception — widely held bank

    (2) Subsection (1) does not apply if any of subsections 876(2) to (6) applies in respect of the person in respect of the bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 87

Marginal note:Restriction on control

  •  (1) No person shall, without the approval of the Minister, acquire control, within the meaning of paragraph 3(1)(d), of a bank holding company with equity of less than twelve billion dollars.

  • Marginal note:Amalgamation, etc., constitutes acquisition

    (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), a bank holding company with equity of less than twelve billion dollars, the entity is deemed to be acquiring control, within the meaning of that paragraph, 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. 119
  • 2012, c. 5, s. 88

Marginal note:Deeming

 A bank holding company with equity of less than twelve billion dollars that controls a bank to which subsection 378(1) applies is deemed, for the purposes of sections 156.09, 727, 876, 879, 879.1, 880, 881, 882, 888 and 890, subsection 891(2), section 893 and subsection 906(2), to be a bank holding company with equity of twelve billion dollars or more.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 88

Marginal note:Prohibition

 No person may control or be a major shareholder of a bank holding company if the person or an entity affiliated with the person

  • (a) has control of or has a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in; or

  • (b) engages in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in.

  • 2001, c. 9, s. 183

Marginal note:Prohibition

 No person who controls a bank holding company or who is a major shareholder of a bank holding company, and no entity affiliated with that person, may

  • (a) control or have a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in; or

  • (b) engage in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in.

  • 2001, c. 9, s. 183

Marginal note:Constraint on registration

 No bank holding company shall, unless the acquisition of the share has been approved by the Minister, record in its securities register a transfer or issue of any share of the bank holding company to any person or to any entity controlled by a person if

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

  • (b) where the person has a significant interest in a class of shares of the bank holding company, the transfer or issue of the share would increase the significant interest of the person in that class of shares.

  • 2001, c. 9, s. 183

Marginal note:Exemption

 On application by a bank holding company, other than a bank holding company with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank holding company the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank holding company from the application of sections 875 and 887.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 89

Marginal note:Exception — small holdings

 Despite section 887, if, as a result of a transfer or issue of shares of a class of shares of a bank holding company to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the bank holding company in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class, the bank holding company is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the bank holding company as a result of that issue or transfer of shares.

  • 2001, c. 9, s. 183
  • 2012, c. 31, s. 120

Marginal note:When approval not required

  •  (1) Despite sections 875 and 887, the approval of the Minister is not required in respect of a bank holding company with equity of less than twelve billion dollars if a person with a significant interest in a class of shares of the bank holding company, or an entity controlled by a person with a significant interest in a class of shares of the bank holding company, purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the bank holding company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

  • Marginal note:Percentage

    (2) Subject to subsection (3) and for the purpose of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the bank holding company on the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister.

  • Marginal note:When approval not required

    (3) If a person has a significant interest in a class of shares of a bank holding company and the person’s percentage of that class has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of

    • (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the bank holding company on the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister, and

    • (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the bank holding company at any time after the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister.

  • Marginal note:Exception — eligible agent

    (3.1) If the person referred to in subsection (1) is an eligible agent or an entity controlled by an eligible agent, then the Minister may reduce the percentage referred to in subsection (2) or (3).

  • Marginal note:Exception

    (4) Subsection (1) does not apply if the purchase or other acquisition of shares or the acquisition of control referred to in that subsection would

    • (a) result in the acquisition of control of the bank holding company by the person referred to in that subsection;

    • (b) if the person controls the bank holding company but the voting rights attached to the aggregate of any voting shares of the bank holding company beneficially owned by the person and by entities controlled by the person do not exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the bank holding company, cause the voting rights attached to that aggregate to exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the bank holding company;

    • (c) result in the acquisition of a significant interest in a class of shares of the bank holding company by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or

    • (d) result in an increase in a significant interest in a class of shares of the bank holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies, and the increase is not exempted by the regulations.

  • Marginal note:Regulations

    (5) The Governor in Council may make regulations

    • (a) exempting from the application of paragraph (4)(c) the acquisition of a significant interest in a class of shares of the bank holding company by an entity controlled by the person; and

    • (b) exempting from the application of paragraph (4)(d) an increase in a significant interest in a class of shares of the bank holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 90, c. 31, s. 121

Marginal note:When approval not required

  •  (1) Despite sections 875 and 887, the approval of the Minister is not required if

    • (a) the Superintendent has, by order, directed the bank holding company to increase its capital and shares of the bank holding company are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

    • (b) a person, other than an eligible agent, who controls, within the meaning of paragraph 3(1)(a), the bank holding company acquires additional shares of the bank holding company.

  • Marginal note:Exception

    (2) Paragraph (1)(a) does not apply in respect of a bank holding company with equity of twelve billion dollars or more.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 91, c. 31, s. 122

Marginal note:Pre-approval

 For the purposes of sections 875 and 887, the Minister may approve

  • (a) the purchase or other acquisition of any number or percentage of shares of a bank holding company that may be required in a particular transaction or series of transactions; or

  • (b) the purchase or other acquisition of up to a specified number or percentage of shares of a bank holding company within a specified period.

  • 2001, c. 9, s. 183

Marginal note:Public holding requirement

  •  (1) Every bank holding company with equity of two billion dollars or more but less than twelve billion dollars shall, from and after the day determined under this section in respect of that bank holding company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the bank holding company and that are

    • (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

    • (b) shares none of which is beneficially owned by a person who is a major shareholder of the bank holding company in respect of the voting shares of the bank holding company or by any entity that is controlled by a person who is a major shareholder of the bank holding company in respect of such shares.

  • Marginal note:Determination of day

    (2) The day referred to in subsection (1) is

    • (a) if the bank holding company had equity of two billion dollars or more but less than twelve billion dollars on the day the bank holding company was formed or came into existence, the day that is three years after that day; and

    • (b) in any other case, the day that is three years after the day of the first annual meeting of the shareholders of the bank holding company held after the equity of the bank holding company first reaches two billion dollars.

  • Marginal note:Extension

    (3) If general market conditions so warrant and the Minister is satisfied that a bank holding company has used its best efforts to be in compliance with this section on the day determined under subsection (2), the Minister may specify a later day as the day from and after which the bank holding company must comply with subsection (1).

  • 2001, c. 9, s. 183
  • 2007, c. 6, ss. 132, 133
  • 2012, c. 5, s. 92

Marginal note:Public holding requirement

 If a bank holding company to which section 893 applies becomes a bank holding company with equity of twelve billion dollars or more, that section continues to apply to the bank holding company until no person is a major shareholder of the bank holding company, other than a person in respect of whom subsections 876(2) to (6) applies.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 93

Marginal note:Limit on assets

  •  (1) Unless an exemption order with respect to the bank holding company is granted under section 897, if a bank holding company fails to comply with section 893 in any month, the Minister may, by order, require the bank holding company not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the bank holding company’s average total assets in the three month period ending on the last day of the month immediately before the month specified in the order.

  • Marginal note:Average total assets

    (2) For the purposes of subsection (1), the average total assets of a bank holding company in a three month period is to be computed by adding the total assets of the bank holding company as calculated for the month end of each of the three months in the period and by dividing the sum by three.

  • Definition of total assets

    (3) For the purposes of subsections (1) and (2), total assets, in respect of a bank holding company, has the meaning given that expression by the regulations.

  • 2001, c. 9, s. 183
 
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