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 XIIForeign Banks (continued)

DIVISION 4Financial Establishment in Canada (continued)

Investments (continued)

Marginal note:Investment in a limited commercial entity — foreign bank

  •  (1) Subject to the requirements relating to approval set out in Division 5, a foreign bank that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if

    • (a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(a) to (i);

    • (b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition financial services entity in subsection 507(1), determined in the prescribed manner;

    • (c) the Canadian entity does not engage in any leasing activities; and

    • (d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or any entity associated with the foreign bank.

  • Marginal note:Investment in a limited commercial entity — entity associated with a foreign bank

    (2) Subject to the requirements relating to approval set out in Division 5, an entity that is associated with a foreign bank and that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if

    • (a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(a) to (i);

    • (b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition financial services entity in subsection 507(1), determined in the prescribed manner;

    • (c) the Canadian entity does not engage in leasing activities; and

    • (d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank.

  • Marginal note:Investment in holding body corporate — limited commercial entities

    (3) A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity whose business is limited to acquiring or holding shares of, or ownership interests in, limited commercial entities.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 60

Marginal note:Acquisition of other investments

 A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity

  • (a) by way of an investment permitted by any of sections 522.11 to 522.13;

  • (b) by way of a temporary investment permitted by section 522.14;

  • (c) as a result of a default that has occurred under the terms of an agreement with respect to a loan or under any other documents governing the terms of a loan, as permitted by section 522.15;

  • (d) through a realization of security, as permitted by section 522.15; or

  • (e) if it does so in accordance with regulations made under paragraph 522.23(a) concerning specialized financing.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 61

Marginal note:Indirect investments through federal institutions

  •  (1) A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity by way of

    • (a) an acquisition or holding of the control of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f), or of a prescribed Canadian entity, that controls or has a substantial investment in the Canadian entity; or

    • (b) an acquisition or holding of shares or ownership interests in the Canadian entity by

      • (i) a Canadian entity referred to in any of paragraphs 468(1)(a) to (f), or a prescribed Canadian entity, that is controlled by the foreign bank or the entity associated with the foreign bank, or

      • (ii) a Canadian entity controlled by a Canadian entity referred to in subparagraph (i).

  • Marginal note:Indirect investments through federal institutions

    (2) If a foreign bank or an entity associated with a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity under subsection (1), none of the requirements relating to approval set out in Division 5 apply in respect of that acquisition or holding.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 62

Marginal note:Investments through provincial institutions

 An entity that is associated with a foreign bank and that is

  • (a) an entity referred to in any of paragraphs 468(1)(g) to (i), or

  • (b) a Canadian entity controlled by an entity referred to in any of paragraphs 468(1)(g) to (i)

may acquire or hold control of, or a substantial investment in, a Canadian entity that is not a permitted Canadian entity or an entity referred to in paragraphs 468(1)(a) to (i), and if it does so, none of the requirements relating to approval set out in Division 5 apply in respect of that acquisition or holding.

  • 2001, c. 9, s. 132

Marginal note:Indirect investments through provincial institutions

 A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity, other than a permitted Canadian entity or a Canadian entity referred to in any of paragraphs 468(1)(a) to (i), by way of

  • (a) an acquisition or holding of the control of a Canadian entity referred to in any of paragraphs 468(1)(g) to (i), or of a prescribed Canadian entity, that controls or has a substantial investment in the Canadian entity; or

  • (b) an acquisition or holding of shares or ownership interests in the Canadian entity by

    • (i) a Canadian entity referred to in any of paragraphs 468(1)(g) to (i), or a prescribed Canadian entity, that is controlled by the foreign bank or the entity associated with the foreign bank, or

    • (ii) a Canadian entity controlled by a Canadian entity referred to in subparagraph (i).

  • 2001, c. 9, s. 132

Marginal note:Temporary investments

  •  (1) Subject to sections 522.21 and 522.211, a foreign bank or an entity associated with a foreign bank may, by way of temporary investment, acquire or hold control of, or a substantial investment in, a Canadian entity if the foreign bank or the entity associated with a foreign bank has a financial establishment in Canada or would, by virtue of the temporary investment, have a financial establishment in Canada.

  • Marginal note:Divestiture

    (2) If subsection (1) applies in respect of a foreign bank or an entity associated with a foreign bank, the foreign bank or entity shall do all things necessary to ensure that, within two years after acquiring the control or the substantial investment or within any other period that may be specified or approved by the Minister, it no longer controls or has a substantial investment in the entity.

  • Marginal note:Extension

    (3) On application by a foreign bank, or an entity associated with a foreign bank, the Minister may extend the period referred to in subsection (2) by any further period or periods.

  • Marginal note:Exception

    (4) If a foreign bank, or an entity associated with a foreign bank, acquires or holds, by way of a temporary investment, control of, or a substantial investment in, a Canadian entity for which the approval of the Minister would have been required under any of paragraphs 522.22(1)(a) to (e) if the foreign bank or the entity associated with a foreign bank had acquired the control or the substantial investment under section 522.07 or 522.08, the foreign bank or the entity associated with a foreign bank shall, within 90 days after acquiring control, or after acquiring the substantial investment,

    • (a) apply to the Minister for approval to retain control of the Canadian entity or to continue to hold the substantial investment in the Canadian entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or

    • (b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the Canadian entity or holds a substantial investment in the Canadian entity.

  • Marginal note:Deemed temporary investment

    (5) If a foreign bank or an entity associated with a foreign bank holds control of, or a substantial investment in, a Canadian entity as permitted by this Division and the foreign bank or the entity associated with the foreign bank becomes aware of a change in the business, affairs or activities of the Canadian entity that, if the change had taken place before the acquisition of control or the substantial investment, would have caused the entity not to be a limited commercial entity or a Canadian entity referred to in section 522.07 or 522.08 or would have been such that approval for the acquisition would have been required under any of paragraphs 522.22(1)(a) to (e) or (g), the foreign bank or the entity associated with the foreign bank is deemed to have acquired, on the day it becomes aware of the change, a temporary investment in respect of which subsections (1) to (4) apply.

  • Marginal note:Notification

    (6) Within 90 days after acquiring control or a substantial investment under subsection (1) or (5), a foreign bank or an entity associated with a foreign bank shall notify the Minister in writing of the acquisition.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 63
 
Date modified: