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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 XIIForeign Banks (continued)

DIVISION 4Financial Establishment in Canada (continued)

Investments (continued)

Marginal note:Acquisition by loan workout or realization of security

  •  (1) 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

    • (a) as a result of a default that has occurred under the terms of an agreement with respect to a loan made between the foreign bank — or the entity associated with a foreign bank — and the Canadian entity, or under any other documents governing the terms of the loan, or

    • (b) through the realization of a security interest for any loan or advance made by the foreign bank or the entity associated with the foreign bank, or for any other debt or liability owing to it,

    it may retain the control or the substantial investment for five years, but it shall do all things necessary to ensure that, within five years after the acquisition, it no longer controls the Canadian entity or holds a substantial investment in the Canadian entity.

  • Marginal note:Extension

    (2) On application by a foreign bank or an entity associated with a foreign bank, the Minister may extend the period referred to in subsection (1) by any further period or periods.

  • Marginal note:Exception

    (3) If, under subsection (1), a foreign bank or an entity associated with a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity for which the approval of the Minister is required under Division 5, the foreign bank or entity associated with the foreign bank may retain control of the Canadian entity, or continue to hold the substantial investment, for an indeterminate period if the approval in writing of the Minister is obtained before the end of the period referred to in subsection (1) or of any extension granted under subsection (2).

  • 2001, c. 9, s. 132

Branches

Marginal note:Bank branches

 A foreign bank may, under Part XII.1, maintain a branch in Canada to carry on business in Canada.

  • 2001, c. 9, s. 132

Marginal note:Insurance branches

 A foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank may obtain an order under Part XIII of the Insurance Companies Act to insure, in Canada, risks.

  • 2001, c. 9, s. 132

Marginal note:Business of a cooperative credit society and dealing in securities

  •  (1) Subject to the requirements relating to approval set out in Division 5, a foreign bank — or an entity associated with a foreign bank —

    • (a) that is a foreign cooperative credit society may, in Canada, engage in or carry on the business of a cooperative credit society, so long as that business is engaged in or carried on in accordance with provincial laws relating to cooperative credit societies; or

    • (b) that is a foreign securities dealer may, in Canada, engage in or carry on the business of dealing in securities, or the business of providing investment counselling services and portfolio management services, so long as that business is engaged in or carried on in accordance with provincial laws relating to securities dealing or investment counselling and portfolio management.

  • Marginal note:Business of investment counselling services and portfolio management services

    (2) Subject to the requirements relating to approval set out in Division 5, an entity associated with a foreign bank incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province, that engages in or carries on, outside Canada, the business of providing investment counselling services and portfolio management services may engage in or carry on that business in Canada so long as that business in Canada is engaged in or carried on in accordance with provincial laws relating to investment counselling and portfolio management.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 64

Marginal note:Limited commercial branches

  •  (1) Subject to the requirements relating to approval set out in Division 5, and subject to subsection (2), a foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that has a financial establishment in Canada may maintain a branch in Canada or engage in or carry on business in Canada, so long as

    • (a) less than the prescribed portion — or if no portion is prescribed, 10 per cent — of its business in Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of

      • (i) paragraphs 522.08(1)(a) to (f), and

      • (ii) paragraphs (a) to (g) of the definition financial services entity in subsection 507(1);

    • (b) less than the prescribed portion — or if no portion is prescribed, 10 per cent — of its business outside Canada, determined in the prescribed manner, consists of one or more of the activities referred to in any of

      • (i) paragraphs 522.08(1)(a) to (f),

      • (ii) paragraphs (a) to (g) of the definition financial services entity in subsection 507(1), and

      • (iii) paragraph (h) of that definition, except under prescribed circumstances; and

    • (c) in the opinion of the Minister, the business in Canada is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or the entity associated with a foreign bank.

  • Marginal note:Prohibition

    (2) A foreign bank — or an entity associated with a foreign bank — that maintains a branch or engages in or carries on any business under subsection (1) may not in Canada engage in any leasing activities.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 65

DIVISION 5Approvals

Application

Marginal note:Non-application

 This Division does not apply in respect of investments acquired and held, branches maintained and businesses engaged in or carried on in accordance with Division 3.

  • 2001, c. 9, s. 132

Approval to Have a Financial Establishment in Canada

Marginal note:No financial establishment without approval — foreign bank

  •  (1) A foreign bank may not, without the prior written approval of the Minister, have a financial establishment in Canada.

  • Marginal note:Exception

    (2) Subsection (1) does not apply if the foreign bank or any entity associated with the foreign bank

    • (a) is an authorized foreign bank;

    • (b) is a foreign insurance company;

    • (c) controls or is a major owner of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f); or

    • (d) has already received the approval of the Minister to have a financial establishment in Canada.

  • Marginal note:Deeming

    (3) A foreign bank that was the subject of a designation order under subsection 508(1) as that subsection read immediately before the coming into force of this subsection and whose designation order has not been revoked is deemed to have received the approval of the Minister to have a financial establishment in Canada.

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 67

Marginal note:No financial establishment without approval — associated entity

  •  (1) An entity that is associated with a foreign bank may not, without the prior written approval of the Minister, have a financial establishment in Canada.

  • Marginal note:Exception

    (2) Subsection (1) does not apply if the entity associated with a foreign bank, the foreign bank or any other entity associated with the foreign bank

    • (a) is an authorized foreign bank;

    • (b) is a foreign insurance company;

    • (c) controls or is a major owner of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f); or

    • (d) has already received the approval of the Minister to have a financial establishment in Canada.

  • Marginal note:Deeming

    (3) An entity associated with a foreign bank that was the subject of a designation order under subsection 508(1) as that subsection read immediately before the coming into force of this subsection and whose designation order has not been revoked is deemed to have received the approval of the Minister to have a financial establishment in Canada.

  • 2007, c. 6, s. 67
 
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