Bank Act

Marginal note:Non-application of Part

• 487 (1) This Part does not apply in respect of any transaction entered into prior to the coming into force of this Part but, after the coming into force of this Part, any modification of, addition to, or renewal or extension of a prior transaction is subject to this Part.

• Marginal note:Idem

  (2) This Part does not apply in respect of

  • (a) the issue of shares of any class of shares, or of membership shares, of a bank when fully paid for in money or when issued

    • (i) in accordance with any provisions for the conversion of other issued and outstanding membership shares or securities of the bank into shares of that class of shares, or into membership shares,

    • (ii) as a share or membership share dividend,

    • (iii) in exchange for shares, or membership shares, however designated, of a body corporate that has been continued as a bank under Part III,

    • (iv) in accordance with the terms of an amalgamation or conversion under Part VI,

    • (v) by way of consideration in accordance with the terms of a sale agreement under Part VI, or

    • (vi) with the approval in writing of the Superintendent, in exchange for shares of another body corporate;

  • (b) the payment of dividends or patronage allocations by a bank;

  • (c) transactions that consist of the payment or provision by a bank to persons who are related parties of the bank of salaries, fees, stock options, pension benefits, incentive benefits or other benefits or remuneration in their capacity as directors, officers or employees of the bank;

  • (d) transactions approved by the Minister under subsection 678(1) of this Act or subsection 715(1) of the Insurance Companies Act; or

  • (e) if a bank is controlled by a widely held bank holding company or a widely held insurance holding company, transactions approved by the Superintendent that are entered as part of, or in the course of, a restructuring of the holding company or of any entity controlled by it.

• Marginal note:Exception

  (3) Nothing in paragraph (2)(c) exempts from the application of this Part the payment by a bank of fees or other remuneration to a person for

  • (a) the provision of services referred to in paragraph 495(1)(a); or

  • (b) duties outside the ordinary course of business of the bank.

• Marginal note:Exception for holding body corporate

  (4) A holding body corporate of a bank is not a related party of the bank if the holding body corporate is a Canadian financial institution that is referred to in any of paragraphs (a) to (d) of the definition financial institution in section 2.

• Marginal note:Substantial investment — related party exception

  (5) Where a holding body corporate of a bank is, because of subsection (4), not a related party of the bank, any entity in which the holding body corporate has a substantial investment is not a related party of the bank if no related party of the bank has a substantial investment in the entity otherwise than through the control of the holding body corporate.