Budget Implementation Act, 2016, No. 1 (S.C. 2016, c. 7)

Marginal note:2009, c. 2, s. 243(1)

• 131 (1) Paragraph 39.13(1)(a) of the Act is replaced by the following:

  • (a) vest in the Corporation the shares and subordinated debt of the federal member institution that are specified in the order;

• (2) Subsection 39.13(1) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

  • (d) direct the Corporation to carry out a conversion under subsection 39.2(2.3).

• (3) Section 39.13 of the Act is amended by adding the following after subsection (1.1):

  • Marginal note:Conditions for conversion

    (1.2) An order may be made under paragraph (1)(d) in respect of the federal member institution only if the institution is a domestic systemically important bank and an order has also been made under paragraph (1)(a) or (b) in respect of the institution.

  • Marginal note:Order — longer period

    (1.3) The Governor in Council may, on the recommendation of the Minister made under section 39.12, by order, require the Corporation to apply for a winding-up order in respect of the federal member institution in accordance with subsection 39.22(1.1).

• Marginal note:1996, c. 6, s. 41; 2009, c. 2, s. 243(2)(F)

  (4) The portion of subsection 39.13(2) of the French version of the Act before paragraph (a) is replaced by the following:

  • Marginal note:But du décret portant dévolution

    (2) Le décret pris au titre de l’alinéa (1)a) :

• Marginal note:1996, c. 6, s. 41

  (5) Paragraphs 39.13(2)(a) and (b) of the Act are replaced by the following:

  • (a) vests in the Corporation the shares and subordinated debt that are subject to the order, free from any adverse claim, including any claim that a transfer was wrongful or that a particular adverse person was the owner of or had an interest or right in respect of the shares or subordinated debt, even though the Corporation knows of the adverse claim;

  • (b) extinguishes any such adverse claim to the extent that the claim is a claim that a person other than the Corporation is the owner of or has an interest or right in respect of the shares or subordinated debt;

• Marginal note:1996, c. 6, s. 41

  (6) Paragraph 39.13(2)(d) of the Act is replaced by the following:

  • (d) does not prevent a secured creditor or assignee or successor in interest of the person who was the holder of the shares or subordinated debt immediately before the making of the order from being entitled to receive compensation under section 39.23; and

• (7) Subsection 39.13(2) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

  • (e) gives the Corporation the right to recover, out of the assets of the federal member institution and in priority to all other claims, all the costs, charges and expenses properly incurred by the Corporation in furtherance of the order, including those related to its operation of the institution.

• Marginal note:1996, c. 6, s. 41

  (8) Paragraph 39.13(3)(c) of the Act is replaced by the following:

  • (c) gives the Corporation the right to recover, out of the assets of the federal member institution and in priority to all other claims, all the costs, charges and expenses properly incurred by the Corporation in furtherance of the order, including those related to its operation of the institution.

• Marginal note:1996, c. 6, s. 41

  (9) Subsection 39.13(4) of the Act is replaced by the following:

  • Marginal note:For greater certainty — bankruptcy

    (4) For greater certainty, shares and subordinated debt that are subject to an order made under paragraph (1)(a) and that, immediately before the making of the order, are vested in a trustee in bankruptcy under the Bankruptcy and Insolvency Act are vested in the Corporation.

  • Marginal note:For greater certainty — exercising rights

    (4.1) For greater certainty, an order made under paragraph (1)(a) or (b) prevents any person, other than the Corporation, who is the holder of shares or subordinated debt or other debts or liabilities of the federal member institution or who is a party to or a beneficiary of a contract with the institution, and any secured creditor or assignee or successor in interest of such a person, from exercising any voting or other rights arising from the person’s status in any manner that could defeat or interfere with the rights, powers, privileges and immunities of the Corporation as holder of shares or subordinated debt or as receiver, as the case may be.

• Marginal note:1996, c. 6, s. 41

  (10) Paragraph 39.13(5)(b) of the English version of the Act is replaced by the following:

  • (b) an asset of the federal member institution that is acquired from the Corporation, as receiver, shall, except to the extent that it is an asset referred to in subparagraph (3)(b)(iii), be acquired free of any adverse claim of the federal member institution or any other person, and

• Marginal note:1996, c. 6, s. 41

  (11) Subsection 39.13(6) of the Act is replaced by the following:

  • Marginal note:Order conclusive

    (6) An order made under this section and any action taken or decision made in furtherance of such an order are for all purposes final and conclusive and shall not be questioned or reviewed in any court.

Marginal note:2009, c. 2, s. 244; 2012, c. 5, s. 197

132 Sections 39.131 and 39.132 of the Act are repealed.

Marginal note:1996, c. 6, s. 41

• 133 (1) Subsection 39.14(1) of the Act is replaced by the following:

  Marginal note:Powers of Corporation

  • 39.14 (1) If an order is made under paragraph 39.13(1)(a) or (b) in respect of a federal member institution, the powers, duties, functions, rights and privileges of the directors of the federal member institution and those of its officers who are responsible for its management are suspended except to the extent that is specified in writing by the Corporation. The Corporation may exercise those powers, rights and privileges and perform those duties and functions.

• Marginal note:1996, c. 6, s. 41

  (2) Subsection 39.14(2) of the Act is replaced by the following:

  • Marginal note:Shareholders

    (1.2) If an order is made under paragraph 39.13(1)(a) or (b) in respect of a federal member institution, the powers, rights and privileges of its shareholders to vote or give approvals are suspended and the Corporation may exercise those powers, rights and privileges.

  • Marginal note:Persons to assist

    (2) The Corporation may appoint one or more persons to assist it in the management of any federal member institution or in carrying out the Corporation’s functions as holder of shares or subordinated debt or as receiver and may delegate to those persons any of the powers, duties, functions, rights or privileges of the directors and officers of the federal member institution.

• Marginal note:1996, c. 6, s. 41

  (3) Subsection 39.14(3) of the Act is repealed.

• (4) Section 39.14 of the Act is amended by adding the following after subsection (3):

  • Marginal note:Power to appoint and remove

    (4) If an order is made under paragraph 39.13(1)(b) in respect of a federal member institution, the Corporation may appoint or remove any director of the federal member institution.

  • Marginal note:Corporation’s directions

    (5) If an order is made under paragraph 39.13(1)(a) or (b) in respect of a federal member institution, the Corporation may give directions to the board of directors of the federal member institution, including to make, amend or repeal any by-law of the institution.

  • Marginal note:Implementation

    (6) The board of directors of the federal member institution shall ensure that a direction given under subsection (5) is implemented in a prompt and efficient manner and shall, after implementing a direction, notify the Corporation without delay that it has been implemented.

  • Marginal note:By-laws — board of directors

    (7) The board of directors of the federal member institution may, with the prior approval of the Corporation, make, amend or repeal any by-law of the institution.