Bank Act (S.C. 1991, c. 46)

Marginal note:Definitions

• 925. (1) The definitions in subsection 464(1) apply in respect of bank holding companies, except that the reference to “section 468” in the definition “permitted entity” is to be read as a reference to “section 930” and the reference to “bank” in that definition is to be read as a reference to “bank holding company”.

• Marginal note:Members of a bank holding company’s group

  (2) For the purpose of this Division, a member of a bank holding company’s group is any of the following:

  • (a) an entity referred to in any of paragraphs 930(1)(a) to (f) that controls the bank holding company;

  • (b) a subsidiary of the bank holding company or of an entity referred to in any of paragraphs 930(1)(a) to (f) that controls the bank holding company;

  • (c) an entity in which the bank holding company, or an entity referred to in any of paragraphs 930(1)(a) to (f) that controls the bank holding company, has a substantial investment; or

  • (d) a prescribed entity in relation to the bank holding company.

• Marginal note:Non-application of Division

  (3) This Division does not apply in respect of

  • (a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 941(a) to be an interest in real property; or

  • (b) the holding of a security interest in securities of an entity.

Marginal note:Investments

926. Subject to this Division, a bank holding company may invest its funds in the shares of or ownership interests in any entity or make any other investment that its directors consider necessary or advisable to manage the bank holding company’s liquidity.

Marginal note:Investment standards

927. The directors of a bank holding company shall establish and the bank holding company shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply to avoid undue risk of loss and obtain a reasonable return.

Marginal note:Restriction on control and substantial investments

• 928. (1) Subject to subsections (2) and (3), no bank holding company shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.

• Marginal note:Exception: indirect investments

  (2) A bank holding company may acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of

  • (a) an acquisition of control of an entity referred to in any of paragraphs 930(1)(a) to (j), a specialized financing entity or a prescribed entity that controls or has a substantial investment in the entity; or

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

    • (i) an entity referred to in any of paragraphs 930(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the bank holding company, or

    • (ii) an entity controlled by an entity referred to in any of paragraphs 930(1)(a) to (j), a specialized financing entity or a prescribed entity that is controlled by the bank holding company.

• Marginal note:Exception: temporary investments, realizations and loan workouts

  (3) A bank holding company may acquire control of, or acquire or increase a substantial investment in, an entity by way of

  • (a) a temporary investment permitted by section 933;

  • (b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 934; or

  • (c) a realization of security permitted by section 935.

• Marginal note:Exception: uncontrolled event

  (4) A bank holding company is deemed not to contravene subsection (1) if the bank holding company acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the bank holding company.

• Marginal note:Application of other provision

  (5) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a bank holding company may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions of that other provision are met.

• Marginal note:Timing of deemed acquisition

  (6) If a bank holding company decides to exercise its right under subsection (5), the bank holding company is deemed to be acquiring the control or the substantial investment under the other provision.