Financial Consumer Agency of Canada Act (S.C. 2001, c. 9)
Full Document:
Assented to 2001-06-14
Marginal note:1997, c. 15, s. 151(1)
315. (1) Paragraph 410(1)(b) of the Act is replaced by the following:
(b) is a director or senior officer of the association or of a body corporate that controls the association;
(2) Subsection 410(1) of the Act is amended by striking out the word “or” at the end of paragraph (d) and by adding the following after paragraph (d):
(d.1) is an entity in which a person who controls the association has a substantial investment; or
(3) Section 410 of the Act is amended by adding the following after subsection (1):
Marginal note:Related party of retail association
(1.1) Subject to the regulations, for the purposes of this Part, a person is a related party of a retail association if the person is
(a) a member of the association or of an association that controls, or has a significant interest in, the association;
(b) a director or senior officer of the association or of a body corporate that controls the association;
(c) the spouse or common-law partner, or a child who is less than eighteen years of age, of a person referred to in paragraph (a) or (b);
(d) an entity that is controlled, within the meaning of section 3, determined without regard to paragraph 3(1)(e), by a person referred to in any of paragraphs (a) to (c); or
(e) a person, or a member of a class of persons, designated under subsection (2) or (3) as, or deemed under subsection (4) to be, a related party of the association.
Marginal note:Exception — subsidiaries and substantial investments of associations
(1.2) If an entity in which an association has a substantial investment would, but for this subsection, be a related party of the association only because a person who controls the association controls the entity or has a substantial investment in the entity, and the person does not control the entity or have a substantial investment in the entity otherwise than through the person’s controlling interest in the association, the entity is not a related party of the association.
316. (1) Paragraph 411(2)(a) of the Act is amended by adding the following after subparagraph (ii):
(ii.1) in exchange for shares of a body corporate that has been continued as an association under Part III,
(2) Paragraph 411(2)(a) of the Act is amended by striking out the word “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):
(iii.1) by way of consideration in accordance with the terms of a sale agreement under Part VII, or
(3) Section 411 of the Act is amended by adding the following after subsection (3):
Marginal note:Exception for holding body corporate
(4) Subject to subsection (5), a holding body corporate of an association is not a related party of the association.
Marginal note:Holding body corporate of a retail association
(5) Unless the regulations provide otherwise, a holding body corporate of a retail association is a related party of the retail association.
Marginal note:Substantial investment — related party exception
(6) If a holding body corporate of an association is, because of subsection (4), not a related party of the association, any entity in which the holding body corporate has a substantial investment is not a related party of the association if no related party of the association has a substantial investment in the entity otherwise than through the control of the holding body corporate.
317. Section 418 of the Act is amended by adding the following after subsection (3):
Marginal note:Asset transactions in restructuring
(3.1) Despite any of the provisions of subsections (1) and (2), an association may acquire any assets from, or dispose of any assets to, a related party of the association as part of, or in the course of, a restructuring, if the acquisition or disposition has been approved in writing by the Superintendent.
318. (1) Subsection 419(1) of the Act is amended by adding the following after paragraph (a):
(a.1) in the case of a retail association, involves, subject to subsection (4), the provision of services, other than loans or guarantees, normally provided to the public by the association in the ordinary course of business;
(2) Section 419 of the Act is amended by adding the following after subsection (3):
Marginal note:Loans or guarantees not included
(4) The provision of services, for the purposes of paragraph (1)(a.1), does not include the making of loans or guarantees.
Marginal note:1997, c. 15, s. 153(1); 2000, c. 12, par. 86(b)
319. (1) Subparagraphs 420(1)(a)(i) and (ii) of the English version of the Act are replaced by the following:
(i) a director or senior officer of the association or of an entity that controls the association, or
(ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer of the association or of an entity that controls the association.
Marginal note:1997, c. 15, s. 153(1); 2000, c. 12, par. 86(c)
(2) Subparagraphs 420(1)(b)(i) and (ii) of the English version of the Act are replaced by the following:
(i) a director or senior officer of the association or of an entity that controls the association, or
(ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer of the association or of an entity that controls the association.
Marginal note:1997, c. 15, s. 153(2)
(3) Subsection 420(2) of the Act is replaced by the following:
Marginal note:Loans to full-time senior officers
(2) An association may, with respect to a related party of the association referred to in subsection (1) who is a full-time senior officer of the association, make, take an assignment of or otherwise acquire a loan to the related party only if the aggregate principal amount of all outstanding loans to the related party that are held by the association and its subsidiaries, together with the principal amount of the proposed loan, does not exceed the greater of twice the annual salary of the related party and $100,000.
Marginal note:1997, c. 15, s. 153(3)
(4) Subsection 420(5) of the Act is replaced by the following:
Marginal note:Preferred terms — loan to spouse or common-law partner of senior officer
(4.1) Despite section 425, an association may make a loan referred to in paragraph 415(b) to the spouse or common-law partner of a senior officer of the association on terms and conditions more favourable than market terms and conditions, as defined in subsection 425(2), by the association if those terms and conditions have been approved by the conduct review committee of the association.
Marginal note:Preferred terms — other financial services
(5) Despite section 425, an association may offer financial services, other than loans or guarantees, to a senior officer of the association, or to the spouse or common-law partner, or to a child who is less than eighteen years of age, of a senior officer of the association, on terms and conditions more favourable than market terms and conditions, as defined in subsection 425(2), if
(a) the financial services are offered by the association to employees of the association on those favourable terms and conditions; and
(b) the conduct review committee of the association has approved the practice of making those financial services available on those favourable terms and conditions to senior officers of the association or to the spouses or the common-law partners, or to the children under eighteen years of age, of senior officers of the association.
Marginal note:1997, c. 15, s. 155
320. Section 422 of the Act is replaced by the following:
Marginal note:Margin loans
422. The Superintendent may establish terms and conditions with respect to the making by an association of margin loans to a director or senior officer of the association.
321. Subsection 425(2) of the Act is replaced the following:
Meaning of “market terms and conditions”
(2) For the purposes of subsection (1), “market terms and conditions” means
(a) in respect of a service or a loan facility or a deposit facility offered to the public by the association in the ordinary course of business, terms and conditions that are no more or less favourable than those offered to the public by the association in the ordinary course of business; and
(b) in respect of any other transaction,
(i) terms and conditions, including those relating to price, rent or interest rate, that might reasonably be expected to apply in a similar transaction in an open market under conditions requisite to a fair transaction between parties who are at arm’s length and who are acting prudently, knowledgeably and willingly, or
(ii) if the transaction is one that would not reasonably be expected to occur in an open market between parties who are at arm’s length, terms and conditions, including those relating to price, rent or interest rate, that would reasonably be expected to provide the association with fair value, having regard to all the circumstances of the transaction, and that would be consistent with the parties to the transaction acting prudently, knowledgeably and willingly.
322. Section 430 of the Act is replaced by the following:
Marginal note:Voidable contracts
430. (1) If an association enters into a transaction that it is prohibited from entering into by this Part, the association or the Superintendent may apply to a court for an order setting aside the transaction or for any other appropriate remedy, including an order directing that the related party of the association involved in the transaction account to the association for any profit or gain realized or that any director or senior officer of the association who authorized the transaction compensate the association for any loss or damage incurred by the association.
Marginal note:Time limit
(2) An application under subsection (1) in respect of a particular transaction may only be made within the period of three months following the day the notice referred to in section 429 in respect of the transaction is given to the Superintendent or, if no such notice is given, the day the Superintendent becomes aware of the transaction.
Marginal note:Certificate
(3) For the purposes of subsection (2), a document purporting to have been issued by the Superintendent, certifying the day on which the Superintendent became aware of the transaction, shall, in the absence of evidence to the contrary, be received in evidence as conclusive proof of that fact without proof of the signature or of the official character of the person appearing to have signed the document and without further proof.
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