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Financial Consumer Agency of Canada Act (S.C. 2001, c. 9)

Assented to 2001-06-14

405. Subsection 410(1) of the Act is replaced by the following:

Marginal note:When approval not required

  • 410. (1) Despite subsections 407(1) and (2) and section 408, the approval of the Minister is not required if

    • (a) the Superintendent has, by order, directed the company to increase its capital and shares of the company are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

    • (b) a person who controls, within the meaning of paragraph 3(1)(a), the company acquires additional shares of the company.

  • Marginal note:Exception

    (1.1) Paragraph (1)(a) does not apply in respect of a converted company in respect of which subsection 407(4) or (11) applies or a company to which subsection 407(5) or (12) applies.

406. Section 411 of the Act is replaced by the following:

Marginal note:Public holding requirement

  • 411. (1) Every company shall, from and after the day determined under this section in respect of that company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the company and that are

    • (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

    • (b) shares none of which is beneficially owned by a person who is a major shareholder of the company in respect of the voting shares of the company or by any entity that is controlled by a person who is a major shareholder of the company in respect of such shares.

  • Marginal note:Determination of day

    (2) If the company has equity of one billion dollars or more on the day it comes into existence, the day referred to in subsection (1) is the day that is three years after that day and, in the case of any other company, the day referred to in subsection (1) is the day that is three years after the day of the first annual meeting of the shareholders and policyholders of the company held after the equity of the company first reaches one billion dollars.

  • Marginal note:Extension

    (3) If general market conditions so warrant and the Minister is satisfied that a company has used its best efforts to be in compliance with this section on the day determined under subsection (2), the Minister may specify a later day as the day from and after which the company must comply with subsection (1).

407. Subsection 412(1) of the Act is replaced by the following:

Marginal note:Limit on assets

  • 412. (1) Unless an exemption order with respect to the company is granted under section 414, if a company fails to comply with section 411 in any month, the Minister may, by order, require the company not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the company’s average total assets in the three month period ending on the last day of the month immediately before the month specified in the order.

  • 408. (1) The portion of subsection 414(1) of the Act before paragraph (c) is replaced by the following:

    Marginal note:Exemption by order of Minister

    • 414. (1) An entity that controls a company and that is

      • (a) an insurance holding company that is in compliance with section 938,

      • (b) a widely held bank,

      • (b.1) a bank that would be in compliance with section 411 if it were a company,

      • (b.2) a widely held bank holding company,

      • (b.3) a bank holding company that would be in compliance with section 411 if it were a company,

  • (2) Paragraph 414(1)(e) of the Act is replaced by the following:

  • (3) Paragraph 414(5)(a) of the Act is replaced by the following:

    • (a) the entity that applied for the exemption order ceases to control the company;

409. Section 416 of the Act is replaced by the following:

Marginal note:Acquisition of control permitted

  • 416. (1) Subject to subsection (2) and sections 408 and 417, section 411 does not apply in respect of a company if a person acquires control of a company with equity of one billion dollars or more through the purchase or other acquisition of all or any number of the shares of the company by the person or by any entity controlled by the person.

  • Marginal note:Undertaking required

    (2) Subsection (1) applies only if the person provides the Minister with an undertaking satisfactory to the Minister to do all things necessary so that, within three years after the acquisition, or any other period that the Minister may specify, the company has voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the company and that are

    • (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

    • (b) shares none of which is beneficially owned by a person who is a major shareholder of the company in respect of the voting shares of the company or by any entity that is controlled by a person who is a major shareholder of the company in respect of such shares.

Marginal note:1997, c. 15, s. 246

  • 410. (1) The portion of subsection 418(1) of the Act before paragraph (a) is replaced by the following:

    Marginal note:Restriction on voting rights

    • 418. (1) If, with respect to any company, a particular person contravenes subsection 407(1), (4), (9), (11) or (15) or section 407.03, 407.1 or 407.2 or fails to comply with an undertaking referred to in subsection 416(2) or with any term or condition imposed under section 421, no person, and no entity controlled by the particular person, shall, in person or by proxy, exercise any voting rights

  • Marginal note:1997, c. 15, s. 246

    (2) Subsection 418(2) of the Act is replaced by the following:

    • Marginal note:Subsection (1) ceases to apply

      (2) Subsection (1) ceases to apply in respect of a person when, as the case may be,

      • (a) the shares to which the contravention relates have been disposed of;

      • (b) the person ceases to control the company within the meaning of paragraph 3(1)(d);

      • (c) if the person failed to comply with an undertaking referred to in subsection 416(2), the company complies with section 411; or

      • (d) if the person failed to comply with a term or condition imposed under section 421, the person complies with the term or condition.

    • Marginal note:Saving

      (3) Despite subsection (1), if a person contravenes subsection 407(4) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the converted company beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the converted company, the Minister may, after consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the converted company beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares.

    • Marginal note:Saving

      (4) Despite subsection (1), if a person contravenes subsection 407(9) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the company beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the company, the Minister may, after consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the company beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares.

411. Section 419 of the Act is replaced by the following:

Marginal note:Application for approval

  • 419. (1) An application for an approval of the Minister required under this Part must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require.

  • Marginal note:Applicant

    (2) If, with respect to any particular transaction, this Part applies to more than one person, any one of those persons may make the application to the Minister for approval on behalf of all of those persons.

412. Subsection 420(1) of the Act is replaced by the following:

Marginal note:Matters for consideration

  • 420. (1) Subject to subsection (1.1), if an application for an approval under section 407 is made, the Minister, in determining whether or not to approve the transaction, shall take into account all matters that the Minister considers relevant to the application, including

    • (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the company;

    • (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the company;

    • (c) the business record and experience of the applicant or applicants;

    • (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity;

    • (e) whether the company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

    • (f) if the company is a converted company in respect of which the Minister has issued an order under subsection 407(8) or a converted company in respect of which subsection 407(11) applied at any time, or a company that controls, within the meaning of paragraph 3(1)(d), such a converted company, the opinion of the Superintendent regarding the extent to which the corporate structure of the applicant or applicants and their affiliates may affect the supervision and regulation of the company, having regard to

      • (i) the nature and extent of the proposed financial services activities to be carried out by the company and its affiliates, and

      • (ii) the nature and degree of supervision and regulation applying to the proposed financial services activities to be carried out by the affiliates of the company;

    • (g) the impact of any integration of the businesses and operations of the applicant or applicants with those of the company on the conduct of those businesses and operations; and

    • (h) the best interests of the financial system in Canada.

  • Marginal note:Exception

    (1.1) Subject to subsection 407.2(1), the Minister shall take into account only paragraph (1)(d) if the application is in respect of a transaction that would result in the applicant or applicants holding

    • (a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of a converted company in respect of which subsection 407(4) applies or of a company to which subsection 407(5) applies; or

    • (b) more than 10 per cent but no more than 30 per cent of any class of the outstanding non-voting shares of such a converted company or company.

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