An Act to amend certain Acts in relation to financial institutions (S.C. 2005, c. 54)
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Assented to 2005-11-25
An Act to amend certain Acts in relation to financial institutions
S.C. 2005, c. 54
Assented to 2005-11-25
An Act to amend certain Acts in relation to financial institutions
SUMMARY
This enactment amends certain Acts governing federal financial institutions. It makes changes to the corporate governance framework of banks, bank holding companies, insurance companies, insurance holding companies, trust and loan companies and cooperative credit associations to bring the Acts governing those institutions up to the standards adopted in 2001 for business corporations in the Canada Business Corporations Act that are appropriate for financial institutions and adapted to the financial institutions context, and updates certain governance standards that are unique to financial institutions.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1991, c. 46BANK ACT
1. (1) The definitions “form of proxy” and “proxy” in section 2 of the Bank Act are replaced by the following:
“form of proxy”
« formulaire de procuration »
“form of proxy” means a form of proxy as defined in the regulations;
“proxy”
« procuration »
“proxy” means a proxy as defined in the regulations;
(2) Section 2 of the Act is amended by adding the following in alphabetical order:
“going-private transaction”
« transaction de fermeture »
“going-private transaction” means a going-private transaction as defined in the regulations;
“minor”
« mineur »
“minor” has the same meaning as in the applicable provincial law and in the absence of any such law has the same meaning as the word “child” in the United Nations Convention on the Rights of the Child adopted in the United Nations General Assembly on November 20, 1989;
“squeeze-out transaction”
« transaction d’éviction »
“squeeze-out transaction” means a transaction by a bank that is not a distributing bank, or a bank holding company that is not a distributing bank holding company, that requires an amendment to a by-law referred to in subsection 217(1) and that would directly or indirectly result in the interest of a holder of shares of a class of shares being terminated without their consent and without substituting an interest of equivalent value in shares that are issued by the following persons and have rights and privileges equal to or greater than those of the shares of the affected class:
(a) in the case of a bank, the bank, and
(b) in the case of a bank holding company, the bank holding company;
(3) Section 2 of the French version of the Act is amended by adding the following in alphabetical order:
« banque n’ayant pas fait appel au public »
Marginal note:French version only
banque n’ayant pas fait appel au public S’entend d’une banque autre qu’une banque ayant fait appel au public.
« société de portefeuille bancaire n’ayant pas fait appel au public »
Marginal note:French version only
société de portefeuille bancaire n’ayant pas fait appel au public S’entend d’une société de portefeuille bancaire autre qu’une société de portefeuille bancaire ayant fait appel au public.
2. The Act is amended by adding the following after section 2.3:
Marginal note:Regulations — distributing bank or bank holding company
2.4 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing bank or distributing bank holding company for the purposes of this Act.
Marginal note:Exemption — bank or bank holding company
(2) On the application of a bank or bank holding company, the Superintendent may determine that it is not or was not a distributing bank or distributing bank holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that bank or bank holding company.
Marginal note:Exemption — class of banks or bank holding companies
(3) The Superintendent may determine that members of a class of banks or bank holding companies are not or were not distributing banks or distributing bank holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.
Marginal note:1997, c. 15, s. 1; 2001, c. 9, s. 42
3. Section 11 of the Act is repealed.
Marginal note:2001, c. 9, s. 43
4. (1) Subparagraph 14(1)(a)(iii) of the Act is replaced by the following:
(iii) the province in which the head office of the bank is situated; and
Marginal note:2001, c. 9, s. 43
(2) Subparagraph 14(1)(b)(iii) of the Act is replaced by the following:
(iii) the province in which the head office of the bank is situated.
Marginal note:1999, c. 28, s. 5
5. Paragraph 14.1(1)(b) of the Act is replaced by the following:
(b) the province in which the principal office of the authorized foreign bank is situated; and
Marginal note:1999, c. 28, s. 8
6. Section 20 of the Act is replaced by the following:
Marginal note:Authority of directors and officers
20. (1) No bank and no guarantor of an obligation of a bank may assert against a person dealing with the bank or against a person who has acquired rights from the bank that
(a) the bank’s incorporating instrument or any by-laws of the bank have not been complied with;
(b) the persons named as directors of the bank in the most recent return sent to the Superintendent under section 632 are not the directors of the bank;
(c) the place named in the incorporating instrument or by-laws of the bank is not the place where the head office of the bank is situated;
(d) a person held out by the bank as a director, officer or representative of the bank has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the bank or usual for a director, officer or representative; or
(e) a document issued by any director, officer or representative of the bank with actual or usual authority to issue the document is not valid or not genuine.
Marginal note:Exception — knowledge
(2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the bank.
7. Paragraph 28(1)(b) of the Act is replaced by the following:
(b) the province in which the head office of the bank is to be situated; and
8. (1) Subsection 62(1) of the Act is replaced by the following:
Marginal note:Shares issued in series
62. (1) The by-laws of a bank may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may
(a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and
(b) authorize the directors to do anything referred to in paragraph (a).
(2) Subsection 62(5) of the Act is replaced by the following:
Marginal note:Material to Superintendent
(5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.
Marginal note:1997, c. 15, s. 7
9. Subsection 66(3) of the Act is replaced by the following:
Marginal note:Exception
(3) Despite subsection (2), a bank may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares
(a) in exchange for
(i) property of a person who immediately before the exchange did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act,
(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act, or
(iii) property of a person who immediately before the exchange dealt with the bank at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank and all of the holders of shares in the class or series of shares so issued consent to the exchange;
(b) under an agreement referred to in subsection 224(1); or
(c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank.
10. Subsection 72(1) of the French version of the Act is replaced by the following:
Marginal note:Exception — représentant personnel
72. (1) La banque — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir soit des actions de la banque ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.
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