An Act to amend the law governing financial institutions and to provide for related and consequential matters (S.C. 2007, c. 6)
Full Document:
Assented to 2007-03-29
Marginal note:2001, c. 9, s. 132
57. Section 522.02 of the Act is replaced by the following:
Marginal note:Name of representative office
522.011 If the name under which a representative office of a foreign bank is or will be identifying itself in Canada is one referred to in any of paragraphs 530(1)(a) to (e), the Superintendent may, as the case may be,
(a) refuse to grant the approval referred to in paragraph 522(a);
(b) impose restrictions on the use of the name in Canada; or
(c) direct the foreign bank to change the name.
Marginal note:Cancellation of registration
522.02 The Superintendent may cancel the registration of a representative office of a foreign bank if
(a) the foreign bank requests the Superintendent to cancel the registration;
(b) the Superintendent is of the opinion that the representative office is not being operated, or the personnel of that office are not conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 522(a); or
(c) the Superintendent is of the opinion that the foreign bank has failed to comply with a restriction imposed under paragraph 522.011(b) or a direction made under paragraph 522.011(c).
Marginal note:2001, c. 9, s. 132
58. Section 522.07 of the Act is replaced by the following:
Marginal note:Investment in a financial institution
522.07 Subject to the requirements relating to approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity referred to in any of paragraphs 468(1)(a) to (i).
Marginal note:2001, c. 9, s. 132
59. (1) Subsection 522.08(1) of the Act is replaced by the following:
Marginal note:Permitted investments
522.08 (1) Subject to subsection (2) and the requirements relating to approval set out in Division 5, a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity, other than an entity referred to in any of paragraphs 468(1)(a) to (i), whose business is limited to one or more of the following:
(a) engaging in
(i) any financial service activity that a bank is permitted to engage in under any of paragraphs 409(2)(a) to (d), or
(ii) any other activity that a bank is permitted to engage in under section 410 or 411;
(b) acquiring or holding shares of, or ownership interests in, entities that a foreign bank or an entity associated with a foreign bank is permitted to acquire or hold under this Division or Division 8 — other than limited commercial entities, except in prescribed circumstances;
(b.1) acquiring or holding shares of, or ownership interests in, entities incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province;
(c) engaging in the provision of any services exclusively to any or all of the following, so long as the Canadian entity is also providing those services to the foreign bank or to any member of the foreign bank’s group, namely,
(i) the foreign bank,
(ii) any member of the foreign bank’s group,
(iii) any entity that is primarily engaged in the business of providing financial services,
(iv) any entity in which an entity referred to in subparagraph (iii) has a substantial investment and that is
(A) an entity in which a bank is permitted to acquire a substantial investment under section 468,
(B) an entity in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment under this section and section 522.07, or
(C) a prescribed entity, or
(v) any prescribed person, if it is doing so under prescribed terms and conditions, if any are prescribed;
(d) engaging in any activity that a bank is permitted to engage in — or in any other prescribed activity —, other than an activity referred to in paragraph (a) or (e), that relates to
(i) the promotion, sale, delivery or distribution of a financial product or financial service that is provided by the foreign bank or by any member of the foreign bank’s group, or
(ii) if a significant portion of the business of the Canadian entity involves an activity referred to in subparagraph (i), the promotion, sale, delivery or distribution of a financial product or financial service that is provided by any other entity that is primarily engaged in the business of providing financial services;
(e) engaging in the activities referred to in the definition “closed-end fund”, “mutual fund distribution entity”, “mutual fund entity” or “real property brokerage entity” in subsection 464(1); and
(f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed.
Marginal note:2001, c. 9, s. 132
(2) Paragraph 522.08(2)(d) of the Act is replaced by the following:
(d) acquiring or holding control of, or a substantial investment in, another Canadian entity unless
(i) in the case of a Canadian entity that is controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section or section 522.07 or 522.1 or Division 8, or
(ii) in the case of a Canadian entity that is not controlled by the foreign bank or the entity associated with a foreign bank, the foreign bank or the entity associated with a foreign bank itself would be permitted to acquire or hold control of, or a substantial investment in, the other Canadian entity under this section, section 522.07, any of paragraphs 522.1(a) or (c) to (e) or Division 8; or
(3) Section 522.08 of the Act is amended by adding the following after subsection (2):
Marginal note:Exception
(2.1) Despite paragraph (2)(a), a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or acquire or increase a substantial investment in, any entity that acts as a trustee of a trust if the entity has been authorized under the laws of a province to act as a trustee of a trust and the entity is
(a) a closed-end fund;
(b) a mutual fund entity; or
(c) an entity whose business is limited to engaging in one or more of the following:
(i) the activities of a mutual fund distribution entity,
(ii) any activity that a bank is permitted to engage in under paragraph 410(1)(c.2), and
(iii) the provision of investment counselling services and portfolio management services.
Marginal note:2001, c. 9, s. 132
60. Section 522.09 of the Act is replaced by the following:
Marginal note:Investment in a limited commercial entity — foreign bank
522.09 (1) Subject to the requirements relating to approval set out in Division 5, a foreign bank that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if
(a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(a) to (i);
(b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition “financial services entity” in subsection 507(1), determined in the prescribed manner;
(c) the Canadian entity does not engage in any leasing activities; and
(d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the foreign bank or any entity associated with the foreign bank.
Marginal note:Investment in a limited commercial entity — entity associated with a foreign bank
(2) Subject to the requirements relating to approval set out in Division 5, an entity that is associated with a foreign bank and that has a financial establishment in Canada may acquire or hold control of, or a substantial investment in, a Canadian entity if
(a) the Canadian entity is not an entity referred to in any of paragraphs 468(1)(a) to (i);
(b) the Canadian entity does not engage in more than the prescribed portion of — or if no portion is prescribed, 10 per cent of — the activities referred to in paragraphs 522.08(1)(a) to (f) or in any of paragraphs (a) to (h) of the definition “financial services entity” in subsection 507(1), determined in the prescribed manner;
(c) the Canadian entity does not engage in leasing activities; and
(d) in the opinion of the Minister, the Canadian entity engages in or carries on business that is the same as, or similar, related or incidental to, the business outside Canada of the entity associated with the foreign bank, the foreign bank or any other entity associated with the foreign bank.
Marginal note:Investment in holding body corporate — limited commercial entities
(3) A foreign bank or an entity associated with a foreign bank may acquire or hold control of, or a substantial investment in, a Canadian entity whose business is limited to acquiring or holding shares of, or ownership interests in, limited commercial entities.
61. Section 522.1 of the Act is amended by striking out the word “or” at the end of paragraph (c), by adding the word “or” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) if it does so in accordance with regulations made under paragraph 522.23(a) concerning specialized financing.
Marginal note:2001, c. 9, s. 132
62. Subsection 522.11(2) of the Act is replaced by the following:
Marginal note:Indirect investments through federal institutions
(2) If a foreign bank or an entity associated with a foreign bank acquires or holds control of, or a substantial investment in, a Canadian entity under subsection (1), none of the requirements relating to approval set out in Division 5 apply in respect of that acquisition or holding.
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