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
63. (1) Subsection 522.14(1) of the Act is replaced by the following:
Marginal note:Temporary investments
522.14 (1) Subject to sections 522.21 and 522.211, a foreign bank or an entity associated with a foreign bank may, by way of temporary investment, acquire or hold control of, or a substantial investment in, a Canadian entity if the foreign bank or the entity associated with a foreign bank has a financial establishment in Canada or would, by virtue of the temporary investment, have a financial establishment in Canada.
Marginal note:2001, c. 9, s. 132
(2) Subsection 522.14(4) of the Act is replaced by the following:
Marginal note:Exception
(4) If a foreign bank, or an entity associated with a foreign bank, acquires or holds, by way of a temporary investment, control of, or a substantial investment in, a Canadian entity for which the approval of the Minister would have been required under any of paragraphs 522.22(1)(a) to (e) if the foreign bank or the entity associated with a foreign bank had acquired the control or the substantial investment under section 522.07 or 522.08, the foreign bank or the entity associated with a foreign bank shall, within 90 days after acquiring control, or after acquiring the substantial investment,
(a) apply to the Minister for approval to retain control of the Canadian entity or to continue to hold the substantial investment in the Canadian entity for a period specified by the Minister or for an indeterminate period on any terms and conditions that the Minister considers appropriate; or
(b) do all things necessary to ensure that, on the expiry of the 90 days, it no longer controls the Canadian entity or holds a substantial investment in the Canadian entity.
Marginal note:2001, c. 9, s. 132
64. Section 522.18 of the Act is replaced by the following:
Marginal note:Business of a cooperative credit society and dealing in securities
522.18 (1) Subject to the requirements relating to approval set out in Division 5, a foreign bank — or an entity associated with a foreign bank —
(a) that is a foreign cooperative credit society may, in Canada, engage in or carry on the business of a cooperative credit society, so long as that business is engaged in or carried on in accordance with provincial laws relating to cooperative credit societies; or
(b) that is a foreign securities dealer may, in Canada, engage in or carry on the business of dealing in securities, or the business of providing investment counselling services and portfolio management services, so long as that business is engaged in or carried on in accordance with provincial laws relating to securities dealing or investment counselling and portfolio management.
Marginal note:Business of investment counselling services and portfolio management services
(2) Subject to the requirements relating to approval set out in Division 5, an entity associated with a foreign bank incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province, that engages in or carries on, outside Canada, the business of providing investment counselling services and portfolio management services may engage in or carry on that business in Canada so long as that business in Canada is engaged in or carried on in accordance with provincial laws relating to investment counselling and portfolio management.
Marginal note:2001, c. 9, s. 132
65. The portion of subsection 522.19(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Limited commercial branches
522.19 (1) Subject to the requirements relating to approval set out in Division 5, and subject to subsection (2), a foreign bank, or an entity that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province and that is associated with a foreign bank, that has a financial establishment in Canada may maintain a branch in Canada or engage in or carry on business in Canada, so long as
Marginal note:2001, c. 9, s. 132
66. The headings before section 522.2 of the Act are replaced by the following:
Division 5Approvals
Application
Marginal note:2001, c. 9, s. 132
67. Section 522.21 of the Act is replaced by the following:
Approval to Have a Financial Establishment in Canada
Marginal note:No financial establishment without approval — foreign bank
522.21 (1) A foreign bank may not, without the prior written approval of the Minister, have a financial establishment in Canada.
Marginal note:Exception
(2) Subsection (1) does not apply if the foreign bank or any entity associated with the foreign bank
(a) is an authorized foreign bank;
(b) is a foreign insurance company;
(c) controls or is a major owner of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f); or
(d) has already received the approval of the Minister to have a financial establishment in Canada.
Marginal note:Deeming
(3) A foreign bank that was the subject of a designation order under subsection 508(1) as that subsection read immediately before the coming into force of this subsection and whose designation order has not been revoked is deemed to have received the approval of the Minister to have a financial establishment in Canada.
Marginal note:No financial establishment without approval — associated entity
522.211 (1) An entity that is associated with a foreign bank may not, without the prior written approval of the Minister, have a financial establishment in Canada.
Marginal note:Exception
(2) Subsection (1) does not apply if the entity associated with a foreign bank, the foreign bank or any other entity associated with the foreign bank
(a) is an authorized foreign bank;
(b) is a foreign insurance company;
(c) controls or is a major owner of a Canadian entity referred to in any of paragraphs 468(1)(a) to (f); or
(d) has already received the approval of the Minister to have a financial establishment in Canada.
Marginal note:Deeming
(3) An entity associated with a foreign bank that was the subject of a designation order under subsection 508(1) as that subsection read immediately before the coming into force of this subsection and whose designation order has not been revoked is deemed to have received the approval of the Minister to have a financial establishment in Canada.
Approvals in Respect of Investments and Activities
Marginal note:2001, c. 9, s. 132
68. (1) Subsection 522.22(1) of the Act is replaced by the following:
Marginal note:Minister’s approval
522.22 (1) Subject to subsection (2) and the regulations, a foreign bank or an entity associated with a foreign bank may not, without the prior written approval of the Minister,
(a) acquire control of a Canadian entity referred to in any of paragraphs 468(1)(g) to (i) from a person who is not a member of the foreign bank’s group;
(b) acquire control of a Canadian entity whose business includes one or more of the activities referred to in paragraph 522.08(1)(a) and that engages, as part of its business, in any financial intermediary activity that exposes the Canadian entity to material market or credit risk — including a finance entity — if the control is acquired from an entity referred to in any of paragraphs 468(1)(a) to (f) that is not a member of the foreign bank’s group, but does not include a Canadian entity whose activities are limited to the activities of one or more of the following entities:
(i) a factoring entity as defined in the regulations, or
(ii) a financial leasing entity;
(c) acquire or hold control of, or a substantial investment in, a Canadian entity whose business includes one or more of the activities referred to in paragraph 522.08(1)(d);
(d) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in Canada in an activity described in paragraph 410(1)(c);
(d.1) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in an activity described in paragraph 410(1)(c.1);
(e) acquire or hold control of, or a substantial investment in, a Canadian entity that engages in an activity prescribed for the purposes of paragraph 522.08(1)(f);
(f) engage in or carry on a business permitted by paragraph 522.18(1)(a) or (b) or subsection 522.18(2);
(g) acquire or hold control of, or a substantial investment in, a limited commercial entity;
(h) maintain a branch or engage in or carry on a business permitted by section 522.19; or
(i) engage in an activity referred to in paragraph 510(1)(c) in the circumstances described in paragraph 513(1)(a) or (2)(c).
(2) Section 522.22 of the Act is amended by adding the following after subsection (4):
Marginal note:Application
(5) Subsection (1) applies regardless of whether or not the approval of the Minister is required under section 522.21 or 522.211.
Marginal note:2001, c. 9, s. 132
69. Section 522.23 of the Act is replaced by the following:
Marginal note:Regulations
522.23 The Governor in Council may make regulations for the purposes of this Part and, in particular, may make regulations
(a) concerning specialized financing;
(b) for the purposes of subsection 522.22(1) or (2), permitting the acquisition or holding of control or the acquisition or holding of substantial investments, or prescribing the circumstances under which either of those subsections does not apply or the foreign banks, entities associated with foreign banks or other entities in respect of which either of those subsections does not apply, including prescribing foreign banks, entities associated with foreign banks or other entities on the basis of the activities they engage in;
(c) restricting the ownership by foreign banks, or entities associated with foreign banks, of shares in a body corporate or of ownership interests in an unincorporated entity under Division 3 or 4 and imposing terms and conditions applicable to foreign banks, or entities associated with foreign banks, that own such shares or interests;
(d) in respect of sections 409 to 411, for the purposes of paragraph 522.08(1)(a), subsection 522.22(1) and section 522.24;
(e) respecting the calculation referred to in subsection 508(2), including regulations respecting the classes of entities associated with a foreign bank, and the classes of foreign banks described in any of subparagraphs 508(1)(a)(i) to (iii) that are associated with a foreign bank, that are to be taken into account in that calculation;
(f) defining any terms in subsection 508(2);
(g) respecting exemptions under subsection 508(3); and
(h) defining “factoring entity” for the purpose of paragraph 522.22(1)(b).
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