Bank Act (S.C. 1991, c. 46)

Asset Maintenance

Marginal note:Order re: asset maintenance

617 Where, in the opinion of the Superintendent, it is necessary for the protection of rights of depositors and creditors of the authorized foreign bank in respect of its business in Canada, the Superintendent may, by order,

• (a) subject to any terms and conditions that the Superintendent considers necessary, direct an authorized foreign bank to maintain in Canada assets of any type and in any amount that the Superintendent may specify; and

• (b) require that the assets referred to in paragraph (a) be deposited with a Canadian financial institution approved by the Superintendent under a deposit agreement approved by the Superintendent.

Disqualification and Removal of Principal Officers

Marginal note:Application

• 617.1 (1) This section applies only in respect of an authorized foreign bank

  • (a) that has been notified by the Superintendent that this section applies to it where the authorized foreign bank is subject to measures designed to protect the interests of its depositors and creditors in respect of its business in Canada, which measures

    • (i) have been specified by the Superintendent by way of conditions or limitations in respect of the order approving the commencement and carrying on of business in Canada by the authorized foreign bank, or

    • (ii) are contained in a prudential agreement entered into under section 614.1 or an undertaking given by the authorized foreign bank to the Superintendent; or

  • (b) that is the subject of a direction made under section 615 or an order made under section 617.

• Marginal note:Information to be provided

  (2) An authorized foreign bank shall provide the Superintendent with the name of any person who has been selected by the authorized foreign bank for appointment as principal officer, together with such other information about the background, business record and experience of the person as the Superintendent may require.

• Marginal note:When information to be provided

  (3) The information required by subsection (2) shall be provided to the Superintendent at least 30 days prior to the date of the appointment or within any shorter period that the Superintendent may allow.

• Marginal note:Disqualification

  (4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold the position of principal officer, the Superintendent may, by order, disqualify the person from being appointed to that office.

• Marginal note:Risk of prejudice

  (5) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada would likely be prejudiced if the person were to take office.

• Marginal note:Representations may be made

  (6) The Superintendent must in writing notify the person concerned and the authorized foreign bank of an order that the Superintendent proposes to make under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

• Marginal note:Prohibition

  (7) If an order is made under subsection (4) disqualifying a person from being appointed as principal officer, the person shall not be, and the authorized foreign bank shall not permit the person to be, appointed to that position.

Marginal note:Removal

• 617.2 (1) The Superintendent may, by order, remove a person from office as the principal officer of an authorized foreign bank if the Superintendent is of the opinion that the person is not suitable to hold that office

  • (a) on the basis of the competence, business record, experience, conduct or character of the person; or

  • (b) because the person has contravened or, by action or negligence, has contributed to the contravention of

    • (i) this Act or the regulations made under it,

    • (ii) a direction made under section 615,

    • (iii) an order made under section 617,

    • (iv) a condition or limitation in respect of the order approving the commencement and carrying on of business in Canada by the authorized foreign bank, or

    • (v) a prudential agreement entered into under section 614.1 or an undertaking given by the authorized foreign bank to the Superintendent.

• Marginal note:Risk of prejudice

  (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada have been or are likely to be prejudiced by the person’s holding office as principal officer.

• Marginal note:Representations may be made

  (3) The Superintendent must in writing notify the principal officer and the authorized foreign bank of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

• Marginal note:Suspension

  (4) If the Superintendent is of the opinion that the public interest is likely to be prejudiced by the principal officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the principal officer. The suspension may not extend beyond 10 days after the expiration of that period.

• Marginal note:Notice of order

  (5) The Superintendent shall, without delay, notify the principal officer and the authorized foreign bank of a removal order or suspension order.

• Marginal note:Consequences of removal order

  (6) The principal officer ceases to hold that office as of the date the removal order is made or any later date specified in the order.

• Marginal note:Appeal

  (7) The principal officer or the authorized foreign bank may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.

• Marginal note:Powers of Federal Court

  (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.

• Marginal note:Order not stayed by appeal

  (9) A removal order is not stayed by an appeal.

Supervisory Intervention

Meaning of assets

618 For the purposes of sections 619 to 627, assets, in relation to an authorized foreign bank, means

• (a) any asset in respect of its business in Canada, including the assets referred to in subsection 582(1) and section 617 and the assets under its administration; and

• (b) any other asset in Canada of the authorized foreign bank.

Marginal note:Superintendent may take control

• 619 (1) Subject to this Act, where any of the circumstances described in subsection (2) exist in respect of an authorized foreign bank or the business in Canada of an authorized foreign bank, the Superintendent may

  • (a) take control, for a period not exceeding sixteen days, of the assets of the authorized foreign bank; or

  • (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,

    • (i) take control, for a period exceeding sixteen days, of the assets of the authorized foreign bank, or

    • (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph.

• Marginal note:Circumstances for taking control

  (2) Control by the Superintendent under subsection (1) may be taken in respect of an authorized foreign bank where

  • (a) the authorized foreign bank has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (b) the authorized foreign bank in respect of its business in Canada has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (c) [Repealed, 2001, c. 9, s. 170]

  • (d) the assets of the authorized foreign bank in relation to its business in Canada are not, in the opinion of the Superintendent, sufficient to give adequate protection to the depositors and creditors of the authorized foreign bank in respect of its business in Canada;

  • (e) an asset appearing on the books or records of the authorized foreign bank in respect of its business in Canada or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;

  • (f) the authorized foreign bank has failed to comply with an order of the Superintendent under section 617;

  • (g) in the opinion of the Superintendent, any other state of affairs exists in respect of the authorized foreign bank that may be materially prejudicial to the interests of the authorized foreign bank’s depositors or creditors in respect of its business in Canada or to those of the owners of any assets under the authorized foreign bank’s administration in respect of its business in Canada, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the authorized foreign bank or its holding body corporate;

  • (h) in the opinion of the Superintendent, the continued operation of the authorized foreign bank in Canada would be materially prejudicial to its integrity or security in relation to its business in Canada; or

  • (i) in the opinion of the Superintendent, the continued operation of the authorized foreign bank in Canada would pose a risk to national security.

• Marginal note:Minister’s powers

  (2.1) Subject to this Act, the Minister may, for reasons related to national security, direct the Superintendent to

  • (a) take control, for a period not exceeding 16 days, of the assets of the authorized foreign bank;

  • (b) take control, for a period exceeding 16 days, of the assets of the authorized foreign bank; or

  • (c) if control of assets has been taken under paragraph (a), continue the control beyond the 16 days referred to in that paragraph.

• Marginal note:Notice of proposed action

  (3) The Superintendent shall notify an authorized foreign bank of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding ten days after it receives the notice.

• Marginal note:Notice — up to 16 days

  (3.1) If the Superintendent takes control of the assets of an authorized foreign bank under paragraph (2.1)(a), the Superintendent shall notify the authorized foreign bank that control has been taken at the direction of the Minister.

• Marginal note:Notice — more than 16 days

  (3.2) If the Minister is considering whether to exercise the powers under paragraph (2.1)(b) or (c), the Superintendent shall notify the authorized foreign bank of the action that is being considered and of its right to make written representations to the Minister within the time specified in the notice, not exceeding 10 days after it receives the notice.

• Marginal note:Notice — Committee and Review Agency

  (3.3) Within 30 days after exercising any of the powers under subsection (2.1), the Minister shall notify

  • (a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act; and

  • (b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.

• Marginal note:Objectives of Superintendent

  (4) If the Superintendent has control under subsection (1) or (2.1) of the assets of an authorized foreign bank referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada.

• Marginal note:Powers of Superintendent

  (5) If the Superintendent has control under subsection (1) or (2.1) of the assets of an authorized foreign bank referred to in that subsection,

  • (a) neither the authorized foreign bank nor any person acting on its behalf shall deal in any way with any of the assets without the prior approval of the Superintendent or a representative designated by the Superintendent; and

  • (b) no person acting on behalf of the authorized foreign bank shall have access to any cash or securities held in Canada by the authorized foreign bank without the prior approval of the Superintendent or a representative designated by the Superintendent.

• Marginal note:Persons to assist

  (6) If the Superintendent takes control of the assets of an authorized foreign bank under subparagraph (1)(b)(i) or (ii) or paragraph (2.1)(b) or (c), the Superintendent may appoint one or more persons to assist in the control of the assets.

Marginal note:Expiration of control

• 620 (1) Control by the Superintendent under subsection 619(1) of the assets of an authorized foreign bank expires on the day on which a notice by the Superintendent is sent to the principal officer of the authorized foreign bank stating that the Superintendent is of the opinion that the circumstances leading to the taking of control of the assets by the Superintendent have been substantially rectified and that the authorized foreign bank can resume control of its assets.

• Marginal note:Expiration of control — Minister’s direction

  (2) Control by the Superintendent under subsection 619(2.1) of the assets of an authorized foreign bank expires on the day on which a notice by the Superintendent is sent to the principal officer of the authorized foreign bank stating that the Minister is of the opinion, on the recommendation of the Superintendent, that corrective measures have been taken in response to the reasons related to national security and that the authorized foreign bank can resume control of its assets.

Marginal note:Superintendent may request winding-up

621 The Superintendent may, at any time before the receipt of a request under section 622 to relinquish control of the assets of an authorized foreign bank, request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the authorized foreign bank, if the assets of the authorized foreign bank are under the control of the Superintendent under subparagraph 619(1)(b)(i) or (ii) or paragraph 619(2.1)(b) or (c).

Marginal note:Requirement to relinquish control

622 If no action has been taken by the Superintendent under section 621 and, after 30 days following the taking of control by the Superintendent under subsection 619(1) or (2.1) of the assets of an authorized foreign bank, the Superintendent receives from the principal officer of the authorized foreign bank a notice in writing requesting the Superintendent to relinquish control, the Superintendent shall, not later than 12 days after receipt of the notice,

• (a) comply with the request; or

• (b) request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the authorized foreign bank.