Bank Act (S.C. 1991, c. 46)

Financial Instruments and Notes

Marginal note:Availability of information

627.77 An institution shall disclose prescribed information with respect to a deposit-type instrument, a principal-protected note or a prescribed product by

• (a) making the information available

  • (i) at each of its branches in Canada and points of service where it offers any of these products, and

  • (ii) on each of its websites through which it offers these products in Canada; and

• (b) providing the information to any person who requests it.

Marginal note:Issuance

• 627.78 (1) An institution shall, before entering into an agreement with a person for the issuance of a deposit-type instrument, a principal-protected note or a prescribed product, disclose to the person

  • (a) the term of the product, how and when the principal is to be repaid and how and when the interest, if any, is to be paid;

  • (b) if the rate of interest in respect of the product is fixed, the annual rate of interest or, if the rate of interest is variable,

    • (i) how the rate of interest is determined,

    • (ii) the prime lending rate or the interest rate benchmark, as the case may be, that is used for the calculation of the rate of interest,

    • (iii) the prime lending rate or the interest rate benchmark in effect when the information is disclosed, and

    • (iv) how the person may obtain the rate of interest from the institution during the investment period;

  • (c) any charges applicable to the product and their impact on the interest payable;

  • (d) how interest is accrued and any limitations in respect of the interest payable;

  • (e) any risks associated with the product, including, if applicable, the risk that no interest may accrue;

  • (f) if the product relates to a deposit that is not eligible for deposit insurance coverage by the Canada Deposit Insurance Corporation, the fact that it is not eligible;

  • (g) whether the person may cancel their purchase of the product and, if so, how the purchase may be cancelled;

  • (h) whether the proposed agreement provides that the institution may amend a term or condition with respect to the product and, if so, in what circumstances;

  • (i) whether the manner in which the product is structured or administered may place the institution in a conflict of interest;

  • (j) any other information that could reasonably be expected to affect the person’s decision to enter into the agreement; and

  • (k) any prescribed information.

• Marginal note:New instrument issued without further agreement

  (2) If, after the maturity of a deposit-type instrument issued under an agreement referred to in subsection (1), an institution issues a new deposit-type instrument under that agreement, the institution shall disclose prescribed information to the person without delay after the instrument is issued.

Marginal note:Principal-protected note — no interest

627.79 If a principal-protected note ceases to be linked to an index or reference point that was to be used to determine the interest payable under the note and, as a result, no interest will be paid, the institution shall, without delay, disclose that fact to the person to whom the note was issued.

Marginal note:Current value

627.8 An institution shall disclose the following information without delay to a person who makes a request concerning the value of a product referred to in section 627.78 that was issued to the person:

• (a) in the case of a principal-protected note,

  • (i) the net asset value of the note on the day specified by the person and how that value is related to the interest payable under the note, or

  • (ii) the last available measure, before the day specified by the person, of the index or reference point on which the interest is determined and how that measure is related to the interest payable under the note;

• (b) in the case of a deposit-type instrument, the amount of the principal and accrued interest on the day on which the request was made; and

• (c) in the case of any prescribed product, prescribed information.

Marginal note:Amendments — deposit-type instruments or prescribed products

627.81 An institution shall, before any amendment that it makes to a term or condition with respect to a deposit-type instrument or a prescribed product takes effect, disclose the amendment and its potential impact on the interest payable to the person to whom the instrument or product was issued.

Marginal note:Amendments — principal-protected notes

627.82 An institution shall, before any amendment that it makes to a term or condition with respect to a principal-protected note that may have an impact on the interest payable under the note takes effect, disclose the amendment and its potential impact on the interest payable to the person to whom the note was issued. However, if it is not possible to make that disclosure before the time the amendment takes effect, the institution shall do so as soon as possible after that time.

Marginal note:Redemption or purchase before maturity

627.83 An institution shall

• (a) before redeeming or purchasing a principal-protected note before its maturity on the request of the person to whom it was issued, disclose to that person

  • (i) the value of the note on the last business day before the day on which the request is made, or the value of the note based on the last available measure of the index or reference point on which the interest is determined,

  • (ii) the amount of any charge or penalty,

  • (iii) the net amount that the person would have received for the redemption or purchase after deducting the amount referred to in subparagraph (ii) from the value of the note referred to in subparagraph (i), and

  • (iv) the time at which and the manner in which the value of the note will be calculated, and the fact that the value of the note may differ from the value referred to in subparagraph (i);

• (b) before redeeming a deposit-type instrument before its maturity on the request of the person to whom it was issued, disclose to that person the amount of the principal and accrued interest, the amount of any charge or penalty and the net amount payable by the institution on redemption; and

• (c) before redeeming any prescribed product before its maturity on the request of the person to whom it was issued, disclose to that person prescribed information.

Marginal note:Manner

627.84 For the purposes of sections 627.8 and 627.83, the institution shall disclose the information in the same manner in which the request is made unless otherwise directed by the person.

Advertisements

Marginal note:Rate of interest

627.85 An institution shall — in any advertisement in Canada in which it indicates the rate of interest that it offers on a deposit or debt obligation — disclose the manner in which the amount of interest is calculated and any circumstances that will affect the rate of interest, including the balance of a deposit account. The information shall be disclosed in the same manner in which the rate is indicated, whether visually or orally, or both.

Marginal note:Uninsured deposits

627.86 An authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) and a bank referred to in paragraph 413(1)(b) or (c) shall — in any advertisement in Canada in respect of deposits — disclose, visually or orally, that deposits with it are not insured by the Canada Deposit Insurance Corporation.

Marginal note:Financial instruments and notes

• 627.87 (1) An institution shall — in any advertisement in Canada for a product that is a deposit-type instrument, a principal-protected note or a prescribed product — disclose, visually or orally,

  • (a) how the public may obtain information about the product;

  • (b) if the advertisement refers to features of the product or the interest payable under it,

    • (i) the manner in which interest is to be accrued and any limitations in respect of the interest payable, and

    • (ii) the fact that the product relates to deposits that are not eligible to be insured by the Canada Deposit Insurance Corporation, if that is the case; and

  • (c) any prescribed information.

• Marginal note:Non-application

  (2) Subparagraph (1)(b)(ii) does not apply to an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) or a bank referred to in paragraph 413(1)(b) or (c).

• Marginal note:Market performance

  (3) An institution shall — in any advertisement in Canada for a principal-protected note in which it uses past market performance — disclose, visually or orally, the assumptions underlying any hypothetical examples used in the advertisement to represent that performance, and the fact that past market performance is not an indicator of future market performance.

• Marginal note:Fair representation

  (4) The institution shall, in the advertisements referred to in subsection (3), represent the past market performance fairly and only use realistic assumptions to underlie hypothetical examples.

Credit

Marginal note:Availability of information

627.88 An institution shall disclose prescribed information with respect to a credit agreement by

• (a) making the information available

  • (i) at each of its branches in Canada and points of service, and

  • (ii) on each of its websites through which it offers products or services in Canada; and

• (b) providing the information to any person who requests it.

Marginal note:Agreement — natural persons

• 627.89 (1) An institution shall, before entering into a credit agreement with a natural person other than for business purposes, disclose to the person

  • (a) the cost of borrowing, as calculated and expressed in accordance with section 627.9;

  • (b) particulars of the person’s rights and obligations;

  • (c) any charges or penalties that may be imposed on the person;

  • (d) in the case of a line of credit or credit card account, the circumstances in which the institution shall send the person an alert, in accordance with section 627.13; and

  • (e) any prescribed information.

• Marginal note:Agreement — other persons

  (2) An institution shall, before entering into a credit agreement with a person, other than a person referred to in subsection (1), disclose to the person prescribed information.

• Marginal note:Applications for credit, payment or charge card

  (3) An institution shall disclose in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards

  • (a) in the case of a credit card,

    • (i) a list of all non-interest charges,

    • (ii) the information referred to in paragraph (1)(a),

    • (iii) the day on which interest begins to accrue and information concerning any grace period that applies, and

    • (iv) any prescribed information; and

  • (b) in the case of a payment or charge card, any prescribed information.

• Marginal note:Subsequent disclosure

  (4) An institution shall, after entering into a credit agreement with a person, disclose prescribed information to the person.

• Marginal note:Amendments

  (5) An institution shall disclose to the person with whom it has entered into a credit agreement

  • (a) any prescribed amendment to the terms or conditions of the credit agreement; and

  • (b) any prescribed information resulting from the amendment.

• Marginal note:Renewal

  (6) An institution shall disclose to the person with whom it has entered into a credit agreement any prescribed information respecting the renewal of the credit agreement.

Marginal note:Calculating borrowing costs

627.9 The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are fulfilled and shall be expressed as a rate per annum and, in the prescribed circumstances, as an amount in dollars and cents.

Marginal note:Advertisements

627.91 An institution that makes a prescribed representation in an advertisement in Canada for a product that may be obtained by a natural person under a credit agreement shall disclose prescribed information in the advertisement.

Prepaid Payment Products

Marginal note:Issuance

• 627.92 (1) An institution shall, before entering into an agreement with a person for the issuance of a prepaid payment product, disclose to the person

  • (a) the name of the issuing institution;

  • (b) the day on which the product expires, if any;

  • (c) if it is a promotional product, the day, if any, on which the person’s right to use the funds that are loaded on the product will expire;

  • (d) a toll-free telephone number that can be used to make inquiries about the prepaid payment product, including its balance and the terms or conditions with respect to the product, and to make complaints;

  • (e) the following restrictions on the use of the product, if imposed by the issuing institution:

    • (i) the fact that the product is not reloadable,

    • (ii) the fact that the product cannot be used to make withdrawals, and

    • (iii) any other restriction that could reasonably be expected to affect the person’s decision to enter into the agreement;

  • (f) all charges that may be imposed on the person by the issuing institution in respect of the product;

  • (g) if the funds that are loaded on the product are not insured by the Canada Deposit Insurance Corporation, a statement to that effect;

  • (h) a statement indicating

    • (i) in the case of a promotional product, either that the person’s right to use the funds that are loaded on the product will not expire, or that that right will expire, along with the expiry date, as the case may be, and

    • (ii) in the case of any other prepaid payment product, that the person’s right to use the funds that are loaded on the product will not expire;

  • (i) a website address where the information referred to in paragraphs (a) and (d) to (g) can be obtained; and

  • (j) any prescribed information.

• Marginal note:Means of disclosure

  (2) The institution shall disclose the information set out in paragraphs (1)(a) to (d) and (i) by setting it out directly on the prepaid payment product or, if the product is electronic, by disclosing it electronically on the person’s request.