Bank Act (S.C. 1991, c. 46)

Subordinated Indebtedness

Marginal note:Restriction on subordinated indebtedness

• 723 (1) A bank holding company shall not issue subordinated indebtedness unless the subordinated indebtedness is fully paid for in money or, with the approval of the Superintendent, in property.

• Marginal note:References to subordinated indebtedness

  (2) A person shall not in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a bank holding company refer to the subordinated indebtedness otherwise than as subordinated indebtedness.

• Marginal note:Other currencies

  (3) When issuing subordinated indebtedness, a bank holding company may provide that any aspect of the subordinated indebtedness relating to money or involving the payment of or the liability to pay money in relation thereto be in a currency other than that of Canada including, without restricting the generality of the foregoing, the payment of any interest thereon.

Security Certificates and Transfers

Marginal note:Sections 81 to 135 apply

724 Sections 81 to 135 apply in respect of bank holding companies, subject to the following:

• (a) references to “bank” in those sections are to be read as references to “bank holding company”;

• (b) references to “this Act” in those sections are to be read as references to “this Part”;

• (c) references to “Part VII” in those sections are to be read as references to “Division 7 of Part XV”;

• (d) references to “this Part” in those sections are to be read as references to “this Division”;

• (e) the reference to “subsections 137(5) to (7) and sections 138 to 141 and 145” in subsection 93(1) is to be read as a reference to “subsections 726(5) to (7) and sections 727 to 730 and 734”; and

• (f) the reference to “section 71 or 77” in subsection 97(3) is to be read as a reference to “section 715 or 720”.

DIVISION 6Corporate Governance

Shareholders

Marginal note:Place of meetings

• 725 (1) Meetings of shareholders of a bank holding company shall be held at the place within Canada provided for in the by-laws of the bank holding company or, in the absence of any such provision, at the place within Canada that the directors determine.

• Marginal note:Participation by electronic means

  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank holding company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Part to be present at the meeting.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

Marginal note:Calling meetings

• 726 (1) The directors of a bank holding company

  • (a) shall, after the meeting called pursuant to subsection 701(1), call the first annual meeting of shareholders of the bank holding company, which meeting must be held not later than six months after the end of the first financial year of the bank holding company, and subsequently call an annual meeting of shareholders, which meeting must be held not later than six months after the end of each financial year; and

  • (b) may at any time call a special meeting of shareholders.

• Marginal note:Order to delay calling annual meeting

  (2) Despite subsection (1), the bank holding company may apply to the court for an order extending the time for calling an annual meeting.

• Marginal note:Obligation to notify Superintendent

  (3) The bank holding company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.

• Marginal note:Superintendent’s right to appear

  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.

• Marginal note:Authority to fix record date

  (5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to

  • (a) receive payment of a dividend;

  • (b) participate in a liquidation distribution;

  • (c) receive notice of a meeting of shareholders; or

  • (d) vote at a meeting of shareholders.

• Marginal note:Determination of record date

  (6) If no record date is fixed,

  • (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is

    • (i) at the close of business on the day immediately preceding the day on which the notice is given, or

    • (ii) if no notice is given, the day on which the meeting is held; and

  • (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

• Marginal note:Notice of record date

  (7) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by

  • (a) advertisement in a newspaper in general circulation in the place where the bank holding company’s head office is situated and in each place in Canada where the bank holding company has a transfer agent or where a transfer of its shares may be recorded; and

  • (b) written notice to each stock exchange in Canada on which the bank holding company’s shares are listed for trading.

Marginal note:Notice of meeting

• 727 (1) Notice of the time and place of a meeting of shareholders of a bank holding company shall be sent within the prescribed period to

  • (a) each shareholder entitled to vote at the meeting;

  • (b) each director;

  • (c) the auditor of the bank holding company; and

  • (d) the Superintendent.

• Marginal note:Exception

  (1.1) In the case of a bank holding company that is not a distributing bank holding company, notice may be sent within any shorter period specified in its by-laws.

• Marginal note:Number of eligible votes

  (2) A bank holding company with equity of twelve billion dollars or more shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining those shareholders entitled to receive the notice of meeting, or if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.

• Marginal note:Publication in newspaper

  (3) In addition to the notice required under subsection (1), where any class of shares of a bank holding company is publicly traded on a recognized stock exchange in Canada, notice of the time and place of a meeting of shareholders shall be published once a week for at least four consecutive weeks before the date of the meeting in a newspaper in general circulation in the place where the head office of the bank holding company is situated and in each place in Canada where the bank holding company has a transfer agent or where a transfer of the bank holding company’s shares may be recorded.

Marginal note:Notice not required

• 728 (1) A notice of a meeting is not required to be sent to shareholders who are not registered on the records of the bank holding company or the bank holding company’s transfer agent on the record date fixed under paragraph 726(5)(c) or determined under paragraph 726(6)(a).

• Marginal note:Effect of default

  (2) Failure to receive a notice of a meeting of shareholders does not deprive a shareholder of the right to vote at the meeting.

Marginal note:Notice of adjourned meeting

• 729 (1) If a meeting of shareholders is adjourned for less than thirty days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.

• Marginal note:Notice where adjournment is longer

  (2) If a meeting of shareholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the continuation of the meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 156.04(1) does not apply.

Marginal note:Special business

• 730 (1) All matters dealt with at a special meeting of shareholders and all matters dealt with at an annual meeting of shareholders, except consideration of the financial statements, report of the auditor, election of directors, remuneration of directors and reappointment of the incumbent auditor, are deemed to be special business.

• Marginal note:Notice of special business

  (2) Notice of a meeting of shareholders at which special business is to be transacted must

  • (a) state the nature of the special business in sufficient detail to permit a shareholder to form a reasoned judgment thereon; and

  • (b) contain the text of any special resolution to be submitted to the meeting.

Marginal note:Waiver of notice

• 731 (1) A shareholder and any other person entitled to attend a meeting of shareholders may in any manner waive notice of a meeting of shareholders.

• Marginal note:Attendance is waiver

  (2) Attendance at a meeting of shareholders is a waiver of notice of the meeting, except when a person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Marginal note:Proposals

• 732 (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted at an annual meeting of shareholders may

  • (a) submit to the bank holding company notice of any matter that they propose to raise at the meeting (in this section and section 733 referred to as a “proposal”); and

  • (b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.

• Marginal note:Eligibility to submit proposal

  (1.1) To be eligible to submit a proposal a person shall

  • (a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the bank holding company’s outstanding shares; or

  • (b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the bank holding company’s outstanding shares.

• Marginal note:Information to be provided

  (1.2) A proposal is to be accompanied by the following information:

  • (a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and

  • (b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired.

• Marginal note:Information not part of proposal

  (1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3).

• Marginal note:Proof may be required

  (1.4) If the bank holding company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).

• Marginal note:Circulation of proposal

  (2) A bank holding company that solicits proxies shall set out in the management proxy circular required by subsection 156.05(1) or attach to it any proposal submitted for consideration at a meeting of shareholders.

• Marginal note:Supporting statement

  (3) At the request of the person who submits a proposal, the bank holding company shall set out in the management proxy circular or attach to it the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.

• Marginal note:Nomination of directors

  (4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the bank holding company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented.

• Marginal note:Exemption

  (5) A bank holding company is not required to comply with subsections (2) and (3) if

  • (a) the proposal is not submitted to the bank holding company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders;

  • (b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the bank holding company or its directors, officers or security holders;

  • (b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the bank holding company;

  • (c) the person submitting the proposal failed within the prescribed period before the bank holding company receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been set out in or attached to a management proxy circular;

  • (d) substantially the same proposal was set out in or attached to a management proxy circular or dissident’s proxy circular relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or

  • (e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.

• Marginal note:Bank holding company may refuse to include proposal

  (5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the bank holding company is not required to set out any proposal submitted by that person in or attach it to a management proxy circular for any meeting held within the prescribed period after the day of the meeting.

• Marginal note:Immunity for proposal and statement

  (6) No bank holding company or person acting on behalf of a bank holding company incurs any liability by reason only of circulating a proposal or statement in compliance with subsections (2) and (3).