Bank Act

Marginal note:Restriction on voting rights

• 392 (1) If, with respect to any bank, a particular person contravenes section 372, subsection 373(1), 374(1) or 375(1), section 376.1 or 376.2, subsection 377(1) or section 377.1 or 377.2 or fails to comply with an undertaking referred to in subsection 390(2) or with any term or condition imposed under section 397, no person, and no entity controlled by the particular person, shall, in person, by proxy or by delegate, exercise any voting rights

  • (a) that are attached to shares of the bank beneficially owned by the particular person or any entity controlled by the particular person;

  • (a.1) that may be exercised by a member of a federal credit union if the bank is a federal credit union; or

  • (b) that are subject to an agreement entered into by the particular person, or any entity controlled by the particular person, pertaining to the exercise of the voting rights.

• Marginal note:Subsection (1) ceases to apply

  (2) Subsection (1) ceases to apply in respect of a person when, as the case may be,

  • (a) the shares or membership shares to which the contravention relates have been disposed of;

  • (b) the person ceases to control the bank within the meaning of paragraph 3(1)(d);

  • (c) if the person failed to comply with an undertaking referred to in subsection 390(2), the bank complies with section 385; or

  • (d) if the person failed to comply with a term or condition imposed under section 397, the person complies with the term or condition.

• Marginal note:Saving

  (3) Despite subsection (1), if a person contravenes subsection 374(1) by reason only that, as a result of an event that has occurred and is continuing and is not within the control of the person, shares of the bank beneficially owned by the person or by any entity controlled by the person acquire voting rights in such number so as to cause the person to be a major shareholder of the bank, the Minister may, after consideration of the circumstances, permit the person and any entity controlled by the person to exercise voting rights, in person or by proxy, in respect of any class of voting shares of the bank beneficially owned by them that do not in aggregate exceed 20 per cent of the voting rights attached to that class of voting shares.