Bank Act

Marginal note:Reduction of capital

• 75 (1) The stated capital of a bank that is not a federal credit union may be reduced by special resolution.

• Marginal note:Reduction of capital — federal credit unions

  (1.1) The stated capital of a federal credit union may be reduced by special resolution of its members and, if it has issued shares, by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the special resolution.

• Marginal note:Limitation

  (2) A bank shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the bank is, or the reduction would cause the bank to be, in contravention of any regulation referred to in subsection 485(1) or (2) or any direction made pursuant to subsection 485(3).

• Marginal note:Contents of special resolution

  (3) A special resolution to reduce the stated capital of a bank shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.

• Marginal note:Approval by Superintendent

  (4) A special resolution to reduce the stated capital of a bank has no effect until it is approved in writing by the Superintendent.

• Marginal note:Exception

  (4.1) Subsection (4) does not apply if

  • (a) the reduction in the stated capital is made solely as a result of changes made to the accounting principles referred to in subsection 308(4); and

  • (b) there is to be no return of capital to shareholders or members, as the case may be, as a result of the reduction.

• Marginal note:Conditions for approval

  (5) No approval to reduce the stated capital of a bank may be given by the Superintendent unless application therefor is made within three months after the time of the passing of the special resolution and a copy of the special resolution, together with a notice of intention to apply for approval, has been published in the Canada Gazette.

• Marginal note:Statements to be submitted

  (6) In addition to evidence of the passing of a special resolution to reduce the stated capital of a bank and of the publication thereof, statements showing

  • (a) the number of the bank’s shares or membership shares, as the case may be, issued and outstanding,

  • (b) the results of the voting,

  • (c) the bank’s assets and liabilities, and

  • (d) the reason why the bank seeks the reduction of capital

  shall be submitted to the Superintendent at the time of the application for approval of the special resolution.