Trust and Loan Companies Act (S.C. 1991, c. 45)

400 and 400.1 [Repealed, 1994, c. 47, s. 210]

DIVISION IIIDirections

Marginal note:Disposition of shareholdings

• 401 (1) If, with respect to any company, a person contravenes section 375 or 375.1 or fails to comply with an undertaking referred to in subsection 384(2) or with any terms and conditions imposed under section 389, the Minister may, if the Minister deems it in the public interest to do so, by order, direct that person and any person controlled by that person to dispose of any number of shares of the company beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by that person that is specified in the order.

• Marginal note:Representations

  (2) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the company concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction.

• Marginal note:Appeal

  (3) Any person with respect to whom a direction has been made under subsection (1) may, within thirty days after the date of the direction, appeal the matter in accordance with section 530.

• (4) [Repealed, 2001, c. 9, s. 529]

Marginal note:Disposition — threat to integrity or security

• 401.1 (1) If the Minister is of the opinion that a person’s holding or beneficial ownership of shares of a company poses a threat to the integrity or security of the company or the financial system in Canada or a threat to national security, the Minister may, by order, direct that person and any person controlled by that person to dispose of any number of shares of the company held or beneficially owned by any of the persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by the person that is specified in the order.

• Marginal note:Suspension of rights

  (2) A direction made under subsection (1) may also suspend any of the rights under Part VI attached to the shares referred to in that subsection until the shares are disposed of in accordance with the direction.

• Marginal note:Representations

  (3) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the company concerned with a reasonable opportunity to make representations.

• Marginal note:Temporary direction

  (4) If, in the Minister’s opinion, the length of time required for representations to be made under subsection (3) might be prejudicial to the public interest, the Minister may make a temporary direction to suspend any of the rights under Part VI attached to any of the shares referred to in subsection (1).

• Marginal note:Cessation of effect

  (5) A temporary direction ceases to have effect on the earlier of

  • (a) the expiry of 30 days after the day on which it takes effect or of a shorter period that is specified in the temporary direction, and

  • (b) if a direction is made under subsection (1) in respect of the shares, the day on which that direction takes effect.

• Marginal note:Appeal

  (6) Any person with respect to whom a direction has been made under subsection (1) may, within 30 days after the day on which the direction was made, appeal the matter in accordance with section 530.

• Marginal note:Notice — Committee and Review Agency

  (7) If a direction has been made under subsection (1) or (4) for reasons related to national security, the Minister shall, within 30 days after the day on which the direction was made, 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:Application to court

• 402 (1) If a person fails to comply with a direction made under subsection 396(7), 401(1) or 401.1(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction.

• Marginal note:Court order

  (2) A court may, on an application under subsection (1), make such order as the circumstances require to give effect to the terms of the direction and may, without limiting the generality of the foregoing, require the company concerned to sell the shares that are the subject-matter of the direction.

• Marginal note:Appeal

  (3) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court.

General Provisions

Marginal note:Interest of securities underwriter

403 This Part does not apply to a securities underwriter in respect of shares of a body corporate or ownership interests in an unincorporated entity that are acquired by the underwriter in the course of a distribution to the public of those shares or ownership interests and that are held by the underwriter for a period of not more than six months.

Marginal note:Arrangements to effect compliance

• 404 (1) The directors of a company may make such arrangements as they deem necessary to carry out the intent of this Part and, in particular, but without limiting the generality of the foregoing, may

  • (a) require any person in whose name a share of the company is held to submit a declaration setting out

    • (i) the beneficial ownership of the share, and

    • (ii) such other information as the directors deem relevant for the purposes of this Part;

  • (b) require any person who wishes to have a transfer of a share registered in the name of, or to have a share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share; and

  • (c) determine the circumstances in which a declaration referred to in paragraph (a) is to be required, the form of the declaration and the times at which it is to be submitted.

• Marginal note:Order of Superintendent

  (2) The Superintendent may, by order, direct a company to obtain from any person in whose name a share of the company is held a declaration setting out the name of every entity controlled by that person and containing information concerning

  • (a) the ownership or beneficial ownership of the share; and

  • (b) such other related matters as are specified by the Superintendent.

• Marginal note:Compliance required

  (3) As soon as possible after receipt by a company of a direction under subsection (2),

  • (a) the company shall comply with the direction; and

  • (b) every person who is requested by the company to provide a declaration containing information referred to in subsection (1) or (2) shall comply with the request.

• Marginal note:Outstanding declaration: effect

  (4) Where, pursuant to this section, a declaration is required to be submitted by a shareholder or other person in respect of the issue or transfer of any share, a company may refuse to issue the share or register the transfer unless the required declaration is submitted.

Marginal note:Reliance on information

405 A company and any person who is a director or an officer, employee or agent of the company may rely on any information contained in a declaration required by the directors pursuant to section 404 or on any information otherwise acquired in respect of any matter that might be the subject of such a declaration, and no action lies against the company or any such person for anything done or omitted to be done in good faith in reliance on any such information.

406 [Repealed, 1994, c. 47, s. 211]

Marginal note:Exemption regulations

407 The Governor in Council may, by regulation, exempt from any of the provisions of this Part any share transaction or any class of share transactions involving the transfer of shares on the death of the beneficial owner thereof, or any arrangement made in contemplation of the death of the beneficial owner, to one or more members of the beneficial owner’s family, or to one or more trustees on their behalf.

Marginal note:Competition Act

408 Nothing in, or done under the authority of, this Act affects the operation of the Competition Act.

PART VIIIBusiness and Powers

General Business

Marginal note:Main business

• 409 (1) Subject to this Act, a company shall not engage in or carry on any business other than such business generally as appertains to the business of providing financial services.

• Marginal note:Idem

  (2) For greater certainty, a company may

  • (a) subject to section 412, act as a trustee;

  • (b) act as a financial agent, receiver, liquidator or sequestrator;

  • (c) provide investment counselling services and portfolio management services; and

  • (d) issue payment, credit or charge cards and, in cooperation with others including other financial institutions, operate a payment, credit or charge card plan.

Marginal note:Additional activities

• 410 (1) In addition, a company may

  • (a) act as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property and provide consulting or appraisal services in respect of real property;

  • (b) hold, manage and otherwise deal with real property;

  • (c) outside Canada, or with the prior written approval of the Minister, in Canada, engage in any of the following activities, namely,

    • (i) collecting, manipulating and transmitting

      • (A) information that is primarily financial or economic in nature,

      • (B) information that relates to the business of a permitted entity, as defined in subsection 449(1), or

      • (C) any other information that the Minister may, by order, specify,

    • (ii) providing advisory or other services in the design, development or implementation of information management systems,

    • (iii) designing, developing or marketing computer software, and

    • (iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the company is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services;

  • (c.1) with the prior written approval of the Minister, develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used

    • (i) to provide information that is primarily financial or economic in nature,

    • (ii) to provide information that relates to the business of a permitted entity, as defined in subsection 449(1), or

    • (iii) for a prescribed purpose or in prescribed circumstances;

  • (d) in Canada, engage in such activities referred to in paragraph (c) that the company was engaged in prior to June 1, 1992;

  • (d.1) engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services;

  • (e) promote merchandise and services to the holders of any payment, credit or charge card issued by the company;

  • (f) engage in the sale of

    • (i) tickets, including lottery tickets, on a non-profit public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest,

    • (ii) urban transit tickets, and

    • (iii) tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government or governments;

  • (g) act as a custodian of property; and

  • (h) provide identification, authentication or verification services.

• Marginal note:Restriction

  (2) Except as authorized by or under this Act, a company shall not deal in goods, wares or merchandise or engage in any trade or other business.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations

  • (a) respecting what a company may or may not do with respect to the carrying on of the activities referred to in paragraphs (1)(c), (c.1) and (d.1);

  • (b) imposing terms and conditions in respect of the provision of the services referred to in paragraphs (1)(a) and 409(2)(c) and the carrying on of the activities referred to in paragraphs (1)(c), (c.1) and (d.1); and

  • (c) respecting the circumstances in which companies may be exempted from the requirement to obtain the approval of the Minister before carrying on a particular activity referred to in paragraph (1)(c) or (c.1).

Marginal note:Networking

411 Subject to section 416, a company may

• (a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 449(1) or a prescribed entity and may enter into an arrangement with any person in respect of the provision of that service; or

• (b) refer any person to any such financial institution or entity.

Marginal note:Restriction on fiduciary activities

412 No company, other than a company that is a trust company pursuant to subsection 57(2), shall act in Canada as

• (a) an executor, administrator or official guardian or a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person; or

• (b) a trustee for a trust.

Marginal note:Restriction on deposit taking

• 413 (1) A company shall not accept deposits in Canada unless

  • (a) it is a member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act;

  • (b) it has been authorized under subsection 26.03(1) of that Act to accept deposits without being a member institution, as defined in section 2 of that Act; or

  • (c) the order approving the commencement and carrying on of business in Canada by the company authorizes it to accept deposits solely in accordance with subsection (2).

• Marginal note:Deposits that fall below $150,000

  (2) A company referred to in paragraph (1)(b) or (c) shall ensure that, on each day that is at least 30 days after the company receives the authorization referred to in that paragraph,

  A/B ≤ 0.01

  where

  A

  is the sum of all amounts each of which is the sum of all the deposits held by the company at the end of a day in the preceding 30 days each of which deposits is less than $150,000 and payable in Canada; and

  B

  is the sum of all amounts each of which is the sum of all deposits held by the company at the end of a day in those preceding 30 days and payable in Canada.

• Marginal note:Exchange rate

  (3) For the purpose of subsection (2), the rate of exchange to be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada is to be determined in accordance with rules prescribed under subsection 26.03(2) of the Canada Deposit Insurance Corporation Act.

• Definition of deposit

  (4) For the purpose of subsection (2), deposit has the meaning that would be given to that term by the schedule to the Canada Deposit Insurance Corporation Act for the purposes of deposit insurance if that schedule were read without reference to subsections 2(2), (5) and (6) of that schedule, but does not include prescribed deposits.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

  • (a) prescribing the deposits referred to in subsection (4); and

  • (b) prescribing terms and conditions with respect to the acceptance of those deposits.