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Bank Act (S.C. 1991, c. 46)

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Act current to 2020-07-28 and last amended on 2020-05-09. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 2Status and Powers (continued)

Marginal note:Sunset provision

  •  (1) Subject to subsections (2) and (4), bank holding companies shall not carry on business after the fifth anniversary of the day on which the Budget Implementation Act, 2018, No. 1 receives royal assent.

  • Marginal note:Extension

    (2) The Governor in Council may, by order, extend by up to six months the time during which bank holding companies may continue to carry on business. No more than one order may be made under this subsection.

  • Marginal note:Order not a regulation

    (3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.

  • Marginal note:Exception — dissolution

    (4) If Parliament dissolves on the fifth anniversary of the day on which the Budget Implementation Act, 2018, No. 1 receives royal assent or on any day within the six-month period before that anniversary or on any day within an extension ordered under subsection (2), bank holding companies may continue to carry on business until the end of the 180th day after the first day of the first session of the next Parliament.

  • 1999, c. 28, s. 65
  • 2001, c. 9, s. 183
  • 2006, c. 4, s. 199.1
  • 2007, c. 6, s. 105
  • 2012, c. 5, s. 77
  • 2016, c. 7, s. 119
  • 2018, c. 12, s. 356

DIVISION 3Incorporation and Continuance

Formalities of Incorporation

Marginal note:Incorporation of bank holding company

 On the application of one or more persons made in accordance with this Part, the Minister may, subject to this Division, issue letters patent incorporating a bank holding company.

  • 1999, c. 28, s. 66
  • 2001, c. 9, s. 183

Marginal note:Restrictions on incorporation

 Letters patent incorporating a bank holding company may not be issued if the application therefor is made by or on behalf of

  • (a) Her Majesty in right of Canada or in right of a province, an agency of Her Majesty in either of those rights, or an entity controlled by Her Majesty in either of those rights;

  • (b) the government of a foreign country or any political subdivision thereof;

  • (c) an agency of the government of a foreign country or any political subdivision thereof; or

  • (d) an entity, other than a foreign institution or any subsidiary of a foreign institution, that is controlled by the government of a foreign country or any political subdivision thereof.

  • 1999, c. 28, s. 66
  • 2001, c. 9, s. 183

Marginal note:National treatment

 If a proposed bank holding company would be a subsidiary of a foreign bank, within the meaning of any of paragraphs (a) to (f) of the definition foreign bank in section 2, letters patent to incorporate the bank holding company may not be issued unless the Minister is satisfied that, if the application is made by a non-WTO Member foreign bank, treatment as favourable for bank holding companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign bank principally carries on business, either directly or through a subsidiary.

  • 1999, c. 28, s. 67
  • 2001, c. 9, s. 183

Marginal note:Application for incorporation

 An application for letters patent to incorporate a bank holding company setting out the names of the first directors of the bank holding company shall be filed with the Superintendent, together with such other information, material and evidence as the Superintendent may require.

  • 1999, c. 28, s. 68
  • 2001, c. 9, s. 183

Marginal note:Matters for consideration

 Before issuing letters patent to incorporate a bank holding company, the Minister shall take into account all matters that the Minister considers relevant to the application, including

  • (a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the bank that is proposed to be its subsidiary;

  • (b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the bank that is proposed to be its subsidiary;

  • (c) the business record and experience of the applicant or applicants;

  • (d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity;

  • (e) whether the bank holding company will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

  • (f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the bank holding company and its affiliates on the conduct of those businesses and operations; and

  • (g) the best interests of the financial system in Canada.

  • 1999, c. 28, s. 69
  • 2000, c. 12, s. 6
  • 2001, c. 9, s. 183

Marginal note:Contents of letters patent

  •  (1) There shall be set out in the letters patent incorporating a bank holding company

    • (a) the name of the bank holding company;

    • (b) the province in which the head office of the bank holding company is to be situated; and

    • (c) the date that the bank holding company came, or is to come, into existence.

  • Marginal note:Provisions in letters patent

    (2) The Minister may set out in the letters patent incorporating a bank holding company any provision not contrary to this Act that the Minister considers advisable in order to take into account the particular circumstances of the proposed bank holding company.

  • Marginal note:Terms and conditions

    (3) The Minister may impose such terms and conditions in respect of the issuance of letters patent incorporating a bank holding company as the Minister considers necessary or appropriate.

  • 1999, c. 28, s. 70
  • 2001, c. 9, s. 183
  • 2005, c. 54, s. 84

Marginal note:Letters patent of incorporation on application of banks

  •  (1) If, under section 671, the Minister issues letters patent incorporating a bank holding company on the application of a bank, there may, on the request of the bank, and with the approval of the Minister, be included in the letters patent of incorporation of the bank holding company a provision deeming shares of the bank holding company to be issued, on a share for share basis, to all shareholders of the bank in exchange for all the issued and outstanding shares of the bank.

  • Marginal note:Effect of provision

    (2) Shares of a bank holding company deemed to be issued under subsection (1) are subject to the same designation, rights, privileges and restrictions or conditions and, subject to any agreement to the contrary, to the same charges, encumbrances and other restrictions as the shares of the bank for which they are exchanged and the shares of the bank, on the issuance of the letters patent, become the property of the bank holding company free and clear of any charge, encumbrance or other restriction.

  • Marginal note:Effect of provision

    (3) An exchange of shares of a bank referred to in subsection (1) under a provision included in the letters patent incorporating a bank holding company does not deprive a person who was a holder of shares of the bank immediately before the exchange of any right or privilege with respect to the shares or relieve the person of any liability in respect of the shares, but that right or privilege must be exercised in accordance with this Act.

  • Marginal note:Transfer and voting of shares

    (4) Despite subsection (3), no share of a bank holding company that is deemed to be issued under a provision included in the letters patent incorporating a bank holding company may subsequently be transferred or voted contrary to this Act.

  • Marginal note:Shareholder approval

    (5) No provision described in subsection (1) may be included in letters patent issued under section 671 unless the application for the letters patent is accompanied by evidence that the request for the provision was approved by a special resolution of the shareholders of the bank at a shareholders’ meeting called to consider the application.

  • Marginal note:Exchange of share certificates

    (6) If, under a provision included in the letters patent incorporating a bank holding company, a share exchange is deemed to have taken place, the bank holding company shall, within ninety days after the issuance of the letters patent, make provision for the issue of share certificates representing shares of the bank holding company and for the exchange of those certificates for share certificates representing the shares of the bank that were outstanding on the effective date of the letters patent.

  • 1999, c. 28, s. 71
  • 2001, c. 9, s. 183
 
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