Bank Act (S.C. 1991, c. 46)

Membership Capital

Marginal note:Membership shares

• 79.1 (1) A federal credit union may have only one class of membership shares in which the rights of their holders are equal in all respects, and those rights include the right to receive

  • (a) dividends declared on those membership shares; and

  • (b) the remaining property of the federal credit union on dissolution.

• Marginal note:Consideration for membership share

  (2) No membership share of a federal credit union is to be issued until it is fully paid for in money or, with the approval of the Superintendent, in property.

• Marginal note:Other currencies

  (3) When issuing membership shares, a federal credit union may provide that any aspect of the membership shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada.

Marginal note:Membership shares

• 79.2 (1) Membership shares may be held only by members.

• Marginal note:No right to vote

  (2) The right to vote attaches to membership and not to a membership share.

• Marginal note:Preferences, rights, etc.

  (3) A federal credit union’s letters patent or by-laws may not include any preference, right, condition, restriction, limitation or prohibition on membership shares, except as provided for by this Act.

Marginal note:Issue of certificates

• 79.3 (1) The by-laws of a federal credit union may provide that no membership share certificates need be issued and, if they so provide, the federal credit union must, on the request of a member, issue a statement of the number of membership shares held by the member.

• Marginal note:Certificates

  (2) The face of each certificate that the federal credit union issues in respect of membership shares must contain

  • (a) the name of the federal credit union;

  • (b) a statement that the federal credit union is subject to this Act;

  • (c) the name of the person to whom it is issued;

  • (d) a statement that the certificate represents membership shares in the federal credit union, and the number of the membership shares represented by the certificate;

  • (e) a statement that the certificate is transferable only in accordance with this Act; and

  • (f) a statement that there is a charge on the membership shares represented by the certificate in favour of the federal credit union for any indebtedness of the member to the federal credit union.

Marginal note:Authorized capital

79.4 The membership shares of a federal credit union must be issued with no par value, and its by-laws must specify any limit on the number of membership shares and set out the formula to be used to determine the value of the membership shares.

Marginal note:Membership shares non-assessable

79.5 Membership shares issued by a federal credit union are non-assessable, and their holders are not liable to the federal credit union or to its creditors in respect of those membership shares.

Marginal note:Continued body corporate

79.6 A body corporate that is continued as a federal credit union under this Act and that is not in compliance with section 79.1 on the date letters patent continuing it as a federal credit union are issued must, within 12 months after that date, redesignate a class of its shares to comply with that section.

Subordinated Indebtedness

Marginal note:Restriction on subordinated indebtedness

• 80 (1) A bank 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 refer to the subordinated indebtedness otherwise than as subordinated indebtedness.

• Marginal note:Deemed not to be a deposit

  (3) Subordinated indebtedness issued by a bank is deemed not to be a deposit.

• Marginal note:Other currencies

  (4) When issuing subordinated indebtedness, a bank 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:Definitions

81 In this section and sections 82 to 135,

adverse claim

adverse claim includes a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of or has an interest in a security; (opposition)

bona fide purchaser

bona fide purchaser means a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or order form or of a security in registered form issued to the purchaser or endorsed to the purchaser or endorsed in blank; (acheteur de bonne foi)

clearing agency

clearing agency means a person designated as a recognized clearing agency by the Superintendent; (agence de compensation et de dépôt)

delivery

delivery means voluntary transfer of possession; (livraison ou remise)

fungible

fungible, in respect of securities, means securities of which any unit is, by nature or usage of trade, the equivalent of any other like unit; (fongibles)

genuine

genuine means free of forgery or counterfeit; (authentique)

good faith

good faith means honesty in fact in the conduct of the transaction concerned; (bonne foi)

over-issue

over-issue means the issue of securities in excess of any maximum number of securities that the issuer is authorized to issue; (émission excédentaire)

purchaser

purchaser means a person who takes an interest in a security by sale, mortgage, pledge, issue, reissue, gift or any other voluntary transaction; (acquéreur)

security

security or security certificate means an instrument issued by a bank that is

• (a) in bearer, order or registered form,

• (b) of a type commonly dealt in on securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment,

• (c) one of a class or series or by its terms divisible into a class or series of instruments, and

• (d) evidence of a share, participation or other interest in or obligation of a bank,

but does not include an instrument evidencing a deposit or, in the case of a federal credit union, a membership share; (valeur mobilière ou certificat de valeur mobilière)

securities broker

securities broker means a person who is engaged for all or part of the person’s time in the business of buying and selling securities and who, in the transaction concerned, acts for, or buys a security from, or sells a security to, a customer; (courtier)

trust indenture

trust indenture has the meaning given that expression by section 294; (acte de fiducie)

unauthorized

unauthorized, in relation to a signature or an endorsement, means a signature or an endorsement made without actual, implied or apparent authority, and includes a forgery; (non autorisé)

uncertificated security

uncertificated security means a security, not evidenced by a security certificate, the issue and any transfer of which is registered or recorded in records maintained for that purpose by or on behalf of a bank; (valeur mobilière sans certificat)

valid

valid means issued in accordance with the applicable law or validated under section 97. (valide)