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Bank Act (S.C. 1991, c. 46)

Full Document:  

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

PART XIIForeign Banks (continued)

DIVISION 2General Prohibitions and Exceptions (continued)

Marginal note:Limit — business growth fund

  •  (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a foreign bank and the entities associated with it hold must not exceed $200,000,000.

  • Marginal note:Application

    (2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance.

  • 2018, c. 27, s. 142

Marginal note:Business growth fund

  •  (1) Subject to section 510.01 and subsections (2) to (4), a foreign bank or an entity associated with a foreign bank may hold or acquire a substantial investment in the business growth fund or a Canadian entity that the business growth fund controls.

  • Marginal note:For greater certainty

    (2) For greater certainty, a foreign bank or an entity associated with a foreign bank is prohibited from acquiring control of the business growth fund or any Canadian entity that the business growth fund controls.

  • Marginal note:Prohibition — entity

    (3) A foreign bank or an entity associated with a foreign bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any Canadian entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:

    • (a) an entity referred to in any of paragraphs 468(1)(a) to (j);

    • (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;

    • (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;

    • (d) an entity that acts as an insurance broker or agent in Canada; or

    • (e) an entity that is engaged in any prescribed activity.

  • Marginal note:Prohibition — capital and loans

    (4) A foreign bank or an entity associated with a foreign bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any Canadian entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:

    • (a) all ownership interests that are held by the foreign bank, the entities associated with the foreign bank, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and

    • (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.

  • 2018, c. 27, s. 142

Marginal note:Exception re real property holding and management

 Except as may be prescribed, paragraphs 510(1)(a) and (b) do not apply in respect of the holding or managing of, or otherwise dealing with, real property in Canada by a foreign bank or an entity associated with a foreign bank.

  • 2007, c. 6, s. 51

Marginal note:Exception re accessing accounts

 Nothing in paragraphs 510(1)(a) to (c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from providing its customers who are natural persons not ordinarily resident in Canada with access in Canada to their accounts located outside Canada through the use of automated banking machines located in Canada.

  • 1991, c. 46, s. 511
  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 51

Marginal note:Exception re quotations

 Nothing in paragraphs 510(1)(a) to (c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from establishing, maintaining or using a private telephone service or similar facility for the purpose of quoting to customers in Canada, or entering with customers in Canada into verbal agreements relating to, foreign exchange, deposit or loan rates if there is no accounting or information processing involved in the private telephone service or similar facility.

  • 1991, c. 46, s. 512
  • 2001, c. 9, s. 132

Marginal note:Exception re automated services

  •  (1) A foreign bank, or an entity associated with a foreign bank, that has received the approval of the Minister under paragraph 522.22(1)(f) may

    • (a) if it is a foreign securities dealer that has also received the approval of the Minister under paragraph 522.22(1)(i), engage in the activities referred to in paragraph 510(1)(c) so long as they relate to its business referred to in paragraph 522.18(1)(b); and

    • (b) if it is a foreign cooperative credit society, engage in the activities referred to in paragraph 510(1)(c) so long as they relate to its business as a cooperative credit society engaged in or carried on by it in accordance with provincial laws relating to cooperative credit societies.

  • Marginal note:Non-application

    (2) Paragraph 510(1)(c) does not apply to

    • (a) a Canadian entity referred to in any of paragraphs 468(1)(g) to (i);

    • (b) a prescribed Canadian entity, other than a permitted Canadian entity, that is controlled by a Canadian entity referred to in paragraph (a); or

    • (c) any other Canadian entity, other than a limited commercial entity, that is acquired or held by a foreign bank or an entity associated with a foreign bank in accordance with Divisions 4 and 5, and that has received the approval of the Minister under paragraph 522.22(1)(i).

  • 1991, c. 46, s. 513
  • 1997, c. 15, s. 78
  • 1999, c. 28, s. 29
  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 52

 [Repealed, 2007, c. 6, s. 53]

 [Repealed, 2007, c. 6, s. 53]

Marginal note:Change of status

  •  (1) If an entity becomes a foreign bank, or an entity associated with a foreign bank, to which this Part applies and immediately before it became such a foreign bank or such an entity it maintained a branch or engaged in or carried on business in Canada that is not permitted by or under this Part, it may continue to maintain that branch or engage in or carry on that business for a period of six months after the day on which it became such a foreign bank or such an entity, or for any other shorter period that may be specified or approved by the Minister.

  • Marginal note:Transitional

    (2) If a foreign bank or an entity associated with a foreign bank was permitted by section 516 or 517, as that section read immediately before the day on which this subsection came into force, to maintain a branch or engage in or carry on business in Canada that is not permitted by or under this Part, it may continue to maintain that branch or engage in or carry on that business for the period during which it could have done so under that section.

  • 1991, c. 46, s. 516
  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 53

Marginal note:Change of status

  •  (1) If an entity becomes a foreign bank, or an entity associated with a foreign bank, to which this Part applies and immediately before it became such a foreign bank or such an entity it held control of, or a substantial investment in, a Canadian entity and that control or substantial investment is not permitted by or under this Part, it may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months after the day on which it became such a foreign bank or such an entity, or for any other shorter period that may be specified or approved by the Minister.

  • Marginal note:Transitional

    (2) If a foreign bank or an entity associated with a foreign bank was permitted by section 516 or 517, as that section read immediately before the day on which this subsection came into force, to hold control of, or a substantial investment in, a Canadian entity and that holding is not permitted by or under this Part, it may continue to hold control of, or the substantial investment in, the Canadian entity for the period during which it could have done so under that section.

  • 1991, c. 46, s. 517
  • 1997, c. 15, s. 81
  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 53

Marginal note:Restriction

 If an order has been made under subsection 973.1(1) in respect of a foreign bank or an entity associated with a foreign bank and section 516 or 517 applies to the foreign bank or entity, as the case may be, the period under section 516 or 517 may not extend beyond the expiry of the period referred to in the order made under subsection 973.1(1).

  • 2001, c. 9, s. 132
  • 2007, c. 6, s. 54(E)
 
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