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Bank Act (S.C. 1991, c. 46)

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Act current to 2024-05-01 and last amended on 2024-03-30. Previous Versions

PART XVBank Holding Companies (continued)

DIVISION 7Ownership (continued)

Constraints on Ownership (continued)

Marginal note:Exception

  •  (1) Despite section 876, if a bank holding company with equity of twelve billion dollars or more was formed as the result of an amalgamation, a person who is a major shareholder of the bank holding company on the effective date of the letters patent of amalgamation shall do all things necessary to ensure that the person is no longer a major shareholder of the bank holding company on the day that is one year after that day or on the day that is after any shorter period specified by the Minister.

  • Marginal note:Exception — widely held banks and bank holding companies

    (2) Subsection (1) does not apply to a widely held bank or a widely held bank holding company that controlled, within the meaning of paragraphs 3(1)(a) and (d), one of the applicants for the letters patent of amalgamation and that has controlled, within the meaning of those paragraphs, the amalgamated bank holding company since the effective date of those letters patent.

  • Marginal note:Exception — insurance holding companies and certain institutions

    (3) Subsection (1) does not apply to any of the following that controlled, within the meaning of paragraph 3(1)(d), one of the applicants for the letters patent of amalgamation if it has controlled, within the meaning of that paragraph, the amalgamated bank holding company since the effective date of those letters patent:

    • (a) a widely held insurance holding company;

    • (b) an eligible Canadian financial institution, other than a bank; or

    • (c) an eligible foreign institution.

  • Marginal note:Exception — other entities

    (4) Subsection (1) does not apply to an entity that controls, within the meaning of paragraphs 3(1)(a) and (d), the amalgamated bank holding company if the entity is controlled, within the meaning of those paragraphs, by a widely held bank or widely held bank holding company to which subsection (2) applies that controls the amalgamated bank holding company.

  • Marginal note:Exception — other entities

    (5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the amalgamated bank holding company if the entity is controlled, within the meaning of that paragraph, by any of the following:

    • (a) a widely held insurance holding company to which subsection (3) applies that controls the amalgamated bank holding company;

    • (b) an eligible Canadian financial institution to which subsection (3) applies, other than a bank, that controls the amalgamated bank holding company; or

    • (c) an eligible foreign institution to which subsection (3) applies that controls the amalgamated bank holding company.

  • Marginal note:Extension

    (6) If general market conditions so warrant and the Minister is satisfied that the person has used the person’s best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which the person must comply with that subsection.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 82

Marginal note:Limitation on share holdings

  •  (1) If a person is a major shareholder of a bank holding company with equity of less than twelve billion dollars and the bank holding company’s equity reaches twelve billion dollars or more, the person shall do all things necessary to ensure that the person is not a major shareholder of the bank holding company on the day that is three years after the day the bank holding company’s equity reached twelve billion dollars.

  • Marginal note:Exception

    (2) Subsection (1) does not apply if any of subsections 876(2) to (6) applies to the person in respect of the bank holding company.

  • Marginal note:Extension

    (3) If general market conditions so warrant and the Minister is satisfied that the person has used the person’s best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which the person must comply with that subsection.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 83

Marginal note:Obligation of widely held bank holding company

  •  (1) If a widely held bank holding company with equity of twelve billion dollars or more controls a bank and a person becomes a major shareholder of the bank or of any entity that also controls the bank, the widely held bank holding company must do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the bank or entity that controls it,

    • (a) the widely held bank holding company no longer controls the bank; or

    • (b) the bank or the entity that controls the bank does not have any major shareholder other than the widely held bank holding company or any entity that it controls.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of a bank with equity of less than two hundred and fifty million dollars, or any other prescribed amount.

  • Marginal note:Extension

    (3) If general market conditions so warrant and the Minister is satisfied that the widely held bank holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 84

Marginal note:Obligation of widely held bank holding company

  •  (1) Despite subsection 879(1), if a widely held bank holding company with equity of twelve billion dollars or more controls a bank in respect of which that subsection does not apply by reason of subsection 879(2) and the equity of the bank reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the bank reaches two hundred and fifty million dollars or more or the prescribed amount, as the case may be, a person is a major shareholder of the bank or of any entity that also controls the bank, the widely held bank holding company must do all things necessary to ensure that, on the day that is three years after that day,

    • (a) the widely held bank holding company no longer controls the bank; or

    • (b) the bank or the entity that controls the bank does not have any major shareholder other than the widely held bank holding company or any entity that the widely held bank holding company controls.

  • Marginal note:Extension

    (2) If general market conditions so warrant and the Minister is satisfied that the widely held bank holding company has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 85

Marginal note:Prohibition against significant interest

 No person who has a significant interest in any class of shares of a widely held bank holding company with equity of twelve billion dollars or more may have a significant interest in any class of shares of a subsidiary of the widely held bank holding company that is a bank or a bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 86

Marginal note:Prohibition against significant interest

 No person who has a significant interest in any class of shares of a bank holding company may have a significant interest in any class of shares of any widely held bank with equity of twelve billion dollars or more, or of any widely held bank holding company with equity of twelve billion dollars or more, that controls the bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 86

Marginal note:Prohibition against control

  •  (1) No person shall control, within the meaning of paragraph 3(1)(d), a bank holding company with equity of twelve billion dollars or more.

  • Marginal note:Exception — widely held bank

    (2) Subsection (1) does not apply if any of subsections 876(2) to (6) applies in respect of the person in respect of the bank holding company.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 87

Marginal note:Restriction on control

  •  (1) No person shall, without the approval of the Minister, acquire control, within the meaning of paragraph 3(1)(d), of a bank holding company with equity of less than twelve billion dollars.

  • Marginal note:Amalgamation, etc., constitutes acquisition

    (2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), a bank holding company with equity of less than twelve billion dollars, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the bank holding company through an acquisition for which the approval of the Minister is required under subsection (1).

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 119
  • 2012, c. 5, s. 88

Marginal note:Deeming

 A bank holding company with equity of less than twelve billion dollars that controls a bank to which subsection 378(1) applies is deemed, for the purposes of sections 156.09, 727, 876, 879, 879.1, 880, 881, 882, 888 and 890, subsection 891(2), section 893 and subsection 906(2), to be a bank holding company with equity of twelve billion dollars or more.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 88

Marginal note:Prohibition

 No person may control or be a major shareholder of a bank holding company if the person or an entity affiliated with the person

  • (a) has control of or has a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in; or

  • (b) engages in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in.

  • 2001, c. 9, s. 183

Marginal note:Prohibition

 No person who controls a bank holding company or who is a major shareholder of a bank holding company, and no entity affiliated with that person, may

  • (a) control or have a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in; or

  • (b) engage in Canada in any personal property leasing activity that a financial leasing entity within the meaning of subsection 464(1) is prohibited from engaging in.

  • 2001, c. 9, s. 183

Marginal note:Constraint on registration

 No bank holding company shall, unless the acquisition of the share has been approved by the Minister, record in its securities register a transfer or issue of any share of the bank holding company to any person or to any entity controlled by a person if

  • (a) the transfer or issue of the share would cause the person to have a significant interest in any class of shares of the bank holding company; or

  • (b) where the person has a significant interest in a class of shares of the bank holding company, the transfer or issue of the share would increase the significant interest of the person in that class of shares.

  • 2001, c. 9, s. 183

Marginal note:Exemption

 On application by a bank holding company, other than a bank holding company with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank holding company the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank holding company from the application of sections 875 and 887.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 89

Marginal note:Exception — small holdings

 Despite section 887, if, as a result of a transfer or issue of shares of a class of shares of a bank holding company to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the bank holding company in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class, the bank holding company is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares of the bank holding company as a result of that issue or transfer of shares.

  • 2001, c. 9, s. 183
  • 2012, c. 31, s. 120

Marginal note:When approval not required

  •  (1) Despite sections 875 and 887, the approval of the Minister is not required in respect of a bank holding company with equity of less than twelve billion dollars if a person with a significant interest in a class of shares of the bank holding company, or an entity controlled by a person with a significant interest in a class of shares of the bank holding company, purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the bank holding company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

  • Marginal note:Percentage

    (2) Subject to subsection (3) and for the purpose of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the bank holding company on the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister.

  • Marginal note:When approval not required

    (3) If a person has a significant interest in a class of shares of a bank holding company and the person’s percentage of that class has decreased after the date of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister, the percentage for the purposes of subsection (1) is the percentage that is the lesser of

    • (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the bank holding company on the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister, and

    • (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the bank holding company at any time after the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank holding company, or of control of an entity that held shares of that class of shares of the bank holding company, for which approval was given by the Minister.

  • Marginal note:Exception — eligible agent

    (3.1) If the person referred to in subsection (1) is an eligible agent or an entity controlled by an eligible agent, then the Minister may reduce the percentage referred to in subsection (2) or (3).

  • Marginal note:Exception

    (4) Subsection (1) does not apply if the purchase or other acquisition of shares or the acquisition of control referred to in that subsection would

    • (a) result in the acquisition of control of the bank holding company by the person referred to in that subsection;

    • (b) if the person controls the bank holding company but the voting rights attached to the aggregate of any voting shares of the bank holding company beneficially owned by the person and by entities controlled by the person do not exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the bank holding company, cause the voting rights attached to that aggregate to exceed 50 per cent of the voting rights attached to all of the outstanding voting shares of the bank holding company;

    • (c) result in the acquisition of a significant interest in a class of shares of the bank holding company by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or

    • (d) result in an increase in a significant interest in a class of shares of the bank holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies, and the increase is not exempted by the regulations.

  • Marginal note:Regulations

    (5) The Governor in Council may make regulations

    • (a) exempting from the application of paragraph (4)(c) the acquisition of a significant interest in a class of shares of the bank holding company by an entity controlled by the person; and

    • (b) exempting from the application of paragraph (4)(d) an increase in a significant interest in a class of shares of the bank holding company by an entity controlled by the person by a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever applies.

  • 2001, c. 9, s. 183
  • 2007, c. 6, s. 132
  • 2012, c. 5, s. 90, c. 31, s. 121
 

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