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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2021-02-15 and last amended on 2020-05-09. Previous Versions

PART XII.1Authorized Foreign Banks (continued)

Business and Powers (continued)

Marginal note:Regulations apply

 Regulations made for the purpose of any of sections 409 to 411 apply in respect of authorized foreign banks with any modifications that the circumstances require unless regulations made under subsection 539(3) provide otherwise.

  • 2001, c. 9, s. 140

Marginal note:Restrictions

  •  (1) Where subsection 524(2) applies, the authorized foreign bank shall not, in respect of its business in Canada,

    • (a) except as permitted by subsection (4), engage in the business of accepting deposit liabilities, or otherwise borrow money;

    • (b) subject to the regulations, act as an agent for any person in the taking of deposit liabilities; or

    • (c) guarantee any securities or accept any bills of exchange or depository bills that are

      • (i) issued by any person, and

      • (ii) intended by the issuer or any party to be sold or traded.

  • Marginal note:Requirements

    (2) If subsection 524(2) applies, the authorized foreign bank shall, in accordance with the regulations,

    • (a) post notices in its branches in Canada that it does not accept deposits in Canada and that it is not a member institution of the Canada Deposit Insurance Corporation; and

    • (b) include in its advertisements the prescribed information.

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations respecting notices and advertisements for the purpose of subsection (2).

  • Marginal note:Authorized borrowing

    (4) For the purposes of paragraph (1)(a), an authorized foreign bank may

    • (a) accept deposit liabilities or otherwise borrow money from

      • (i) a financial institution other than a foreign bank, or

      • (ii) a foreign bank described in any of subparagraphs 508(1)(a)(i) to (iii),

      by means of financial instruments that cannot be subsequently sold or traded; or

    • (b) accept deposit liabilities or otherwise borrow money, from prescribed classes of entities referred to in subparagraph (a)(i) or (ii), by means of financial instruments that can be sold to or traded with those classes of entities, in accordance with regulations made pursuant to subsection (6).

  • Marginal note:Non-application of paragraph (1)(c)

    (5) Paragraph (1)(c) does not apply in respect of

    • (a) securities or bills of exchange that are sold to or traded with any entity referred to in subparagraph (4)(a)(i) or (ii) and that cannot be subsequently sold or traded; or

    • (b) securities or bills of exchange that can be sold to or traded with prescribed classes of entities referred to in subparagraph (4)(a)(i) or (ii), in accordance with regulations made pursuant to subsection (6).

  • Marginal note:Regulations

    (6) The Governor in Council may make regulations

    • (a) prescribing the class, type or amount of deposit liabilities or borrowings referred to in paragraph (4)(b);

    • (b) prescribing the class, type or amount of securities or bills of exchange referred to in paragraph (5)(b);

    • (c) prescribing the classes of entities referred to in paragraph (4)(b) or (5)(b);

    • (d) prescribing the terms and conditions respecting any sale or trade of financial instruments, securities or bills of exchange;

    • (d.1) respecting circumstances in which and the conditions under which an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2) may act as agent for any person in the taking of deposit liabilities; and

    • (e) respecting such other matters or things as are necessary to carry out the purposes of this section.

  • 1991, c. 46, s. 540
  • 1996, c. 6, s. 16
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 141
  • 2007, c. 6, s. 83
  • 2012, c. 5, s. 60

Marginal note:Application of certain provisions

  •  (1) The provisions of this Act that apply in respect of an authorized foreign bank apply in respect of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2), with any modifications that may be required to take into account those restrictions and requirements.

  • Marginal note:Non-application of certain provisions

    (2) The following provisions do not apply in respect of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2):

    • (a) sections 545 and 546; and

    • (b) sections 559 to 566.

  • 1991, c. 46, s. 541
  • 1996, c. 6, s. 16
  • 1999, c. 28, s. 35

Marginal note:Guarantees and acceptances

 An authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) may, in respect of its business in Canada, guarantee any securities and accept any bills of exchange that are issued by any person and intended by the issuer or any party to be sold or traded.

  • 1999, c. 28, s. 35

Marginal note:Payment clearing and settlement

 Subject to section 22.1 of the Payment Clearing and Settlement Act, an authorized foreign bank may be a participant in a clearing and settlement system designated under subsection 4(1) of that Act.

  • 1991, c. 46, s. 542
  • 1996, c. 6, s. 17
  • 1999, c. 28, s. 35
  • 2014, c. 39, s. 375

Marginal note:Networking

  •  (1) Subject to sections 540, 546 and 549, an authorized foreign bank may, in Canada,

    • (a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, an entity in which a bank is permitted to acquire a substantial investment under section 468 or a Canadian entity acquired or held under section 522.08 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:Regulations

    (2) The Governor in Council may make regulations respecting the disclosure of

    • (a) the name of the principal for whom an authorized foreign bank is acting as agent pursuant to subsection (1); and

    • (b) whether any commission is being earned by an authorized foreign bank when acting as agent pursuant to subsection (1).

  • 1991, c. 46, s. 543
  • 1996, c. 6, s. 17
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 142
  • 2007, c. 6, s. 84

 [Repealed, 1999, c. 28, s. 35]

Marginal note:Restriction on fiduciary activities

 No authorized foreign bank 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.

  • 1991, c. 46, s. 544
  • 1996, c. 6, s. 17
  • 1999, c. 28, s. 35

Marginal note:Deposits that fall below $150,000

  •  (1) An authorized foreign bank shall, in respect of its business in Canada, ensure that, on each day that is at least thirty days after the date of the order under subsection 534(1) made in respect of it,

    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 authorized foreign bank at the end of a day in the preceding thirty 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 authorized foreign bank at the end of a day in those preceding thirty days and payable in Canada.
  • Marginal note:Exchange rate

    (2) For the purpose of subsection (1), the rate of exchange that shall be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada shall be determined in accordance with any regulations that may be made.

  • Meaning of deposit

    (3) For the purpose of subsection (1), deposit has the meaning that would be given to it 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:Notice before opening account or providing prescribed product

    (4) Before an authorized foreign bank opens a deposit account in Canada or provides in Canada any prescribed product that relates to a deposit, the authorized foreign bank shall, at the prescribed time and place and in the prescribed form and manner, give the person requesting the opening of the account or the provision of the product

    • (a) a notice in writing that the deposits to the deposit account, or that the deposit that relates to the prescribed product, as the case may be, will not be insured by the Canada Deposit Insurance Corporation or, if the request is made by telephone, a verbal notice to that effect; and

    • (b) any other information that may be prescribed.

  • Marginal note:Other notice

    (5) An authorized foreign bank shall, in accordance with the regulations,

    • (a) post notices at all of its branches, and at prescribed points of service, in Canada where deposits are accepted, and on all of its websites at which deposits are accepted in Canada, to inform the public that deposits with the authorized foreign bank are not insured by the Canada Deposit Insurance Corporation; and

    • (b) include in its advertisements notices to inform the public that deposits with the authorized foreign bank are not insured by the Canada Deposit Insurance Corporation.

  • Marginal note:Regulations

    (6) The Governor in Council may make regulations

    • (a) respecting the determination of rates of exchange referred to in subsection (2);

    • (a.1) prescribing the deposits referred to in subsection (3) and the terms and conditions with respect to the acceptance of those deposits;

    • (b) prescribing the time and place at which and the form and manner in which notices referred to in subsection (4) are to be given and the other information to be contained in the notices; and

    • (c) respecting notices referred to in subsection (5).

  • 1991, c. 46, s. 545
  • 1996, c. 6, s. 17
  • 1999, c. 28, s. 35
  • 2007, c. 6, s. 85
  • 2012, c. 5, s. 61
 
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