Bank Act (S.C. 1991, c. 46)

Marginal note:Directors and officers and their interests

• 496. (1) Subject to subsection (2) and sections 497 and 498, a bank may enter into any transaction with a related party of the bank if the related party is

  • (a) a natural person who is a related party of the bank only because the person is

    • (i) a director or a senior officer of the bank or of an entity that controls the bank, or

    • (ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer of the bank or of an entity that controls the bank; or

  • (b) an entity that is a related party of the bank only because the entity is controlled by

    • (i) a director or senior officer of the bank or of an entity that controls the bank, or

    • (ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer referred to in subparagraph (i).

• Marginal note:Loans to full-time officers

  (2) A bank may, with respect to a related party of the bank referred to in subsection (1) who is a full-time senior officer of the bank, make, take an assignment of or otherwise acquire a loan to the related party only if the aggregate principal amount of all outstanding loans to the related party that are held by the bank and its subsidiaries, together with the principal amount of the proposed loan, does not exceed the greater of twice the annual salary of the related party and $100,000.

• Marginal note:Exception

  (3) Subsection (2) does not apply in respect of

  • (a) loans referred to in paragraph 491(b), and

  • (b) margin loans referred to in section 498,

  and the amount of any such loans to a related party of a bank shall not be included in determining, for the purposes of subsection (2), the aggregate principal amount of all outstanding loans made by the bank to the related party.

• Marginal note:Preferred terms — loan to officer

  (4) Notwithstanding section 501, a bank may make a loan, other than a margin loan, to a senior officer of the bank on terms and conditions more favourable to the officer than those offered to the public by the bank if those terms and conditions have been approved by the conduct review committee of the bank.

• Marginal note:Preferred terms — loan to spouse or common-law partner

  (5) Notwithstanding section 501, a bank may make a loan referred to in paragraph 491(b) to the spouse or common-law partner of a senior officer of the bank on terms and conditions more favourable than those offered to the public by the bank if those terms and conditions have been approved by the conduct review committee of the bank.

• Marginal note:Preferred terms — other financial services

  (6) Notwithstanding section 501, a bank may offer financial services, other than loans or guarantees, to a senior officer of the bank, or to the spouse or common-law partner, or a child who is less than eighteen years of age, of a senior officer of the bank, on terms and conditions more favourable than those offered to the public by the bank if

  • (a) the financial services are offered by the bank to employees of the bank on those favourable terms and conditions; and

  • (b) the conduct review committee of the bank has approved the practice of making those financial services available on those favourable terms and conditions to senior officers of the bank or to the spouses or common-law partners, or the children under eighteen years of age, of senior officers of the bank.