Marginal note:Regulations — distributing bank or bank holding company

• 2.4 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing bank or distributing bank holding company for the purposes of this Act.

• Marginal note:Exemption — bank or bank holding company

  (2) On the application of a bank or bank holding company, the Superintendent may determine that it is not or was not a distributing bank or distributing bank holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that bank or bank holding company.

• Marginal note:Exemption — class of banks or bank holding companies

  (3) The Superintendent may determine that members of a class of banks or bank holding companies are not or were not distributing banks or distributing bank holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.

• (b) the province in which the principal office of the authorized foreign bank is situated; and

Marginal note:Authority of directors and officers

• 20. (1) No bank and no guarantor of an obligation of a bank may assert against a person dealing with the bank or against a person who has acquired rights from the bank that

  • (a) the bank’s incorporating instrument or any by-laws of the bank have not been complied with;

  • (b) the persons named as directors of the bank in the most recent return sent to the Superintendent under section 632 are not the directors of the bank;

  • (c) the place named in the incorporating instrument or by-laws of the bank is not the place where the head office of the bank is situated;

  • (d) a person held out by the bank as a director, officer or representative of the bank has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the bank or usual for a director, officer or representative; or

  • (e) a document issued by any director, officer or representative of the bank with actual or usual authority to issue the document is not valid or not genuine.

• Marginal note:Exception — knowledge

  (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the bank.

• (b) the province in which the head office of the bank is to be situated; and

• Marginal note:Exception

  (3) Despite subsection (2), a bank may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act,

    • (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank at arm’s length within the meaning of that expression in the Income Tax Act, or

    • (iii) property of a person who immediately before the exchange dealt with the bank at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank and all of the holders of shares in the class or series of shares so issued consent to the exchange;

  • (b) under an agreement referred to in subsection 224(1); or

  • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank.

Marginal note:Exception — représentant personnel

• 72. (1) La banque — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir soit des actions de la banque ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.

Marginal note:Exception — conditions before acquisition

• 72.1 (1) A bank may permit its subsidiary to acquire shares of the bank, shares of an entity that controls the bank or any ownership interests of any unincorporated entity that controls the bank if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.

• Marginal note:Conditions after acquisition

  (2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.

• Marginal note:Non-compliance with conditions

  (3) Despite section 16 and subsection 66(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if

  • (a) the bank permits the subsidiary to acquire the shares or ownership interests; and

  • (b) either

    • (i) a condition prescribed for the purposes of subsection (1) was not met, or

    • (ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.

Marginal note:Signatures

• 86. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:

  • (a) a director or officer of the bank;

  • (b) a registrar or transfer agent of the bank or a branch transfer agent or a natural person on their behalf; or

  • (c) a trustee who certifies it in accordance with a trust indenture.

• Marginal note:Continuation of validity of signature

  (2) If a security certificate contains a person’s printed or mechanically reproduced signature, the bank may issue the security certificate even if the person has ceased to be a director or officer of the bank. The security certificate is as valid as if the person were a director or officer at the date of its issue.

Marginal note:Restrictions and charges

• 88. (1) No charge in favour of a bank and no restriction on transfer other than a constraint under Part VII is effective against a transferee of a security issued by the bank if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.

• Marginal note:No restriction

  (2) If any of the issued shares of a distributing bank remain outstanding and are held by more than one person, the bank may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.

• Marginal note:Continuance

  (3) If a body corporate that is continued as a bank under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).

Marginal note:Minors

94. If a minor exercises any rights of ownership in the securities of a bank, no subsequent repudiation or avoidance is effective against the bank.

• Marginal note:Participation by electronic means

  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

• Marginal note:Order to delay calling annual meeting

  (2) Despite subsection (1), the bank may apply to the court for an order extending the time for calling an annual meeting.

• Marginal note:Obligation to notify Superintendent

  (3) The bank shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.

• Marginal note:Superintendent’s right to appear

  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.

• Marginal note:Authority to fix record date

  (5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to

  • (a) receive payment of a dividend;

  • (b) participate in a liquidation distribution;

  • (c) receive notice of a meeting of shareholders; or

  • (d) vote at a meeting of shareholders.

• Marginal note:Determination of record date

  (6) If no record date is fixed,

  • (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is

    • (i) at the close of business on the day immediately preceding the day on which the notice is given, or

    • (ii) if no notice is given, the day on which the meeting is held; and

  • (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

• Marginal note:Notice of record date

  (7) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by

  • (a) advertisement in a newspaper in general circulation in the place where the bank’s head office is situated and in each place in Canada where the bank has a transfer agent or where a transfer of its shares may be recorded; and

  • (b) written notice to each stock exchange in Canada on which the bank’s shares are listed for trading.

Marginal note:Notice of meeting

• 138. (1) Notice of the time and place of a meeting of shareholders of a bank shall be sent within the prescribed period to

  • (a) each shareholder entitled to vote at the meeting;

  • (b) each director;

  • (c) the auditor or auditors of the bank; and

  • (d) the Superintendent.

• Marginal note:Exception

  (1.01) In the case of a bank that is not a distributing bank, notice may be sent within any shorter period specified in its by-laws.

Marginal note:Notice not required

• 139. (1) A notice of a meeting is not required to be sent to shareholders who are not registered on the records of the bank or the bank’s transfer agent on the record date fixed under paragraph 137(5)(c) or determined under paragraph 137(6)(a).

• Marginal note:Electronic voting

  (3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the bank makes one available.

• Marginal note:Voting while participating electronically

  (4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 136(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the bank has made available for that purpose.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.

• Marginal note:Evidence

  (3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (a) a record date has been fixed under paragraph 137(5)(c) and notice of it has been given under subsection 137(7);

Marginal note:Court may order meeting to be called

• 154. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if

  • (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;

  • (b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or

  • (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.

• Marginal note:Exception

  (2) The management of a bank is not required to send a form of proxy under subsection (1) if the bank

  • (a) is not a distributing bank; and

  • (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.

• Marginal note:Exceptions

  (1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if

  • (a) the total number of shareholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or

  • (b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.

• Marginal note:Vote by show of hands

  (3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,

Marginal note:Duty of intermediary

• 156.07 (1) Shares of a bank that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner

  • (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and

  • (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.

• Marginal note:When documents to be sent

  (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).

• Marginal note:Restriction on voting

  (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

• Marginal note:Copies

  (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).

• Marginal note:Instructions to intermediary

  (5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.

• Marginal note:Beneficial owner as proxyholder

  (6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

• Marginal note:Effect of intermediary’s failure to comply

  (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.

• Marginal note:Intermediary may not vote

  (8) Nothing in this Part gives an intermediary the right to vote shares that they are otherwise prohibited from voting.

Marginal note:Exemption

156.071 The Governor in Council may make regulations respecting the conditions under which a bank is exempt from any of the requirements of sections 156.02 to 156.07.

Marginal note:Election or appointment as director

165.1 The election or appointment of a person as a director is subject to the following:

• (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

• (b) the person was not present at the meeting when the election or appointment took place but

  • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

  • (ii) acted as a director after the election or appointment.

• (g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and

• (h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.

Marginal note:Directors filling vacancy

• 177. (1) Despite section 183 but subject to subsection (2) and sections 176 and 178, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.

• (a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;

• Marginal note:Director continues to be present

  (3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 203(1), present at any particular time during the meeting is considered to be present for the purposes of this section.

• Marginal note:Evidence

  (5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (b) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;

• (c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 62, except in accordance with any authorization made by the directors;

Marginal note:Disclosure of interest

• 202. (1) A director or officer of a bank shall disclose to the bank, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the bank, whether entered into or proposed, if they

  • (a) are a party to the contract or transaction;

  • (b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or

  • (c) have a material interest in a party to the contract or transaction.

• Marginal note:Time of disclosure — director

  (2) The disclosure shall be made in the case of a director

  • (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;

  • (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;

  • (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or

  • (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.

• Marginal note:Time of disclosure — officer

  (3) The disclosure shall be made in the case of an officer who is not a director

  • (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;

  • (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or

  • (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.

• Marginal note:Time of disclosure — contract not requiring approval

  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the bank, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.

Marginal note:Director to abstain

• 203. (1) A director who is required to make a disclosure under subsection 202(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction

  • (a) relates primarily to their remuneration as a director, officer, employee or agent of the bank, an entity controlled by the bank or an entity in which the bank has a substantial investment;

  • (b) is for indemnity under section 212 or insurance under section 213; or

  • (c) is with an affiliate of the bank.

Marginal note:General notice

• 204. (1) For the purposes of subsection 202(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

  • (a) the director or officer is a director or officer of a party referred to in paragraph 202(1)(b) or (c) or a person acting in a similar capacity;

  • (b) the director or officer has a material interest in the party; or

  • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

• Marginal note:Access to disclosures

  (2) The shareholders of the bank may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 202(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank.

Marginal note:Avoidance standards

• 205. (1) A contract or transaction for which disclosure is required under subsection 202(1) is not invalid and a director or officer is not accountable to the bank or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

  • (a) the director or officer disclosed their interest in accordance with section 202 and subsection 204(1);

  • (b) the directors approved the contract or transaction; and

  • (c) the contract or transaction was reasonable and fair to the bank at the time that it was approved.

• Marginal note:Confirmation by shareholders

  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

  • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;

  • (b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

  • (c) the contract or transaction was reasonable and fair to the bank at the time that it was approved or confirmed.

Marginal note:Court may set aside or require accounting

206. If a director or officer of a bank fails to comply with any of sections 202 to 205, a court, on application of the bank or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank for any profit or gain realized on it.

Marginal note:Director liability

• 207. (1) Directors of a bank who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 65(1) or the issue of subordinated indebtedness contrary to section 80 for a consideration other than money are jointly and severally, or solidarily, liable to the bank to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.

• Marginal note:Further liability

  (2) Directors of a bank who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank any amounts so distributed or paid and not otherwise recovered by the bank and any amounts in relation to any loss suffered by the bank:

  • (a) a redemption or purchase of shares contrary to section 71;

  • (b) a reduction of capital contrary to section 75;

  • (c) a payment of a dividend contrary to section 79;

  • (d) a payment of an indemnity contrary to section 212; or

  • (e) any transaction contrary to Part XI.

Marginal note:Directors liable for wages

• 210. (1) Subject to subsections (2) and (3), the directors of a bank are jointly and severally, or solidarily, liable to each employee of the bank for all debts not exceeding six months wages payable to the employee for services performed for the bank while they are directors.

Marginal note:Defence — due diligence

• 211. (1) A director, officer or employee of a bank is not liable under section 207 or 210 or subsection 506(1) and has fulfilled their duty under subsection 158(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the bank that were represented to them by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

• Marginal note:Defence — good faith

  (2) A director or officer of a bank has fulfilled their duty under subsection 158(1) if they relied in good faith on

  • (a) financial statements of the bank that were represented to them by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Indemnification

• 212. (1) A bank may indemnify a director or officer of the bank, a former director or officer of the bank or another person who acts or acted, at the bank’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank or other entity.

• Marginal note:Advances

  (2) A bank may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

• Marginal note:No indemnification

  (3) A bank may not indemnify a person under subsection (1) unless

  • (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank or the other entity for which they acted at the bank’s request as a director or officer or in a similar capacity; and

  • (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

• Marginal note:Indemnification — derivative actions

  (4) A bank may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

• Marginal note:Right to indemnity

  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank or other entity described in that subsection if the person

  • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

  • (b) fulfils the conditions set out in subsection (3).

• Marginal note:Heirs and personal representatives

  (6) A bank may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank may indemnify under those subsections.

• (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

• (j) change the province in which the head office of the bank is situated.

• (a) the name of the amalgamated bank and the province in which its head office is to be situated;

Marginal note:Head office

• 237. (1) A bank shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

• Marginal note:Change of head office

  (2) The directors of a bank may change the address of the head office within the province specified in the incorporating instrument or by-laws.

• Marginal note:Access to bank records

  (5) Shareholders and creditors of a bank and their personal representatives may examine the records referred to in subsection 238(1) during the usual business hours of the bank and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the bank is a distributing bank, any other person may on payment of a reasonable fee examine those records during the usual business hours of the bank and take extracts from them or have copies of them made.

• Marginal note:Entitlement to list

  (3) A shareholder or creditor of a bank or their personal representative — or if the bank is a distributing bank, any person — is entitled to a basic list of shareholders of the bank.

• Marginal note:Access to central securities register

  (3) Shareholders and creditors of a bank and their personal representatives may examine the central securities register during the usual business hours of the bank and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the bank is a distributing bank, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the bank and take extracts from it or have copies of it made.

• Marginal note:Electronic access

  (4) The bank may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.

• Marginal note:Affidavit and undertaking

  (5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the bank with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 242. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.

• Marginal note:Supplemental information

  (6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the bank or its agent to provide supplementary information setting out any changes made to the register.

• Marginal note:When supplementary information to be provided

  (7) A bank or its agent shall provide the supplementary information within

  • (a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and

  • (b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.

Marginal note:Corporate seal

• 256. (1) A bank may adopt a corporate seal and change one that it adopted.

• Marginal note:Validity of unsealed documents

  (2) A document executed on behalf of a bank is not invalid merely because a corporate seal is not affixed to it.

Marginal note:Insider report

266. An insider shall submit an insider report in accordance with the regulations.

Marginal note:Exemption by Superintendent

267. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 266. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.

Marginal note:Regulations

268. The Governor in Council may make regulations for carrying out the purposes of sections 266 and 267, including

• (a) defining “insider” for the purposes of sections 266 and 267;

• (b) respecting the form and content of an insider report; and

• (c) respecting the submission or publication of an insider report.

Meaning of “insider”

• 270. (1) In this section, “insider” means with respect to a distributing bank

  • (a) a director or officer of the bank;

  • (b) a director or officer of a subsidiary of the bank;

  • (c) a director or officer of a body corporate that enters into a business combination with the bank; or

  • (d) a person employed or retained by the bank.

• Marginal note:Prohibition — short sale

  (2) No insider may knowingly sell, directly or indirectly, a security of a distributing bank or of any of the distributing bank’s affiliates if the insider does not own or has not fully paid for the security.

• Marginal note:Exception

  (3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they

  • (a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

  • (b) transfer the convertible security, option or right to the purchaser.

• Marginal note:Prohibition — calls and puts

  (4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of a bank or of any of the bank’s affiliates.

Civil remedies

Extended meaning of “insider”

• 271. (1) In this section and sections 271.1 and 272, “insider” with respect to a bank means

  • (a) the bank;

  • (b) an affiliate of the bank;

  • (c) a director or officer of the bank or of any person described in paragraph (b), (d) or (f);

  • (d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the bank carrying more than the prescribed percentage of the voting rights attached to all of the bank’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;

  • (e) a person, other than a person described in paragraph (f), who is employed or retained by the bank or by a person described in paragraph (f);

  • (f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the bank;

  • (g) a person who received material confidential information concerning the bank while they were a person described in any of paragraphs (a) to (f);

  • (h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or

  • (i) a prescribed person.

• Extended meaning of “security”

  (2) For the purposes of this section, each of the following is deemed to be a security of a bank:

  • (a) a put, call, option or other right or obligation to purchase or sell a security of the bank; and

  • (b) a security of another entity, the market price of which varies materially with the market price of the securities of the bank.

• Marginal note:Deemed insider — take-over bid or business combination

  (3) For the purposes of this section and subsection 271.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a bank or to enter into a business combination with a bank is an insider of the bank with respect to material confidential information obtained from the bank.

• Marginal note:Deemed insider — affiliate or associate

  (4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the bank referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “bank” are to be read as references to “person described in subsection (3)”.

• Meaning of “associate”

  (5) In subsection (4), “associate” means with respect to a person

  • (a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;

  • (b) a partner of the person acting on behalf of the partnership of which they are partners;

  • (c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;

  • (d) a spouse or common-law partner of the person;

  • (e) a child of the person or of their spouse or common-law partner; or

  • (f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.

• Marginal note:Insider trading — compensation to sellers and purchasers

  (6) An insider of a bank who purchases or sells a security of the bank with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the bank is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that

  • (a) the insider reasonably believed that the information had been generally disclosed;

  • (b) the information was known or ought reasonably to have been known by the seller or purchaser; or

  • (c) the purchase or sale of the security took place in the prescribed circumstances.

• Marginal note:Insider trading — compensation to bank

  (7) The insider is accountable to the bank for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).

Marginal note:Tipping — compensation to sellers and purchasers

• 271.1 (1) An insider of a bank who discloses confidential information with respect to the bank that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the bank is liable to compensate any person who subsequently sells securities of the bank to or purchases them from any person who received the information unless the insider establishes that

  • (a) the insider reasonably believed that the information had been generally disclosed;

  • (b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;

  • (c) if the insider is not a person described in subsection 271(3) or (4), the disclosure of the information was necessary in the course of their business; or

  • (d) if the insider is a person described in subsection 271(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.

• Marginal note:Tipping — compensation to bank

  (2) The insider is accountable to the bank for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).

Marginal note:Measure of damages

• 272. (1) The court may assess damages under subsection 271(6) or 271.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing bank, the court shall consider the following:

  • (a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and

  • (b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.

• Marginal note:Liability — more than one insider

  (2) If more than one insider is liable under subsection 271(6) or 271.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

• Marginal note:Limitation

  (3) An action to enforce a right created by subsection 271(6) or (7) or section 271.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Prospectus

Marginal note:Distribution

• 273. (1) No person, including a bank, shall distribute securities of a bank except in accordance with the regulations made under subsection (2).

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the distribution of securities of a bank, including

  • (a) respecting the information that is to be disclosed by a bank before the distribution of any of its securities, including the information that is to be included in a prospectus;

  • (b) respecting the manner of disclosure and the form of the information that is to be disclosed; and

  • (c) exempting any class of distribution of securities from the application of subsection (1).

Marginal note:Order of exemption

• 274. (1) On application by a bank or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 273(2) if the Superintendent is satisfied that the bank has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.

• Marginal note:Conditions

  (2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.

Going-private Transactions and Squeeze-out Transactions

Marginal note:Going-private transactions

275. A bank may carry out a going-private transaction if it complies with any applicable provincial securities laws.

Marginal note:Squeeze-out transactions

276. No bank may carry out a squeeze-out transaction unless, in addition to any approval by holders of shares required by or under this Act or the bank’s by-laws, the transaction is approved by ordinary resolution of the holders of each class of shares affected by the transaction, voting separately, whether or not the shares otherwise carry the right to vote. However, the following do not have the right to vote on the resolution:

• (a) affiliates of the bank; and

• (b) holders of shares that following the squeeze-out transaction would be entitled to consideration of greater value or to superior rights or privileges than those available to other holders of shares of the same class.

Marginal note:Right to dissent

• 277. (1) A holder of shares of a bank may dissent if the bank resolves to carry out a going-private transaction or squeeze-out transaction that affects those shares.

• Marginal note:Payment for shares

  (2) In addition to any other right that the shareholder may have, but subject to subsection (25), a shareholder who complies with this section is, when the action approved by the resolution from which the shareholder dissents becomes effective, entitled to be paid by the bank the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted by the shareholders.

• Marginal note:No partial dissent

  (3) A dissenting shareholder may claim under this section only with respect to all of the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

• Marginal note:Objection

  (4) A dissenting shareholder shall send to the bank, at or before any meeting of shareholders at which a resolution referred to in subsection (2) is to be voted on by the shareholders, a written objection to the resolution unless the bank did not give notice to the shareholder of the purpose of the meeting and their right to dissent.

• Marginal note:Notice that resolution was adopted

  (5) The bank shall within 10 days after the day on which the shareholders adopt the resolution send to each shareholder who sent an objection under subsection (4) notice that the resolution was adopted. If it is necessary for the Minister or Superintendent to approve the transaction within the meaning of subsection 973(1) before it becomes effective, the bank shall send notice within 10 days after the approval. Notice is not required to be sent to a shareholder who voted for the resolution or one who has withdrawn their objection.

• Marginal note:Demand for payment

  (6) A dissenting shareholder shall within 20 days after receiving the notice referred to in subsection (5) — or, if they do not receive it, within 20 days after learning that the resolution was adopted by the shareholders — send to the bank a written notice containing

  • (a) their name and address;

  • (b) the number and class of shares in respect of which they dissent; and

  • (c) a demand for payment of the fair value of those shares.

• Marginal note:Share certificates

  (7) A dissenting shareholder shall within 30 days after sending a notice under subsection (6) send the certificates representing the shares in respect of which they dissent to the bank or its transfer agent.

• Marginal note:Forfeiture

  (8) A dissenting shareholder who fails to comply with subsection (7) has no right to make a claim under this section.

• Marginal note:Endorsing certificate

  (9) A bank or its transfer agent shall endorse on any share certificate received in accordance with subsection (7) a notice that the holder is a dissenting shareholder under this section and shall without delay return the share certificates to the dissenting shareholder.

• Marginal note:Suspension of rights

  (10) On sending a notice under subsection (6), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section. However, the shareholder’s rights are reinstated as of the date the notice was sent if

  • (a) the shareholder withdraws the notice before the bank makes an offer under subsection (11);

  • (b) the bank fails to make an offer in accordance with subsection (11) and the shareholder withdraws the notice; or

  • (c) the directors revoke under section 220 the special resolution that was made in respect of the going-private transaction or squeeze-out transaction.

• Marginal note:Offer to pay

  (11) A bank shall, no later than seven days after the later of the day on which the action approved by the resolution from which the shareholder dissents becomes effective and the day on which the bank received the notice referred to in subsection (6), send to each dissenting shareholder who sent a notice

  • (a) a written offer to pay for their shares in an amount considered by the directors of the bank to be the fair value, accompanied by a statement showing how the fair value was determined; or

  • (b) if subsection (25) applies, a notice that it is unable to lawfully pay dissenting shareholders for their shares.

• Marginal note:Same terms

  (12) Every offer made under subsection (11) for shares of the same class or series is to be on the same terms.

• Marginal note:Payment

  (13) Subject to subsection (25), a bank shall pay for the shares of a dissenting shareholder within 10 days after the day on which an offer made under subsection (11) is accepted, but the offer lapses if the bank does not receive an acceptance within 30 days after the day on which the offer is made.

• Marginal note:Court may fix fair value

  (14) If a bank fails to make an offer under subsection (11) or if a dissenting shareholder fails to accept an offer, the bank may, within 50 days after the day on which the action approved by the resolution from which the shareholder dissents becomes effective or within any further period that a court may allow, apply to the court to fix a fair value for the shares of any dissenting shareholder.

• Marginal note:Shareholder application

  (15) If a bank fails to apply to a court under subsection (14), a dissenting shareholder may apply to a court for the same purpose within a further period of 20 days or within any further period that the court may allow.

• Marginal note:Venue

  (16) An application under subsection (14) or (15) is to be made to a court having jurisdiction where the bank’s head office is situated or, if the bank carries on business in the province in which the dissenting shareholder resides, in that province.

• Marginal note:No security for costs

  (17) A dissenting shareholder is not required to give security for costs in an application made under subsection (14) or (15).

• Marginal note:Parties and Superintendent

  (18) On an application to a court under subsection (14) or (15),

  • (a) all dissenting shareholders whose shares have not been purchased by the bank are to be joined as parties and are bound by the decision of the court;

  • (b) the bank shall notify each of them of the date, place and consequences of the application and their right to appear and be heard in person or by counsel; and

  • (c) the bank shall notify the Superintendent of the date and place of the application and the Superintendent may appear and be heard in person or by counsel.

• Marginal note:Powers of court

  (19) On an application to a court under subsection (14) or (15), the court may determine whether any other person is a dissenting shareholder and is to be joined as a party and the court shall then fix a fair value for the shares of all dissenting shareholders.

• Marginal note:Appraisers

  (20) The court may appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

• Marginal note:Final order

  (21) The final order of the court is to be rendered against the bank in favour of each dissenting shareholder for the value of the shares as fixed by the court.

• Marginal note:Interest

  (22) The court may allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution from which the shareholder dissents becomes effective until the date of payment.

• Marginal note:Notice that s. (25) applies

  (23) If subsection (25) applies, the bank shall within 10 days after an order is made under subsection (21) notify each dissenting shareholder that it is unable to lawfully pay dissenting shareholders for their shares.

• Marginal note:Effect of s. (25)

  (24) If subsection (25) applies, a dissenting shareholder may by written notice delivered to the bank within 30 days after receiving notice under subsection (23)

  • (a) withdraw their notice of dissent, in which case the bank is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or

  • (b) retain their status as a claimant against the bank, to be paid as soon as the bank is able to lawfully pay them or, in a liquidation, to be ranked subordinate to the rights of the bank’s creditors but in priority to its shareholders.

• Marginal note:Limitation

  (25) A bank may not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that the bank is or the payment would cause the bank to be in contravention of a regulation referred to in subsection 485(1) or (2) or of an order made under subsection 485(3).

Marginal note:Droit d’acquérir des actions

284. Le pollicitant peut, en se conformant aux articles 285 à 290, aux paragraphes 291(1) et (2) et à l’article 292, acquérir les actions des pollicités opposants lorsque l’offre d’achat visant à la mainmise est, dans les cent vingt jours suivant la date où elle est faite, acceptée par les détenteurs d’au moins quatre-vingt-dix pour cent des actions de la catégorie en cause, sans qu’il soit tenu compte des actions détenues à la date de l’offre d’achat visant à la mainmise, même indirectement, par lui-même, les personnes morales de son groupe ou ses associés.

Marginal note:Share certificates and election

286. A dissenting offeree to whom a notice is sent under subsection 285(1) shall within 20 days after receiving the notice

• (a) send to the offeree bank the share certificates representing the shares to which the take-over bid relates; and

• (b) elect to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid or to demand payment of the fair value of the shares in accordance with sections 289 to 292 by notifying the offeror.

Marginal note:Deemed election

286.1 A dissenting offeree who does not notify the offeror in accordance with paragraph 286(b) is deemed to have elected to transfer the shares to the offeror on the same terms as those on which the offeror acquired shares from the offerees who accepted the take-over bid.

Marginal note:Payment to offeree bank

• 287. (1) Within 20 days after the offeror sends a notice under subsection 285(1), the offeror shall pay the money, or transfer the other consideration, to the offeree bank that the offeror would have had to pay or transfer to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 286(b).

Marginal note:Fiduciary capacity of bank

287.1 A bank that is making a take-over bid to repurchase all of the shares of a class is deemed to hold in a fiduciary capacity for the dissenting shareholders the money that it would have had to pay, and the other consideration that it would have had to transfer, to a dissenting offeree if the dissenting offeree had elected to transfer their shares in accordance with paragraph 286(b). The bank shall within 20 days after a notice is sent under subsection 285(1) deposit the money in a separate account in another deposit-taking financial institution in Canada and place any other consideration in the custody of another deposit-taking financial institution in Canada.

• (a) if the payment or transfer required by subsection 287(1) is made, issue to the offeror a share certificate in respect of the shares that were held by the dissenting offerees;

• (b) give to each dissenting offeree who elects to transfer shares under paragraph 286(b) and who sends the share certificates as required under paragraph 286(a) the money or other consideration to which they are entitled, disregarding fractional shares, which may be paid for in money; and

• (c) if the payment or transfer required by subsection 287(1) is made and the money or other consideration is deposited as required by subsections 287(2) and (3) or by section 287.1, send to each dissenting offeree who has not sent share certificates as required under paragraph 286(a) a notice stating that

  • (i) their shares have been cancelled,

  • (ii) the offeree bank or its designated person holds in a fiduciary capacity for that offeree the money or other consideration to which they are entitled as payment for or in exchange for the shares, and

  • (iii) the offeree bank will, subject to sections 289 to 292, send that money or other consideration to that offeree without delay after receiving the share certificates.

Marginal note:Court may fix fair value

• 289. (1) If a dissenting offeree has elected to demand payment of the fair value of their shares under paragraph 286(b), the offeror may, within 20 days after it has paid the money or transferred the other consideration under subsection 287(1), apply to a court to fix the fair value of the shares of that dissenting offeree.

• (a) all dissenting offerees who have made elections to demand payment under paragraph 286(b) and whose shares have not been acquired by the offeror shall be joined as parties and are bound by the decision of the court; and

• (a) fix the amount of money or other consideration that is deemed to be held in a fiduciary capacity under subsection 287(2) or section 287.1;

Marginal note:Obligation to acquire shares

• 292.1 (1) If a shareholder who holds shares of an offeree bank does not receive the notice referred to in subsection 285(1), the shareholder may require the offeror to acquire the shares

  • (a) within 90 days after the date of termination of the take-over bid; or

  • (b) if the shareholder did not receive an offer under the take-over bid, within 90 days after the later of

    • (i) the date of termination of the take-over bid, and

    • (ii) the day on which the shareholder learned of the take-over bid.

• Marginal note:Acquisition on same terms

  (2) If the shareholder requires the offeror to acquire shares, the offeror shall acquire them on the same terms as those on which the offeror acquires shares from offerees who accept the take-over bid.

• Marginal note:Annual statement — contents

  (2) With respect to each of the financial years to which it relates, the annual statement of a bank must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accord­ance with the accounting principles referred to in subsection (4), the financial position of the bank as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the bank for that financial year.

Marginal note:Annual statement — approval

• 309. (1) The directors of a bank shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of

Marginal note:Annual statement — distribution

• 311. (1) A bank shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 152(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 308(1) and (3) unless that time period is waived by the shareholder.

• Marginal note:Other statements

  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the bank shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

• Marginal note:Statements to be sent

  (2) The bank shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.

• (d) the auditor or auditors shall, at the time of transmitting the report to the chief executive officer and chief financial officer, provide the audit committee of the bank and the Superintendent with a copy.

• (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the bank or the bank’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the bank or the bank’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

Marginal note:Absence de cautionnement

• 337. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.

• b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;

Marginal note:Due diligence

354. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

• (a) financial statements of the bank represented to the liquidator by an officer of the bank or in a written report of the auditor or auditors of the bank fairly to reflect the financial condition of the bank; or

• (b) a report of a person whose profession lends credibility to a statement made by them.

• (b) the province in which the principal office of the authorized foreign bank is to be situated;

• (a) change the name under which it is permitted to carry on business in Canada or the province in which its principal office is to be situated as that name or province is set out in the order made under subsection 524(1) or in any other order made under this section;

Marginal note:Principal office

• 535. (1) An authorized foreign bank shall at all times have a principal office in the province specified in the order made under subsection 524(1) or 528(1) with respect to it.

• Marginal note:Change of principal office

  (2) An authorized foreign bank may change the address of its principal office within the province specified in the order made under subsection 524(1) or 528(1) with respect to it.

Marginal note:Authority of directors, officers and representatives

• 669. (1) No bank holding company and no guarantor of an obligation of a bank holding company may assert against a person dealing with the bank holding company or against a person who has acquired rights from the bank holding company that

  • (a) the bank holding company’s incorporating instrument or any by-laws of the bank holding company have not been complied with;

  • (b) the persons named as directors of the bank holding company in the most recent return sent to the Superintendent under section 951 are not the directors of the bank holding company;

  • (c) the place named in the incorporating instrument or by-laws of the bank holding company is not the place where the head office of the bank holding company is situated;

  • (d) a person held out by the bank holding company as a director, officer or representative of the bank holding company has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the bank holding company or usual for a director, officer or representative; or

  • (e) a document issued by any director, officer or representative of the bank holding company with actual or usual authority to issue the document is not valid or not genuine.

• Marginal note:Exception — knowledge

  (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the bank holding company.

• (b) the province in which the head office of the bank holding company is to be situated; and

• (b) the province in which the head office of the bank holding company is situated.

• Marginal note:Exception

  (3) Despite subsection (2), a bank holding company may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act,

    • (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act, or

    • (iii) property of a person who immediately before the exchange dealt with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank holding company and all of the holders of shares in the class or series of shares so issued consent to the exchange;

  • (b) under an agreement referred to in subsection 804(1); or

  • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank holding company.

Marginal note:Exception — représentant personnel

• 716. (1) La société de portefeuille bancaire peut autoriser ses filiales à détenir, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, soit des actions de la société ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.

Marginal note:Exception — conditions before acquisition

• 716.1 (1) A bank holding company may permit its subsidiary to acquire shares of the bank holding company, shares of an entity that controls the bank holding company or any ownership interests of any unincorporated entity that controls the bank holding company if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.

• Marginal note:Conditions after acquisition

  (2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.

• Marginal note:Non-compliance with conditions

  (3) Despite section 665 and subsection 710(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if

  • (a) the bank holding company permits the subsidiary to acquire the shares or ownership interests; and

  • (b) either

    • (i) a condition prescribed for the purposes of subsection (1) was not met, or

    • (ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.

• (e) the reference to “subsections 137(5) to (7) and sections 138 to 141 and 145” in subsection 93(1) is to be read as a reference to “subsections 726(5) to (7) and sections 727 to 730 and 734”; and

• Marginal note:Participation by electronic means

  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank holding company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Part to be present at the meeting.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

• Marginal note:Order to delay calling annual meeting

  (2) Despite subsection (1), the bank holding company may apply to the court for an order extending the time for calling an annual meeting.

• Marginal note:Obligation to notify Superintendent

  (3) The bank holding company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.

• Marginal note:Superintendent’s right to appear

  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.

• Marginal note:Authority to fix record date

  (5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to

  • (a) receive payment of a dividend;

  • (b) participate in a liquidation distribution;

  • (c) receive notice of a meeting of shareholders; or

  • (d) vote at a meeting of shareholders.

• Marginal note:Determination of record date

  (6) If no record date is fixed,

  • (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is

    • (i) at the close of business on the day immediately preceding the day on which the notice is given, or

    • (ii) if no notice is given, the day on which the meeting is held; and

  • (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

• Marginal note:Notice of record date

  (7) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by

  • (a) advertisement in a newspaper in general circulation in the place where the bank holding company’s head office is situated and in each place in Canada where the bank holding company has a transfer agent or where a transfer of its shares may be recorded; and

  • (b) written notice to each stock exchange in Canada on which the bank holding company’s shares are listed for trading.

Marginal note:Notice of meeting

• 727. (1) Notice of the time and place of a meeting of shareholders of a bank holding company shall be sent within the prescribed period to

  • (a) each shareholder entitled to vote at the meeting;

  • (b) each director;

  • (c) the auditor of the bank holding company; and

  • (d) the Superintendent.

• Marginal note:Exception

  (1.1) In the case of a bank holding company that is not a distributing bank holding company, notice may be sent within any shorter period specified in its by-laws.

Marginal note:Notice not required

• 728. (1) A notice of a meeting is not required to be sent to shareholders who are not registered on the records of the bank holding company or the bank holding company’s transfer agent on the record date fixed under paragraph 726(5)(c) or determined under paragraph 726(6)(a).

Marginal note:Proposals

• 732. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares that may be voted at an annual meeting of shareholders may

  • (a) submit to the bank holding company notice of any matter that they propose to raise at the meeting (in this section and section 733 referred to as a “proposal”); and

  • (b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.

• Marginal note:Eligibility to submit proposal

  (1.1) To be eligible to submit a proposal a person shall

  • (a) for at least the prescribed period be the registered holder or beneficial owner of at least the prescribed number of the bank holding company’s outstanding shares; or

  • (b) have the support of persons who, in the aggregate and including or not including the person who submits the proposal, have for at least the prescribed period been the registered holders or beneficial owners of at least the prescribed number of the bank holding company’s outstanding shares.

• Marginal note:Information to be provided

  (1.2) A proposal is to be accompanied by the following information:

  • (a) the name and address of the person submitting the proposal and the names and addresses of their supporters, if any; and

  • (b) the number of shares held or owned by the person and their supporters, if any, and the date that the shares were acquired.

• Marginal note:Information not part of proposal

  (1.3) The information provided under subsection (1.2) does not form part of a proposal or of the supporting statement referred to in subsection (3) and is not to be included for the purpose of the prescribed maximum number of words referred to in subsection (3).

• Marginal note:Proof may be required

  (1.4) If the bank holding company requests within the prescribed period that a person provide proof that they are eligible to submit a proposal, the person shall within the prescribed period provide proof that they meet the requirements of subsection (1.1).

• Marginal note:Circulation of proposal

  (2) A bank holding company that solicits proxies shall set out in the management proxy circular required by subsection 156.05(1) or attach to it any proposal submitted for consideration at a meeting of shareholders.

• Marginal note:Supporting statement

  (3) At the request of the person who submits a proposal, the bank holding company shall set out in the management proxy circular or attach to it the person’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words.

• Marginal note:Nomination of directors

  (4) A proposal may include nominations for the election of directors if it is signed by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5% of the shares of the bank holding company or 5% of the shares of a class of its shares entitled to vote at the meeting at which the proposal is to be presented.

• Marginal note:Exemption

  (5) A bank holding company is not required to comply with subsections (2) and (3) if

  • (a) the proposal is not submitted to the bank holding company at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to shareholders in respect of the previous annual meeting of shareholders;

  • (b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the bank holding company or its directors, officers or security holders;

  • (b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the bank holding company;

  • (c) the person submitting the proposal failed within the prescribed period before the bank holding company receives their proposal to present, in person or by proxy, at a meeting of shareholders a proposal that at their request had been set out in or attached to a management proxy circular;

  • (d) substantially the same proposal was set out in or attached to a management proxy circular or dissident’s proxy circular relating to, and presented to shareholders at, a meeting of shareholders held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or

  • (e) the rights conferred by subsections (1) to (4) are being abused to secure publicity.

• Marginal note:Bank holding company may refuse to include proposal

  (5.1) If a person who submits a proposal fails to continue to hold or own shares in accordance with paragraph (1.1)(a) or, as the case may be, does not continue to have the support of persons who are in the aggregate the registered holders or beneficial owners of the prescribed number of shares in accordance with paragraph (1.1)(b) until the end of the meeting, the bank holding company is not required to set out any proposal submitted by that person in or attach it to a management proxy circular for any meeting held within the prescribed period after the day of the meeting.

• Marginal note:Electronic voting

  (3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the bank holding company makes one available.

• Marginal note:Voting while participating electronically

  (4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders under subsection 725(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the bank holding company has made available for that purpose.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders by means of a telephonic, electronic or other communication facility.

• Marginal note:Evidence

  (3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (a) a record date has been fixed under paragraph 726(5)(c) and notice of it has been given under subsection 726(7);

Marginal note:Court may order meeting to be called

• 743. (1) A court may, on the application of a director, a shareholder who is entitled to vote at a meeting of shareholders or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if

  • (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;

  • (b) it is impracticable to conduct the meeting in the manner required by this Part or the by-laws; or

  • (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.

• (f) the reference to “paragraph 143(1.1)(b)” in subparagraph (b)(vi) of the definition “solicitation” in section 156.01 is to be read as a reference to “paragraph 732(1.1)(b)”.

Marginal note:Election or appointment as director

753.1 The election or appointment of a person as a director is subject to the following:

• (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

• (b) the person was not present at the meeting when the election or appointment took place but

  • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

  • (ii) acted as a director after the election or appointment.

• (g) a director may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion; and

• (h) the number of directors required by the by-laws may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws and the number of votes cast against the motion.

Marginal note:Directors filling vacancy

• 765. (1) Despite section 772 but subject to subsection (2) and sections 764 and 766, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.

• (a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;

• Marginal note:Director continues to be present

  (3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 790(1), present at any particular time during the meeting is considered to be present for the purposes of this section.

• Marginal note:Evidence

  (5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (b) fill a vacancy among the directors, on a committee of directors or in the office of auditor or appoint additional directors;

• (c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 706, except in accordance with any authorization made by the directors;

Marginal note:Disclosure of interest

• 789. (1) A director or officer of a bank holding company shall disclose to the bank holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the bank holding company, whether entered into or proposed, if they

  • (a) are a party to the contract or transaction;

  • (b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or

  • (c) have a material interest in a party to the contract or transaction.

• Marginal note:Time of disclosure — director

  (2) The disclosure shall be made in the case of a director

  • (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;

  • (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;

  • (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or

  • (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.

• Marginal note:Time of disclosure — officer

  (3) The disclosure required by subsection (1) shall be made in the case of an officer who is not a director

  • (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;

  • (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or

  • (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.

• Marginal note:Time of disclosure — contract not requiring approval

  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank holding company’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the bank holding company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.

Marginal note:Director to abstain

• 790. (1) A director who is required to make a disclosure under subsection 789(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction

  • (a) relates primarily to their remuneration as a director, officer, employee or agent of the bank holding company, an entity controlled by the bank holding company or an entity in which the bank holding company has a substantial investment;

  • (b) is for indemnity under section 799 or insurance under section 800; or

  • (c) is with an affiliate of the bank holding company.

Marginal note:General notice

• 791. (1) For the purposes of subsection 789(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

  • (a) the director or officer is a director or officer of a party referred to in paragraph 789(1)(b) or (c) or a person acting in a similar capacity;

  • (b) the director or officer has a material interest in the party; or

  • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

• Marginal note:Access to disclosures

  (2) The shareholders of the bank holding company may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 789(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank holding company.

Marginal note:Avoidance standards

• 792. (1) A contract or transaction for which disclosure is required under subsection 789(1) is not invalid and a director or officer is not accountable to the bank holding company or its shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

  • (a) the director or officer disclosed their interest in accordance with section 789 and subsection 791(1);

  • (b) the directors approved the contract or transaction; and

  • (c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved.

• Marginal note:Confirmation by shareholders

  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank holding company or its shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

  • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders;

  • (b) disclosure of the interest was made to the shareholders in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

  • (c) the contract or transaction was reasonable and fair to the bank holding company at the time that it was approved or confirmed.

Marginal note:Court may set aside or require accounting

793. If a director or officer of a bank holding company fails to comply with any of sections 789 to 792, a court, on application of the bank holding company or any of its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank holding company for any profit or gain realized on it.

Marginal note:Director liability

• 794. (1) Directors of a bank holding company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 709(1) or the issue of subordinated indebtedness contrary to section 723 for a consideration other than money are jointly and severally, or solidarily, liable to the bank holding company to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank holding company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.

• Marginal note:Further liability

  (2) Directors of a bank holding company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank holding company any amounts so distributed or paid and not otherwise recovered by the bank holding company and any amounts in relation to any loss suffered by the bank holding company:

  • (a) a redemption or purchase of shares contrary to section 715;

  • (b) a reduction of capital contrary to section 718;

  • (c) a payment of a dividend contrary to section 722; or

  • (d) a payment of an indemnity contrary to section 799.

Marginal note:Directors liable for wages

• 797. (1) Subject to subsections (2) and (3), the directors of a bank holding company are jointly and severally, or solidarily, liable to each employee of the bank holding company for all debts not exceeding six months wages payable to the employee for services performed for the bank holding company while they are directors.

Marginal note:Defence — due diligence

• 798. (1) A director, officer or employee of a bank holding company is not liable under section 794 or 797 and has fulfilled their duty under subsection 748(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

• Marginal note:Defence — good faith

  (2) A director or officer of a bank holding company has fulfilled their duty under subsection 748(1) if they relied in good faith on

  • (a) financial statements of the bank holding company that were represented to them by an officer of the bank holding company or in a written report of the auditor of the bank holding company fairly to reflect the financial condition of the bank holding company; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Indemnification

• 799. (1) A bank holding company may indemnify a director or officer of the bank holding company, a former director or officer of the bank holding company or another person who acts or acted, at the bank holding company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the bank holding company or other entity.

• Marginal note:Advances

  (2) A bank holding company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

• Marginal note:No indemnification

  (3) A bank holding company may not indemnify a person under subsection (1) unless

  • (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the bank holding company or the other entity for which they acted at the bank holding company’s request as a director or officer or in a similar capacity; and

  • (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

• Marginal note:Indemnification — derivative actions

  (4) A bank holding company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the bank holding company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the bank holding company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

• Marginal note:Right to indemnity

  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the bank holding company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the bank holding company or other entity described in that subsection if the person

  • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

  • (b) fulfils the conditions set out in subsection (3).

• Marginal note:Heirs and personal representatives

  (6) A bank holding company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the bank holding company may indemnify under those subsections.

• (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the bank holding company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

• (a) the name of the amalgamated bank holding company and the province in which its head office is to be situated;

Marginal note:Head office

• 814. (1) A bank holding company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

• Marginal note:Change of head office

  (2) The directors of a bank holding company may change the address of the head office within the province specified in the incorporating instrument or by-laws.

• Marginal note:Access to bank holding company records

  (4) Shareholders and creditors of a bank holding company and their personal representatives may examine the records referred to in subsection 815(1) during the usual business hours of the bank holding company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the bank holding company is a distributing bank holding company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the bank holding company and take extracts from them or have copies of them made.

• Marginal note:Entitlement to list

  (3) A shareholder or creditor of a bank holding company or their personal representative — or if the bank holding company is a distributing bank holding company, any person — is entitled to a basic list of shareholders of the bank holding company.

Marginal note:Location and processing of information or data

• 822. (1) Subject to subsection (3), a bank holding company shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 815 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the bank holding company from the application of this section.

• Marginal note:Copies

  (2) Subject to subsections (3) and (4), the bank holding company may maintain copies of the records referred to in section 815 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.

• Marginal note:Access to central securities register

  (3) Shareholders and creditors of a bank holding company and their personal representatives may examine the central securities register during the usual business hours of the bank holding company and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the bank holding company is a distributing bank holding company, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the bank holding company and take extracts from it or have copies of it made.

• Marginal note:Electronic access

  (4) The bank holding company may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.

• Marginal note:Affidavit and undertaking

  (5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the bank holding company with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of shareholders may be used under section 819. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.

• Marginal note:Supplemental information

  (6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the bank holding company or its agent to provide supplementary information setting out any changes made to the register.

• Marginal note:When supplementary information to be provided

  (7) A bank holding company or its agent shall provide the supplementary information within

  • (a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and

  • (b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.

Marginal note:Corporate seal

• 833. (1) A bank holding company may adopt a corporate seal and change one that it adopted.

• Marginal note:Validity of unsealed documents

  (2) A document executed on behalf of a bank holding company is not invalid merely because a corporate seal is not affixed to it.

Insiders

Marginal note:Ss. 265 to 272 apply

834. Sections 265 to 272 apply in respect of bank holding companies except that references to “bank” are to be read as references to “bank holding company”.

Prospectus

Marginal note:Ss. 273 and 274 apply

835. Sections 273 and 274 apply in respect of bank holding companies except that references to “bank” are to be read as references to “bank holding company”.

Going-private Transactions and Squeeze-out Transactions

Marginal note:Ss. 275 to 277 apply

835.1 Sections 275 to 277 apply in respect of bank holding companies subject to the following:

• (a) references to “bank” are to be read as references to “bank holding company”;

• (b) the reference to “this Act” in section 276 is to be read as a reference to “this Part”; and

• (c) the reference to “a regulation referred to in subsection 485(1) or (2) or of an order made under subsection 485(3)” in subsection 277(25) is to be read as a reference to “a regulation referred to in subsection 949(1) or (2) or of an order made under subsection 949(3)”.

Marginal note:Ss. 283 to 292.1 apply

836. Sections 283 to 292.1 apply in respect of bank holding companies, subject to the following:

• Marginal note:Annual statement — contents

  (2) With respect to each of the financial years to which it relates, the annual statement of a bank holding company must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the bank holding company as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the bank holding company for that financial year.

Marginal note:Annual statement — approval

• 841. (1) The directors of a bank holding company shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of

Marginal note:Annual statement — distribution

• 843. (1) A bank holding company shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 741(1)(b) in lieu of the annual meeting, send to each shareholder a copy of the documents referred to in subsections 840(1) and (3) unless that time period is waived by the shareholder.

• Marginal note:Other statements

  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the bank holding company shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

• Marginal note:Statements to be sent

  (2) The bank holding company shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder entitled to vote at the annual meeting of shareholders and to the Superintendent.

Marginal note:Auditor of subsidiaries

• 860. (1) A bank holding company shall take all necessary steps to ensure that

  • (a) its auditor is the auditor of each of its subsidiaries; and

  • (b) in the case of a subsidiary with more than one auditor, the auditor of the bank holding company is one of the subsidiary’s auditors.

Marginal note:Execution of documents

964.1 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act.

• Marginal note:Undelivered notices

  (2) If a bank or bank holding company sends a notice or document to a shareholder in accordance with section 965 and it is returned on two consecutive occasions because the shareholder cannot be found, the bank or bank holding company is not required to send any further notices or documents to the shareholder until it is informed in writing of their new address.

Marginal note:Mentions au registre des valeurs mobilières

970. Les mentions au registre des valeurs mobilières et sur les certificats de valeurs mobilières émis par la banque ou la société de portefeuille bancaire établissent que les personnes au nom desquelles les valeurs mobilières sont inscrites sont propriétaires des valeurs mentionnées dans le registre ou sur les certificats.

• Marginal note:Incorporation by reference

  (2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.

• Marginal note:Incorporated material is not a regulation

  (3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.

Marginal note:Appeal of final order

• 990. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.

• Marginal note:Appeal with leave

  (2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.

PART XVIIIDOCUMENTS IN ELECTRONIC OR OTHER FORM

Marginal note:Definitions

992. The following definitions apply in this Part.

“electronic document”

« document électronique »

“electronic document” means, except in section 1001, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.

“information system”

« système de traitement de l’information »

“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.

Marginal note:Application

993. This Part other than sections 1004 and 1005 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent, the Commissioner or the Bank of Canada or any prescribed notice, document or information.

Marginal note:Use not mandatory

994. Nothing in this Act or the regulations requires a person to create or provide an electronic document.

Marginal note:Consent and other requirements

• 995. (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless

  • (a) the addressee consents and designates an information system for the receipt of the electronic document;

  • (b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and

  • (c) the prescribed requirements are complied with.

• Marginal note:Regulations — revocation of consent

  (2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a).

Marginal note:Creation or provision of information

996. A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if

• (a) the incorporating instrument or by-laws of the bank, bank holding company or authorized foreign bank, as the case may be, do not provide otherwise; and

• (b) the prescribed requirements are complied with.

Marginal note:Creation of information in writing

997. A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 996

• (a) the information in the electronic document is accessible so as to be usable for subsequent reference; and

• (b) the prescribed requirements are complied with.

Marginal note:Provision of information in writing

998. A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 996

• (a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and

• (b) the prescribed requirements are complied with.

Marginal note:Multiple copies

999. A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document.

Marginal note:Registered mail

1000. A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances.

Marginal note:Statutory declarations and affidavits

• 1001. (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if

  • (a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature;

  • (b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and

  • (c) the requirements of sections 994 to 1000 are complied with.

• Marginal note:Definitions

  (2) For the purposes of this section, “electron­ic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

• Marginal note:References to “electronic document”

  (3) For the purpose of complying with paragraph (1)(c), references to “electronic document” in sections 994 to 1000 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act”.

Marginal note:Signatures

1002. A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved:

• (a) the signature resulting from the use by the person of the technology or process is unique to the person;

• (b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and

• (c) the technology or process can be used to identify the person using the technology or process.

Marginal note:Regulations — provision and receipt of documents

1003. The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received.

Marginal note:Content and form of notices and documents

1004. The Minister, Superintendent, Commissioner or Bank of Canada may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including

• (a) the notices and documents that may be sent in electronic or other form;

• (b) the persons or classes of persons who may send notices and documents;

• (c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;

• (d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and

• (e) any matter necessary for the purposes of the application of this section.

Marginal note:Exemption

1005. In the prescribed circumstances, the Minister, Superintendent, Commissioner or Bank of Canada may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province.

Marginal note:Regulations — distributing association

• 2.1 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing association for the purposes of this Act.

• Marginal note:Exemption — association

  (2) On the application of an association, the Superintendent may determine that it is not or was not a distributing association if the Superintendent is satisfied that the determination would not prejudice any of its security holders.

• Marginal note:Exemption — class of associations

  (3) The Superintendent may determine that members of a class of associations are not or were not distributing associations if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.

Marginal note:Authority of directors and officers

• 21. (1) No association and no guarantor of an obligation of an association may assert against a person dealing with the association or against a person who has acquired rights from the association that

  • (a) the association’s incorporating instrument or any by-laws of the association have not been complied with;

  • (b) the persons named as directors of the association in the most recent return sent to the Superintendent under section 432 are not the directors of the association;

  • (c) the place named in the incorporating instrument or by-laws of the association is not the place where the head office of the association is situated;

  • (d) a person held out by the association as a director, officer or representative of the association has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the association or usual for a director, officer or representative; or

  • (e) a document issued by any director, officer or representative of the association with actual or usual authority to issue the document is not valid or not genuine.

• Marginal note:Exception — knowledge

  (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the association.

• (b) the province in which the head office of the association is to be situated; and

• Marginal note:Continued association

  (3) Except in respect of a body corporate that is continued as an association under this Act for the purpose of immediately amalgamating with one or more bodies corporate and continuing as an association under this Act, if letters patent continuing a body corporate as an association under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the association.

• Marginal note:Amalgamated association

  (4) If letters patent amalgamating and continuing two or more bodies corporate as an association under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the association.

• Marginal note:S. 57(2) and s. 60 do not apply

  (5) For greater certainty, subsection 57(2) and section 60 do not apply in respect of an association referred to in subsection (3) or (4).

• Marginal note:Exception

  (2.1) Despite subsection (2), an association may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the association at arm’s length within the meaning of that expression in the Income Tax Act or property of any prescribed person,

    • (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the association at arm’s length within the meaning of that expression in the Income Tax Act or shares of or another interest in any prescribed entity, or

    • (iii) property of a person who immediately before the exchange dealt with the association at arm’s length within the meaning of that expression in the Income Tax Act if the person, the association and all of the holders of shares in the class or series of shares so issued consent to the exchange;

  • (b) under an agreement referred to in subsection 227(1); or

  • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated association.

Marginal note:Exception — représentant personnel

• 80. (1) L’association — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir des parts sociales ou des actions de l’association.

Marginal note:Exception — conditions before acquisition

• 80.1 (1) An association may permit its subsidiary to acquire shares of the association or of an entity that controls the association if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.

• Marginal note:Conditions after acquisition

  (2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.

• Marginal note:Non-compliance with conditions

  (3) Despite section 17 and subsection 75(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if

  • (a) the association permits the subsidiary to acquire the shares or ownership interests; and

  • (b) either

    • (i) a condition prescribed for the purposes of subsection (1) was not met, or

    • (ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.

Marginal note:Signatures

• 93. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:

  • (a) a director or officer of the association;

  • (b) a registrar or transfer agent of the association or a branch transfer agent or a natural person on their behalf; or

  • (c) a trustee who certifies it in accordance with a trust indenture.

• Marginal note:Continuation of validity of signature

  (2) If a security certificate contains a person’s printed or mechanically reproduced signature, the association may issue the security certificate even if the person has ceased to be a director or officer of the association. The security certificate is as valid as if the person were a director or officer at the date of its issue.

Marginal note:Restrictions and charges

• 95. (1) No charge in favour of an association and no restriction on transfer other than a constraint under Part VIII is effective against a transferee of a security issued by the association if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.

• Marginal note:No restriction

  (2) If any of the issued shares of a distributing association remain outstanding and are held by more than one person, the association may not restrict the transfer or ownership of its shares except by way of a constraint under Part VIII.

Marginal note:Minors

101. If a minor exercises any rights of ownership in the securities of an association, no subsequent repudiation or avoidance is effective against the association.

• Marginal note:Participation by electronic means

  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of members or shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the association makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

• Marginal note:Order to delay calling annual meeting

  (2) Despite subsection (1), the association may apply to the court for an order extending the time for calling an annual meeting.

• Marginal note:Obligation to notify Superintendent

  (3) The association shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.

• Marginal note:Superintendent’s right to appear

  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.

Marginal note:Authority to fix record date

• 145. (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders for any purpose, including for a determination of which shareholders are entitled to

  • (a) receive payment of a dividend;

  • (b) receive notice of a meeting of shareholders; or

  • (c) vote at a meeting of shareholders.

• Marginal note:Determination of record date

  (2) If no record date is fixed

  • (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders is

    • (i) at the close of business on the day immediately preceding the day on which the notice is given, or

    • (ii) if no notice is given, the day on which the meeting is held; and

  • (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

• Marginal note:Notice of record date

  (3) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by

  • (a) advertisement in a newspaper in general circulation in the place where the association’s head office is situated and in each place in Canada where the association has a transfer agent or where a transfer of its shares may be recorded; and

  • (b) written notice to each stock exchange in Canada on which the association’s shares are listed for trading.

Marginal note:Notice of meeting

• 146. (1) Notice of the time and place of a meeting of an association’s members or shareholders shall be sent within the prescribed period to

  • (a) each member;

  • (b) each shareholder entitled to vote at the meeting;

  • (c) each director;

  • (d) the auditor of the association; and

  • (e) the Superintendent.

• Marginal note:Exception

  (1.1) In the case of an association that is not a distributing association, notice may be sent within any shorter period specified in its by-laws.

Marginal note:Notice not required

• 147. (1) Notice of a meeting is not required to be sent to shareholders who are not registered on the records of the association or the association’s transfer agent on the record date fixed under paragraph 145(1)(b) or determined under paragraph 145(2)(a).

Marginal note:Proposals

• 152. (1) A member may

  • (a) submit to the association notice of any matter that they propose to raise at an annual meeting of the association (in this section and section 153 referred to as a “proposal”); and

  • (b) discuss at the meeting any matter in respect of which they would have been entitled to submit a proposal.

• Marginal note:Supporting statement

  (2) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting and, at the request of the member who submits the proposal, the association shall attach to the notice of the meeting the member’s statement in support of the proposal and their name and address. The statement and proposal together are not to exceed the prescribed maximum number of words and the name and address do not form part of the proposal or of the supporting statement and are not to be included for the purposes of the prescribed maximum word limit.

• Marginal note:Exemption

  (3) An association is not required to comply with subsection (2) if

  • (a) the proposal is not submitted to the association at least the prescribed number of days before the anniversary date of the notice of meeting that was sent in respect of the previous annual meeting;

  • (b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal griev­ance against the association or its directors, officers, members or security holders;

  • (b.1) it clearly appears that the proposal does not relate in a significant way to the business or affairs of the association;

  • (c) the member submitting the proposal failed within the prescribed period before the association receives their proposal to present at a meeting a proposal that at their request had been attached to a notice of a meeting;

  • (d) substantially the same proposal was attached to a notice of a meeting relating to, and presented to members at, a meeting held within the prescribed period before the receipt of the proposal and did not receive the prescribed minimum amount of support at the meeting; or

  • (e) the rights conferred by subsections (1) and (2) are being abused to secure publicity.

• Marginal note:Electronic voting

  (3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the association makes one available.

• Marginal note:Voting while participating electronically

  (4) Unless the by-laws provide otherwise, any person who is participating in a meeting of members or shareholders under subsection 143(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the association has made available for that purpose.

• Marginal note:Voting by mail

  (5) The by-laws of an association may, subject to the regulations and any conditions set out in the by-laws, allow members to vote by mail.

• Marginal note:Regulations

  (6) The Governor in Council may make regulations

  • (a) respecting the manner of and conditions for voting at a meeting of members or shareholders by means of a telephonic, electronic or other communication facility;

  • (b) respecting voting by mail; and

  • (c) requiring the approval by the Superintendent of a by-law made under subsection (5).

• Marginal note:Evidence

  (3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (a) a record date has been fixed under paragraph 145(1)(b) and notice of it has been given under subsection 145(3);

Marginal note:Court may order meeting to be called

• 163. (1) A court may, on the application of a director, a person who is entitled to vote at a meeting or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if

  • (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;

  • (b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or

  • (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.

• Marginal note:Exception

  (2) The management of an association is not required to send a form of proxy under subsection (1) if the association

  • (a) is not a distributing association; and

  • (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.

• Marginal note:Exceptions

  (1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if

  • (a) the total number of shareholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or

  • (b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.

• Marginal note:Vote by show of hands

  (3) Despite subsections (1) and (2) and unless a shareholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders in person or by proxy,

Marginal note:Duty of intermediary

• 166.07 (1) Shares of an association that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner

  • (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and

  • (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.

• Marginal note:When documents to be sent

  (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).

• Marginal note:Restriction on voting

  (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

• Marginal note:Copies

  (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).

• Marginal note:Instructions to intermediary

  (5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.

• Marginal note:Beneficial owner as proxyholder

  (6) If a beneficial owner so requests and provides an intermediary with the appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

• Marginal note:Effect of intermediary’s failure to comply

  (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or any action taken at the meeting.

• Marginal note:Intermediary may not vote

  (8) Nothing in this Part gives an intermediary the right to vote shares that they are otherwise prohibited from voting.

Marginal note:Exemption

166.071 The Governor in Council may make regulations respecting the conditions under which an association is exempt from any of the requirements of sections 166.02 to 166.07.

Marginal note:Election or appointment as director

172.1 The election or appointment of a person as a director is subject to the following:

• (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

• (b) the person was not present at the meeting when the election or appointment took place but

  • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

  • (ii) acted as a director after the election or appointment.

• (a) the remaining directors appointed or elected by those persons may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors who are to be appointed or elected by that class or from a failure to appoint or elect the number or minimum number of directors who are to be appointed or elected by that class;

• Marginal note:Director continues to be present

  (3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 207(1), present at any particular time during the meeting is considered to be present for the purposes of this section.

• Marginal note:Evidence

  (5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (c) fill a vacancy among the directors, on a committee of directors or in the office of auditor, or appoint additional directors;

• (d) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 71, except in accordance with any authorization made by the directors;

Marginal note:Disclosure of interest

• 206. (1) A director or officer of an association shall disclose to the association, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the association, whether entered into or proposed, if they

  • (a) are a party to the contract or transaction;

  • (b) are a director or officer of a party, other than a member, to the contract or transaction or a person acting in a similar capacity; or

  • (c) have a material interest in a party to the contract or transaction.

• Marginal note:Time of disclosure — director

  (2) The disclosure shall be made in the case of a director

  • (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;

  • (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;

  • (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or

  • (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.

• Marginal note:Time of disclosure — officer

  (3) The disclosure shall be made in the case of an officer who is not a director

  • (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;

  • (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or

  • (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.

• Marginal note:Time of disclosure — contract not requiring approval

  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the association’s business would not require approval by the directors or shareholders, the director or officer shall disclose to the association, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.

Marginal note:Director to abstain

• 207. (1) A director who is required to make a disclosure under subsection 206(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction

  • (a) relates primarily to their remuneration as a director, officer, employee or agent of the association, an entity controlled by the association or an entity in which the association has a substantial investment;

  • (b) is for indemnity under section 216 or insurance under section 217; or

  • (c) is with an affiliate of the association.

Marginal note:General notice

• 208. (1) For the purposes of subsection 206(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

  • (a) the director or officer is a director or officer of a party referred to in paragraph 206(1)(b) or (c) or a person acting in a similar capacity;

  • (b) the director or officer has a material interest in the party; or

  • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

• Marginal note:Access to disclosures

  (2) The members or shareholders of the association may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 206(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the association.

Marginal note:Avoidance standards

• 209. (1) A contract or transaction for which disclosure is required under subsection 206(1) is not invalid and a director or officer is not accountable to the association or its members or shareholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

  • (a) the director or officer disclosed their interest in accordance with section 206 and subsection 208(1);

  • (b) the directors approved the contract or transaction; and

  • (c) the contract or transaction was reasonable and fair to the association at the time that it was approved.

• Marginal note:Confirmation by members

  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the association or its members or shareholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

  • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of members;

  • (b) disclosure of the interest was made to the members in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

  • (c) the contract or transaction was reasonable and fair to the association at the time that it was approved or confirmed.

Marginal note:Court may set aside or require accounting

210. If a director or officer of an association fails to comply with any of sections 206 to 209, a court, on application of the association or any of its members or shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the association for any profit or gain realized on it.

Marginal note:Director liability

• 211. (1) Directors of an association who vote for or consent to a resolution of the directors authorizing the issue of a membership share or a share contrary to subsection 74(1) or the issue of subordinated indebtedness contrary to section 87 for a consideration other than money are jointly and severally, or solidarily, liable to the association to make good any amount by which the consideration received is less than the fair equivalent of the money that the association would have received if the membership share or share or subordinated indebtedness had been issued for money on the date of the resolution.

• Marginal note:Further liability

  (2) Directors of an association who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the association any amounts so distributed or paid and not otherwise recovered by the association and any amounts in relation to any loss suffered by the association:

  • (a) a redemption or purchase of membership shares or shares contrary to section 79;

  • (b) a reduction of capital contrary to section 82;

  • (c) a payment of a dividend contrary to section 86;

  • (d) a payment of an indemnity contrary to section 216; or

  • (e) any transaction contrary to Part XII.

Marginal note:Directors liable for wages

• 214. (1) Subject to subsections (2) and (3), the directors of an association are jointly and severally, or solidarily, liable to each employee of the association for all debts not exceeding six months wages payable to the employee for services performed for the association while they are directors.

Marginal note:Defence — due diligence

• 215. (1) A director, officer or employee of an association is not liable under section 211 or 214 or subsection 430(1) and has fulfilled their duty under subsection 168(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the association that were represented to them by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

• Marginal note:Defence — good faith

  (2) A director or officer of an association has fulfilled their duty under subsection 168(1) if they relied in good faith on

  • (a) financial statements of the association that were represented to them by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Indemnification

• 216. (1) An association may indemnify a director or officer of the association, a former director or officer of the association or another person who acts or acted, at the association’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the association or other entity.

• Marginal note:Advances

  (2) An association may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

• Marginal note:No indemnification

  (3) An association may not indemnify a person under subsection (1) unless

  • (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the association or the other entity for which they acted at the association’s request as a director or officer or in a similar capacity; and

  • (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

• Marginal note:Indemnification — derivative actions

  (4) An association may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the association or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the association or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

• Marginal note:Right to indemnity

  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the association in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of their association referred to in subsection (1) with the association or other entity described in that subsection if the person

  • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

  • (b) fulfils the conditions set out in subsection (3).

• Marginal note:Heirs and personal representatives

  (6) An association may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the association may indemnify under those subsections.

• (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the association’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

• (j) change the province in which the head office of the association is situated.

• (a) the name of the amalgamated association and the province in which its head office is to be situated;

Marginal note:Head office

• 234. (1) An association shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

• Marginal note:Change of head office

  (2) The directors of an association may change the address of the head office within the province specified in the incorporating instrument or by-laws.

• Marginal note:Access to association records

  (4) Members, shareholders and creditors of an association and their personal representatives may examine the records referred to in subsection 235(1) during the usual business hours of the association and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the association is a distributing association, any other person may on payment of a reasonable fee examine those records during the usual business hours of the association and take extracts from them or have copies of them made.

• Marginal note:Entitlement to list

  (3) A member, shareholder or creditor of an association or their personal representative — or if the association is a distributing association, any person — is entitled to a basic list of members or shareholders of the association.

Marginal note:Location and processing of information or data

• 242. (1) Subject to subsection (3), an association shall maintain and process in Canada any information or data relating to the preparation or maintenance of the records referred to in section 235 or of its central securities register unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the association from the application of this section.

• Marginal note:Copies

  (2) Subject to subsections (3) and (4), the association may maintain copies of the records referred to in section 235 or of its central securities register outside Canada and may process outside Canada any information or data relating to those copies.

• Marginal note:Access to central securities register

  (3) Members, shareholders and creditors of an association and their personal representatives may examine the central securities register during the usual business hours of the association and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the association is a distributing association, any other person may on payment of a reasonable fee examine the central securities register during the usual business hours of the association and take extracts from it or have copies of it made.

• Marginal note:Electronic access

  (4) The association may make the information contained in the central securities register available by any mechanical or electronic data processing system or other information storage device that is capable of reproducing it in intelligible written form within a reasonable time.

• Marginal note:Affidavit and undertaking

  (5) A person who wishes to examine the central securities register, take extracts from it or have copies of it made shall provide the association with an affidavit containing their name and address — or if they are an entity, the name and address for service of the entity — and with an undertaking that the information contained in the register will not be used except in the same way as a list of members or shareholders may be used under section 239. In the case of an entity, the affidavit is to be sworn by a director or officer of the entity or a person acting in a similar capacity.

• Marginal note:Supplementary information

  (6) A person who wishes to examine a central securities register, take extracts from it or have copies of it made may on payment of a reasonable fee, if they state in the accompanying affidavit that supplementary information is required, request the association or its agent to provide supplementary information setting out any changes made to the register.

• Marginal note:When supplementary information to be provided

  (7) An association or its agent shall provide the supplementary information within

  • (a) 10 days after the day on which the central securities register is examined if the changes take place before that day; and

  • (b) 10 days after the day to which the supplementary information relates if the changes take place on or after the day on which the central securities register is examined.

Marginal note:Corporate seal

• 251. (1) An association may adopt a corporate seal and change one that it adopted.

• Marginal note:Validity of unsealed documents

  (2) A document executed on behalf of an association is not invalid merely because a corporate seal is not affixed to it.

Marginal note:Insider report

261. An insider shall submit an insider report in accordance with the regulations.

Marginal note:Exemption by Superintendent

262. On application by an insider, the Superintendent may in writing and on any terms that the Superintendent thinks fit exempt the insider from any of the requirements of section 261. The exemption may be given retroactive effect and the Superintendent shall publish the partic­ulars of the exemption and the reasons for it in a periodical available to the public.

Marginal note:Regulations

263. The Governor in Council may make regulations for carrying out the purposes of sections 261 and 262, including

• (a) defining “insider” for the purposes of sections 261 and 262;

• (b) respecting the form and content of an insider report; and

• (c) respecting the submission or publication of an insider report.

Meaning of “insider”

• 265. (1) In this section, “insider” means with respect to a distributing association

  • (a) a director or officer of the association;

  • (b) a director or officer of a subsidiary of the association;

  • (c) a director or officer of a body corporate that enters into a business combination with the association; or

  • (d) a person employed or retained by the association.

• Marginal note:Prohibition — short sale

  (2) No insider may knowingly sell, directly or indirectly, a security of a distributing association or of any of the distributing association’s affiliates if the insider does not own or has not fully paid for the security.

• Marginal note:Exception

  (3) Despite subsection (2), an insider may sell a security that they do not own if they own another security that is convertible into the security that was sold or they own an option or right to acquire the security that was sold, and if within 10 days after the sale they

  • (a) exercise the conversion privilege, option or right and deliver the security so acquired to the purchaser; or

  • (b) transfer the convertible security, option or right to the purchaser.

• Marginal note:Prohibition — calls and puts

  (4) No insider may knowingly, directly or indirectly, buy or sell a call or put in respect of a security of an association or of any of the association’s affiliates.

Civil remedies

Extended meaning of “insider”

• 266. (1) In this section and sections 266.1 and 267, “insider” with respect to an association means

  • (a) the association;

  • (b) an affiliate of the association;

  • (c) a director or officer of the association or of any person described in paragraph (b), (f) or (h);

  • (d) a member who holds more than one per cent of the membership shares of the association;

  • (e) a central cooperative credit society that is a member of the association and any other member of the association designated by the Superintendent;

  • (f) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the association carrying more than the prescribed percentage of the voting rights attached to all of the association’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;

  • (g) a person, other than a person described in paragraph (h), who is employed or retained by the association or by a person described in paragraph (h);

  • (h) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the association;

  • (i) a person who received material confidential information concerning the association while they were a person described in any of paragraphs (a) to (h);

  • (j) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or

  • (k) a prescribed person.

• Extended meaning of “security”

  (2) For the purposes of this section, each of the following is deemed to be a security of an association:

  • (a) a put, call, option or other right or obligation to purchase or sell a security of the association; and

  • (b) a security of another entity, the market price of which varies materially with the market price of the securities of the association.

• Marginal note:Deemed insider — take-over bid or business combination

  (3) For the purposes of this section and subsection 266.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of an association or to enter into a business combination with an association is an insider of the association with respect to material confidential information obtained from the association.

• Marginal note:Deemed insider — affiliate or associate

  (4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the association referred to in that subsection. Paragraphs (1)(b) to (k) apply in making this determination except that references to “association” are to be read as references to “person described in subsection (3)”.

• Meaning of “associate”

  (5) In subsection (4), “associate” means with respect to a person

  • (a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;

  • (b) a partner of the person acting on behalf of the partnership of which they are partners;

  • (c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;

  • (d) a spouse or common-law partner of the person;

  • (e) a child of the person or of their spouse or common-law partner; or

  • (f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.

• Marginal note:Insider trading — compensation to sellers and purchasers

  (6) An insider of an association who purchases or sells a security of the association with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the association is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that

  • (a) the insider reasonably believed that the information had been generally disclosed;

  • (b) the information was known or ought reasonably to have been known by the seller or purchaser; or

  • (c) the purchase or sale of the security took place in the prescribed circumstances.

• Marginal note:Insider trading — compensation to association

  (7) The insider is accountable to the association for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).

Marginal note:Tipping — compensation to sellers and purchasers

• 266.1 (1) An insider of an association who discloses confidential information with respect to the association that has not been generally disclosed and that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the association is liable to compensate any person who subsequently sells securities of the association to or purchases them from any person who received the information unless the insider establishes that

  • (a) the insider reasonably believed that the information had been generally disclosed;

  • (b) the information was known or ought reasonably to have been known by the person who alleges that they suffered the loss;

  • (c) if the insider is not a person described in subsection 266(3) or (4), the disclosure of the information was necessary in the course of their business; or

  • (d) if the insider is a person described in subsection 266(3) or (4), the disclosure of the information was necessary to effect the take-over bid or business combination.

• Marginal note:Tipping — compensation to association

  (2) The insider is accountable to the association for any benefit or advantage received or receivable by them as a result of a disclosure of information as described in subsection (1) unless they establish the circumstances described in paragraph (1)(a), (c) or (d).

Marginal note:Measure of damages

• 267. (1) The court may assess damages under subsection 266(6) or 266.1(1) in accord­ance with any measure of damages that it considers relevant in the circumstances. However, in assessing damages in respect of a security of a distributing association, the court shall consider the following:

  • (a) if the plaintiff is a purchaser, the price that they paid for the security less the average market price of the security over the 20 trading days immediately following general disclosure of the information; and

  • (b) if the plaintiff is a seller, the average market price of the security over the 20 trading days immediately following general disclosure of the information, less the price that they received for the security.

• Marginal note:Liability — more than one insider

  (2) If more than one insider is liable under subsection 266(6) or 266.1(1) with respect to the same transaction or series of transactions, their liability is joint and several, or solidary.

• Marginal note:Limitation

  (3) An action to enforce a right created by subsection 266(6) or (7) or section 266.1 may be commenced only within two years after discovery of the facts that gave rise to the cause of action.

Prospectus

Marginal note:Distribution

• 268. (1) No person including an association shall distribute securities of an association except in accordance with the regulations made under subsection (2).

• Marginal note:Regulations

  (2) The Governor in Council may make regulations respecting the distribution of securities of an association, including

  • (a) respecting the information that is to be disclosed by an association before the distribution of any of its securities, including the information that is to be included in a prospectus;

  • (b) respecting the manner of disclosure and the form of the information that is to be disclosed; and

  • (c) exempting any class of distribution of securities from the application of subsection (1).

Marginal note:Order of exemption

• 269. (1) On application by an association or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 268(2) if the Superintendent is satisfied that the association has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.

• Marginal note:Conditions

  (2) An order under subsection (1) may contain any conditions or limitations that the Superintendent deems appropriate.

• Marginal note:Annual statement — contents

  (2) With respect to each of the financial years to which it relates, the annual statement of an association must contain the prescribed statements and any information that is in the opinion of the directors necessary to present fairly, in accordance with the accounting principles referred to in subsection (4), the financial position of the association as at the end of the financial year to which it relates and the results of the operations and changes in the financial position of the association for that financial year.

Marginal note:Annual statement — approval

• 293. (1) The directors of an association shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of

Marginal note:Annual statement — distribution

• 295. (1) An association shall, no later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 161(1)(b) in lieu of the annual meeting, send to each member and shareholder a copy of the documents referred to in subsections 292(1) and (3) unless that time period is waived by the member or shareholder.

• Marginal note:Other statements

  (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the association shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

• Marginal note:Statements to be sent

  (2) The association shall send a copy of the statements referred to in subsections (1) and (1.1) without delay to every member and to the Superintendent.

• (d) the auditor shall, at the time of transmitting the report under paragraph (a), provide the audit committee of the association and the Superintendent with a copy.

• (a) the complainant has, not less than 14 days before bringing the application or as otherwise ordered by the court, given notice to the directors of the association or the association’s subsidiary of the complainant’s intention to apply to the court under subsection (1) if the directors of the association or the association’s subsidiary do not bring, diligently prosecute or defend or discontinue the action;

Marginal note:Absence de cautionnement

• 321. (1) Les plaignants ne sont pas tenus de fournir de cautionnement pour les frais.

• b) nommer un liquidateur en exigeant ou non un cautionnement, fixer sa rémunération et le remplacer;

Marginal note:Due diligence

338. A liquidator is not liable if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

• (a) financial statements of the association represented to the liquidator by an officer of the association or in a written report of the auditor of the association fairly to reflect the financial condition of the association; or

• (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Execution of documents

452.6 Any by-law, notice, resolution, requisition, statement or other document required or permitted to be executed or signed by more than one person for the purposes of this Act may be executed or signed in several documents of like form, each of which is executed or signed by one or more of the persons. The documents if duly executed or signed by all persons required or permitted to sign them are deemed to constitute one document for the purposes of this Act.

• Marginal note:Undelivered notices

  (2) If an association sends a notice or document to a member or shareholder in accordance with section 453 and it is returned on two consecutive occasions because the member or shareholder cannot be found, the association is not required to send any further notices or documents to them until it is informed in writing of their new address.

Marginal note:Mentions au registre des valeurs mobilières

• 458. (1) Les mentions au registre des valeurs mobilières et sur les certificats de valeurs mobilières émis par l’association établissent que les personnes au nom desquelles les valeurs mobilières sont inscrites sont propriétaires des valeurs mentionnées dans le registre ou sur les certificats.

• Marginal note:Incorporation by reference

  (2) The regulations may incorporate any material by reference regardless of its source and either as it exists on a particular date or as amended from time to time.

• Marginal note:Incorporated material is not a regulation

  (3) Material does not become a regulation for the purposes of the Statutory Instruments Act because it is incorporated by reference.

Marginal note:Appeal of final order

• 470. (1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.

• Marginal note:Appeal with leave

  (2) An appeal lies to the court of appeal of a province from any order, other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.

• (d) Parts IX to XV, other than subsection 375(3), section 375.1 and paragraph 442(1.1)(g), XVII and XVII.1,

PART XVII.1DOCUMENTS IN ELECTRONIC OR OTHER FORM

Marginal note:Definitions

487.01 The following definitions apply in this Part.

“electronic document”

« document électronique »

“electronic document” means, except in section 487.1, any form of representation of information or concepts that is fixed in any medium in or by electronic, optical or other similar means and that can be read or perceived by a person or by any means.

“information system”

« système de traitement de l’information »

“information system” means a system used to generate, send, receive, store or otherwise process an electronic document.

Marginal note:Application

487.02 This Part other than sections 487.13 and 487.14 does not apply in respect of any notice, document or other information that under this Act or the regulations is sent to or issued by the Minister, the Superintendent, the Commissioner or the Bank of Canada or any prescribed notice, document or information.

Marginal note:Use not mandatory

487.03 Nothing in this Act or the regulations requires a person to create or provide an electronic document.

Marginal note:Consent and other requirements

• 487.04 (1) Despite anything in this Part, a requirement under this Act or the regulations to provide a notice, document or other information is not satisfied by providing an electronic document unless

  • (a) the addressee consents and designates an information system for the receipt of the electronic document;

  • (b) the electronic document is, unless otherwise prescribed, provided to the designated information system; and

  • (c) the prescribed requirements are complied with.

• Marginal note:Regulations — revocation of consent

  (2) The Governor in Council may make regulations respecting the revocation of the consent referred to in paragraph (1)(a).

Marginal note:Creation or provision of information

487.05 A requirement under this Act or the regulations to create or provide a notice, document or other information is satisfied by creating or providing an electronic document if

• (a) the incorporating instrument or by-laws of the association do not provide otherwise; and

• (b) the prescribed requirements are complied with.

Marginal note:Creation of information in writing

487.06 A requirement under this Act or the regulations to create a notice, document or other information in writing is satisfied by creating an electronic document if in addition to the conditions set out in section 487.05

• (a) the information in the electronic document is accessible so as to be usable for subsequent reference; and

• (b) the prescribed requirements are complied with.

Marginal note:Provision of information in writing

487.07 A requirement under this Act or the regulations to provide a notice, document or other information in writing is satisfied by providing an electronic document if in addition to the conditions set out in section 487.05

• (a) the information in the electronic document is accessible by the addressee and capable of being retained by them so as to be usable for subsequent reference; and

• (b) the prescribed requirements are complied with.

Marginal note:Multiple copies

487.08 A requirement under this Act or the regulations to provide two or more copies of a document at the same time to one addressee is satisfied by providing one copy of the electronic document.

Marginal note:Registered mail

487.09 A requirement under this Act or the regulations to provide a document by registered mail is not satisfied by providing an electronic document except in the prescribed circumstances.

Marginal note:Statutory declarations and affidavits

• 487.1 (1) A statutory declaration or affidavit required under this Act or the regulations may be created or provided in an electronic document if

  • (a) the person who makes the statutory declaration or affidavit signs it with their secure electronic signature;

  • (b) the authorized person before whom the statutory declaration or affidavit is made signs it with their secure electronic signature; and

  • (c) the requirements of sections 487.03 to 487.09 are complied with.

• Marginal note:Definitions

  (2) For the purposes of this section, “electron­ic document” and “secure electronic signature” have the same meaning as in subsection 31(1) of the Personal Information Protection and Electronic Documents Act.

• Marginal note:References to “electronic document”

  (3) For the purpose of complying with paragraph (1)(c), references to “electronic document” in sections 487.03 to 487.09 are to be read as references to “electronic document within the meaning of subsection 31(1) of the Personal Information Protection and Electronic Documents Act”.

Marginal note:Signatures

487.11 A requirement under this Act or the regulations for a signature or for a document to be executed, except in respect of a statutory declaration or affidavit, is satisfied in respect of an electronic document if the prescribed requirements are complied with and the signature results from the application by the person of a technology or process that permits the following to be proved:

• (a) the signature resulting from the use by the person of the technology or process is unique to the person;

• (b) the technology or process is used by the person to incorporate their signature into, attach it to or associate it with the electronic document; and

• (c) the technology or process can be used to identify the person using the technology or process.

Marginal note:Regulations — provision and receipt of documents

487.12 The Governor in Council may make regulations respecting the time and place at which and the circumstances under which an electronic document is considered to be provided or received.

Marginal note:Content and form of notices and documents

487.13 The Minister, Superintendent, Commissioner or Bank of Canada may establish the requirements for the content and fix the form, including electronic and other forms, of notices and documents sent to or issued by each of them under this Act or the regulations, including

• (a) the notices and documents that may be sent in electronic or other form;

• (b) the persons or classes of persons who may send notices and documents;

• (c) their signature in electronic or other form or their execution, adoption or authorization in a manner that is to have the same effect for the purposes of this Act as their signature;

• (d) the time and place at which and the circumstances under which electronic documents are considered to be sent or received; and

• (e) any matter necessary for the purposes of the application of this section.

Marginal note:Exemption

487.14 In the prescribed circumstances, the Minister, the Superintendent, the Commissioner or the Bank of Canada may, on any conditions that they consider appropriate, exempt from the application of any provision of this Act requiring a notice or document to be sent to them any notice or document, or class of notice or document, containing information similar to that contained in a notice or document required to be made public under any other Act of Parliament or any Act of the legislature of a province.

Marginal note:Regulations — distributing company or insurance holding company

• 2.1 (1) The Governor in Council may make regulations respecting the determination of what constitutes a distributing company or distributing insurance holding company for the purposes of this Act.

• Marginal note:Exemption — company or insurance holding company

  (2) On the application of a company or insurance holding company, the Superintendent may determine that it is not or was not a distributing company or distributing insurance holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that company or insurance holding company.

• Marginal note:Exemption — class of companies or insurance holding companies

  (3) The Superintendent may determine that members of a class of companies or insurance holding companies are not or were not distributing companies or distributing insurance holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class.

• Marginal note:Application of certain provisions

  (2) This Part, Parts II to IV, sections 224, 225, 245 to 258 and 489 and Parts X, XII, XV, XVI and XVIII to XX apply to every body corporate that is not discontinued under this Act and

  • (a) that is incorporated or continued as a society under this Act; or

  • (b) to which any of the provisions of Parts I and II, Part III, except section 77, Part IV, except sections 123 to 130 and 153 to 158, and Parts V and VII of the Canadian and British Insurance Companies Act applied before June 1, 1992.

Marginal note:Authority of directors and officers

• 20. (1) No company or society and no guarantor of an obligation of a company or society may assert against a person dealing with the company or society or against a person who has acquired rights from the company or society that

  • (a) the company’s or society’s incorporating instrument or any by-laws of the company or society have not been complied with;

  • (b) the persons named as directors of the company or society in the most recent return sent to the Superintendent under section 549 or 668 are not the directors of the company or society;

  • (c) the place named in the incorporating instrument or by-laws of the company or society is not the place where the head office of the company or society is situated;

  • (d) a person held out by the company or society as a director, officer or representative of the company or society has not been duly appointed or has no authority to exercise the powers and perform the duties that are customary in the business of the company or society or usual for a director, officer or representative; or

  • (e) a document issued by any director, officer or representative of the company or society with actual or usual authority to issue the document is not valid or not genuine.

• Marginal note:Exception — knowledge

  (2) Subsection (1) does not apply in respect of a person who has or ought to have knowledge of a situation described in that subsection by virtue of their relationship to the company or society.

• (b) the province in which the head office of the company or society is to be situated;

• Marginal note:Exception

  (2.1) Despite subsection (2), a company may, subject to subsection (2.2), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act,

    • (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the company at arm’s length within the meaning of that expression in the Income Tax Act, or

    • (iii) property of a person who immediately before the exchange dealt with the company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the company and all of the holders of shares in the class or series of shares so issued consent to the exchange;

  • (b) under an agreement referred to in subsection 246(1); or

  • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated company.

Marginal note:Exception — représentant personnel

• 76. (1) La société — ainsi que ses filiales si elle le leur permet — peut, en qualité de représentant personnel, mais à condition de ne pas en avoir la propriété effective, détenir soit des actions de la société ou d’une personne morale qui la contrôle, soit des titres de participation d’une entité non constituée en personne morale qui la contrôle.

Marginal note:Exception — conditions before acquisition

• 76.01 (1) A company may permit its subsidiary to acquire shares of the company, shares of an entity that controls the company or any ownership interests of any unincorporated entity that controls the company if before the subsidiary acquires them the conditions prescribed for the purposes of this subsection are met.

• Marginal note:Conditions after acquisition

  (2) After a subsidiary has acquired shares or ownership interests in accordance with subsection (1), the conditions prescribed for the purposes of this subsection are to be met.

• Marginal note:Non-compliance with conditions

  (3) Despite section 16 and subsection 70(2), the issue and acquisition of the shares or ownership interests are subject to the prescribed requirements if

  • (a) the company permits the subsidiary to acquire the shares or ownership interests; and

  • (b) either

    • (i) a condition prescribed for the purposes of subsection (1) was not met, or

    • (ii) a condition prescribed for the purposes of subsection (2) was not met or ceased to be met.

Marginal note:Signatures

• 90. (1) A security certificate shall be signed by or bear the printed or otherwise mechanically reproduced signature of at least one of the following:

  • (a) a director or officer of the company;

  • (b) a registrar or transfer agent of the company or a branch transfer agent or a natural person on their behalf; or

  • (c) a trustee who certifies it in accordance with a trust indenture.

• Marginal note:Continuation of validity of signature

  (2) If a security certificate contains a person’s printed or mechanically reproduced signature, the company may issue the security certificate even if the person has ceased to be a director or officer of the company. The security certificate is as valid as if the person were a director or officer at the date of its issue.

Marginal note:Restrictions and charges

• 92. (1) No charge in favour of a company and no restriction on transfer, other than a constraint under Part VII other than section 427, is effective against a transferee of a security issued by the company if the transferee has no actual knowledge of the charge or restriction unless it or a reference to it is noted conspicuously on the security certificate.

• Marginal note:No restriction

  (2) If any of the issued shares of a distributing company remain outstanding and are held by more than one person, the company may not restrict the transfer or ownership of its shares except by way of a constraint under Part VII.

• Marginal note:Continuance

  (3) If a body corporate that is continued as a company under this Act has outstanding security certificates and the words “private company” or “private corporation” appear on the certificates, those words are deemed to be a notice of a charge or restriction for the purposes of subsection (1).

• (b) the personal representative of a registered security holder who is a minor, an incompetent person or a missing person; or

Marginal note:Minors

98. If a minor exercises any rights of ownership in the securities of a company, no subsequent repudiation or avoidance is effective against the company.

• Marginal note:Participation by electronic means

  (2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders or policyholders may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the company makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the manner of and conditions for participating in a meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting.

• Marginal note:Order to delay calling annual meeting

  (2) Despite subsection (1), the company may apply to the court for an order extending the time for calling an annual meeting.

• Marginal note:Obligation to notify Superintendent

  (3) The company shall give notice of the application to the Superintendent before any hearing concerning the application and shall provide the Superintendent with a copy of any order that is issued.

• Marginal note:Superintendent’s right to appear

  (4) The Superintendent is entitled to appear and be heard in person or by counsel at any hearing concerning the application.

Marginal note:Authority to fix record date

• 142. (1) The directors may in advance fix a record date, that is within the prescribed period, for the determination of

  • (a) shareholders who are entitled to receive payment of a dividend;

  • (b) shareholders or policyholders who are entitled to participate in a liquidation distribution;

  • (c) shareholders

    • (i) who are entitled to receive notice of a meeting of shareholders or a meeting of shareholders and policyholders,

    • (ii) who are entitled to vote at a meeting of shareholders or at a meeting of shareholders and policyholders, or

    • (iii) for any other purpose;

  • (d) policyholders who are entitled to

    • (i) receive notice of a meeting of policyholders or a meeting of shareholders and policyholders, or

    • (ii) vote at a meeting of policyholders or at a meeting of shareholders and policyholders; or

  • (e) policyholders for any other purpose except

    • (i) the right to receive payment of a policy dividend or bonus,

    • (ii) any purpose where the determination of policyholders is governed by contract, and

    • (iii) the right to receive benefits in respect of the conversion of a mutual company into a company with common shares.

• Marginal note:Determination of record date — shareholders

  (2) If no record date is fixed,

  • (a) the record date for the determination of shareholders who are entitled to receive notice of a meeting of shareholders or a meeting of shareholders and policyholders is

    • (i) at the close of business on the day immediately preceding the day on which the notice is given, or

    • (ii) if no notice is given, the day on which the meeting is held; and

  • (b) the record date for the determination of shareholders for any other purpose, other than to establish a shareholder’s right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

• Marginal note:Determination of record date — policyholders

  (3) If no record date is fixed,

  • (a) the record date for the determination of policyholders who are entitled to receive notice of a meeting of policyholders or a meeting of shareholders and policyholders is

    • (i) at the close of business on the day immediately preceding the day on which the notice is given, or

    • (ii) if no notice is given, the day on which the meeting is held;

  • (b) the record date for the determination of policyholders entitled to vote at a meeting is the day on which the meeting is held; and

  • (c) the record date for the determination of policyholders for any other purpose is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

• Marginal note:Notice of record date — shareholders

  (4) If a record date is fixed and unless notice of the record date is waived in writing by every holder of a share of the class or series affected whose name is set out in the securities register at the close of business on the day on which the directors fix the record date, notice of the record date shall be given within the prescribed period by

  • (a) advertisement in a newspaper in general circulation in the place where the company’s head office is situated and in each place in Canada where the company has a transfer agent or where a transfer of its shares may be recorded; and

  • (b) written notice to each stock exchange in Canada on which the company’s shares are listed for trading.

• Marginal note:Electronic voting

  (3) Despite subsection (1) and unless the by-laws provide otherwise, any vote referred to in that subsection may be held entirely by means of a telephonic, electronic or other communication facility if the company makes one available.

• Marginal note:Voting while participating electronically

  (4) Unless the by-laws provide otherwise, any person who is participating in a meeting of shareholders or policyholders under subsection 140(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the company has made available for that purpose.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations respecting the manner of and conditions for voting at a meeting of shareholders or policyholders by means of a telephonic, electronic or other communication facility.

• Marginal note:Evidence

  (3) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (a) a record date has been fixed under subparagraph 142(1)(c)(i) or (d)(i) and notice of it has been given under subsection 142(4);

Marginal note:Court may order meeting to be called

• 160. (1) A court may, on the application of a director, a shareholder or policyholder who is entitled to vote or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if

  • (a) it is impracticable to call the meeting within the time or in the manner in which it is to be called;

  • (b) it is impracticable to conduct the meeting in the manner required by this Act or the by-laws; or

  • (c) the court thinks that the meeting ought to be called, held or conducted within the time or in the manner that it directs for any other reason.

• Marginal note:Exception

  (2) The management of a company is not required to send a form of proxy to shareholders under subsection (1) if the company

  • (a) is not a distributing company; and

  • (b) has 50 or fewer shareholders who are entitled to vote at a meeting, two or more joint holders of a share being counted as one shareholder.

• Marginal note:Exceptions

  (1.1) Despite paragraph (1)(b), it is not necessary to send a dissident’s proxy circular if

  • (a) the total number of shareholders and policyholders whose proxies are solicited is 15 or fewer, two or more joint holders of a share being counted as one shareholder; or

  • (b) the solicitation is conveyed by public broadcast, speech or publication and the prescribed requirements are complied with.

• Marginal note:Vote by show of hands

  (3) Despite subsections (1) and (2) and unless a shareholder, policyholder or proxyholder demands a ballot, if the chairperson of a meeting of shareholders or policyholders declares to the meeting that, if a ballot were conducted, the total number of votes represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting on a matter or group of matters is less than 5% of all the votes that might be cast by shareholders or policyholders, in person or by proxy,

Marginal note:Duty of intermediary

• 164.06 (1) Shares of a company that are registered in the name of an intermediary or an intermediary’s nominee and not beneficially owned by the intermediary may not be voted unless the intermediary sends to the beneficial owner

  • (a) a copy of the notice of the meeting, annual statement, management proxy circular and dissident’s proxy circular and any other documents, other than the form of proxy, that were sent to shareholders by or on behalf of any person for use in connection with the meeting; and

  • (b) a written request for voting instructions except if the intermediary has already received written voting instructions from the beneficial owner.

• Marginal note:When documents to be sent

  (2) The intermediary shall send the documents referred to in subsection (1) without delay after they receive the documents referred to in paragraph (1)(a).

• Marginal note:Restriction on voting

  (3) An intermediary or a proxyholder appointed by them may not vote shares that the intermediary does not beneficially own and that are registered in the name of the intermediary or their nominee unless the intermediary or proxyholder, as the case may be, receives written voting instructions from the beneficial owner.

• Marginal note:Copies

  (4) A person by or on behalf of whom a solicitation is made shall on request and without delay provide the intermediary, at the person’s expense, with the necessary number of copies of the documents referred to in paragraph (1)(a).

• Marginal note:Instructions to intermediary

  (5) The intermediary shall vote or appoint a proxyholder to vote in accordance with any written voting instructions received from the beneficial owner.

• Marginal note:Beneficial owner as proxyholder

  (6) If a beneficial owner so requests and provides an intermediary with appropriate documentation, the intermediary shall appoint the beneficial owner or a nominee of the beneficial owner as proxyholder.

• Marginal note:Effect of intermediary’s failure to comply

  (7) The failure of an intermediary to comply with any of subsections (1) to (6) does not render void any meeting of shareholders or policyholders or any action taken at the meeting.

• Marginal note:Intermediary may not vote

  (8) Nothing in this Division gives an intermediary the right to vote shares that they are otherwise prohibited from voting.

Marginal note:Exemption

164.061 The Governor in Council may make regulations respecting the conditions under which a company is exempt from any of the requirements of sections 164.01 to 164.06.

Marginal note:Election or appointment as director

173.1 The election or appointment of a person as a director is subject to the following conditions:

• (a) the person was present at the meeting when the election or appointment took place and did not refuse to hold office as a director; or

• (b) the person was not present at the meeting when the election or appointment took place but

  • (i) consented in writing to hold office as a director before the election or appointment or within 10 days after it, or

  • (ii) acted as a director after the election or appointment.

• (g) a director elected by cumulative voting may be removed from office only if the number of votes cast in favour of a motion to remove the director is greater than the product of the number of directors required by the by-laws to be elected by cumulative voting and the number of votes cast against the motion; and

• (h) the number of directors required by the by-laws to be elected by cumulative voting may be decreased only if the number of votes cast in favour of a motion to decrease the number of directors is greater than the product of the number of directors required by the by-laws to be elected by cumulative voting and the number of votes cast against the motion.

Marginal note:Directors filling vacancy

• 185. (1) Despite section 192 but subject to subsection (2) and sections 184, 186 and 187, a quorum of directors may fill a vacancy among the directors except a vacancy resulting from a change in the by-laws by which the number or the minimum or maximum number of directors is increased or from a failure to elect the number or minimum number of directors provided for in the by-laws.

• (a) the remaining shareholders’ directors or policyholders’ directors, as the case may be, may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number — or from a failure to elect the number or minimum number — of shareholders’ directors or policyholders’ directors provided for in the by-laws;

• (a) the remaining directors elected by the holders of that class or series of shares may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors for that class or series or from a failure to elect the number or minimum number of directors provided for in the by-laws for that class or series;

• Marginal note:Director continues to be present

  (3) A director who is present at a meeting of directors or of a committee of directors but is not, in accordance with subsection 212(1), present at any particular time during the meeting is considered to be present for the purposes of this section.

• Marginal note:Evidence

  (5) Unless a ballot is demanded, an entry in the minutes of a meeting that the chairperson declared a resolution to be carried or defeated is in the absence of evidence to the contrary proof of that fact without proof of the number or proportion of votes recorded in favour of or against the resolution.

• (b) fill a vacancy among the directors, on a committee of directors or in the office of auditor or actuary, or appoint additional directors;

• (c) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 66, except in accordance with any authorization made by the directors;

Marginal note:Disclosure of interest

• 211. (1) A director or officer of a company shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or a meeting of a committee of directors, the nature and extent of any interest they have in a material contract or material transaction with the company, whether entered into or proposed, if they

  • (a) are a party to the contract or transaction;

  • (b) are a director or officer of a party to the contract or transaction or a person acting in a similar capacity; or

  • (c) have a material interest in a party to the contract or transaction.

• Marginal note:Time of disclosure — director

  (2) The disclosure shall be made in the case of a director

  • (a) at the meeting of directors, or of a committee of directors, at which the proposed contract or transaction is first considered;

  • (b) if at the time of the meeting referred to in paragraph (a) the director was not interested in the proposed contract or transaction, at the first one after they become interested in it;

  • (c) if the director becomes interested after a contract or transaction is entered into, at the first one after they become interested; or

  • (d) if a person who is interested in a contract or transaction becomes a director, at the first one after they become a director.

• Marginal note:Time of disclosure — officer

  (3) The disclosure shall be made in the case of an officer who is not a director

  • (a) immediately after they become aware that the contract, transaction, proposed contract or proposed transaction is to be considered or has been considered at a meeting of directors or of a committee of directors;

  • (b) if they become interested after the contract or transaction is entered into, immediately after they become interested; or

  • (c) if a person who is interested in a contract or transaction becomes an officer, immediately after they become an officer.

• Marginal note:Time of disclosure — contract not requiring approval

  (4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the company’s business would not require approval by the directors, shareholders or policyholders, the director or officer shall disclose to the company, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.

Marginal note:Director to abstain

• 212. (1) A director who is required to make a disclosure under subsection 211(1) shall not be present at any meeting of directors, or of a committee of directors, while the contract or transaction is being considered or vote on any resolution to approve it unless the contract or transaction

  • (a) relates primarily to their remuneration as a director, officer, employee or agent of the company, an entity controlled by the company or an entity in which the company has a substantial investment;

  • (b) is for indemnity under section 221 or insurance under section 222; or

  • (c) is with an affiliate of the company.

Marginal note:General notice

• 213. (1) For the purposes of subsection 211(1), a general notice to the directors declaring that a director or officer is to be regarded as interested for any of the following reasons in a contract or transaction entered into with a party is a sufficient declaration of interest in relation to any contract or transaction with that party:

  • (a) the director or officer is a director or officer of a party referred to in paragraph 211(1)(b) or (c) or a person acting in a similar capacity;

  • (b) the director or officer has a material interest in the party; or

  • (c) there has been a material change in the nature of the director’s or officer’s interest in the party.

• Marginal note:Access to disclosures

  (2) A policyholder who is entitled to vote or a shareholder may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 211(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the company.

Marginal note:Avoidance standards

• 214. (1) A contract or transaction for which disclosure is required under subsection 211(1) is not invalid and a director or officer is not accountable to the company or its shareholders or policyholders for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

  • (a) the director or officer disclosed their interest in accordance with section 211 and subsection 213(1);

  • (b) the directors approved the contract or transaction; and

  • (c) the contract or transaction was reasonable and fair to the company at the time that it was approved.

• Marginal note:Confirmation by shareholders and policyholders

  (2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the company or its shareholders or policyholders for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

  • (a) the contract or transaction is approved or confirmed by special resolution at a meeting of shareholders and policyholders;

  • (b) disclosure of the interest was made to the shareholders and to the policyholders entitled to vote in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

  • (c) the contract or transaction was reasonable and fair to the company at the time that it was approved or confirmed.

Marginal note:Court may set aside or require accounting

215. If a director or officer of a company fails to comply with any of sections 211 to 214, a court, on application of the company or any of its policyholders entitled to vote or its shareholders, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the company for any profit or gain realized on it.

Marginal note:Director liability

• 216. (1) Directors of a company who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 69(1) or the issue of subordinated indebtedness contrary to section 84 for a consideration other than money are jointly and severally, or solidarily, liable to the company to make good any amount by which the consideration received is less than the fair equivalent of the money that the company would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.

• Marginal note:Further liability

  (2) Directors of a company who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the company any amounts so distributed or paid and not otherwise recovered by the company and any amounts in relation to any loss suffered by the company:

  • (a) a redemption or purchase of shares contrary to section 75;

  • (b) a reduction of capital contrary to section 79;

  • (c) a payment of a dividend contrary to section 83;

  • (d) a payment of an indemnity contrary to section 221; or

  • (e) any transaction contrary to Part XI.

Marginal note:Directors liable for wages

• 219. (1) Subject to subsections (2) and (3), the directors of a company are jointly and severally, or solidarily, liable to each employee of the company for all debts not exceeding six months wages payable to the employee for services performed for the company while they are directors.

Marginal note:Defence — due diligence

• 220. (1) A director, officer or employee of a company is not liable under section 216 or 219 or subsection 539(1) and has fulfilled their duty under subsection 166(2) if they exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

• Marginal note:Defence — good faith

  (2) A director or officer of a company has fulfilled their duty under subsection 166(1) if they relied in good faith on

  • (a) financial statements of the company that were represented to them by an officer of the company or in a written report of the auditor of the company fairly to reflect the financial condition of the company; or

  • (b) a report of a person whose profession lends credibility to a statement made by them.

Marginal note:Indemnification

• 221. (1) A company may indemnify a director or officer of the company, a former director or officer of the company or another person who acts or acted, at the company’s request, as a director or officer of or in a similar capacity for another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by them in respect of any civil, criminal, administrative, investigative or other proceeding in which they are involved because of that association with the company or other entity.

• Marginal note:Advances

  (2) A company may advance amounts to the director, officer or other person for the costs, charges and expenses of a proceeding referred to in subsection (1). They shall repay the amounts if they do not fulfil the conditions set out in subsection (3).

• Marginal note:No indemnification

  (3) A company may not indemnify a person under subsection (1) unless

  • (a) the person acted honestly and in good faith with a view to the best interests of, as the case may be, the company or the other entity for which they acted at the company’s request as a director or officer or in a similar capacity; and

  • (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the person had reasonable grounds for believing that their conduct was lawful.

• Marginal note:Indemnification — derivative actions

  (4) A company may with the approval of a court indemnify a person referred to in subsection (1) or advance amounts to them under subsection (2) — in respect of an action by or on behalf of the company or other entity to procure a judgment in its favour to which the person is made a party because of the association referred to in subsection (1) with the company or other entity — against all costs, charges and expenses reasonably incurred by them in connection with that action if they fulfil the conditions set out in subsection (3).

• Marginal note:Right to indemnity

  (5) Despite subsection (1), a person referred to in that subsection is entitled to be indemnified by the company in respect of all costs, charges and expenses reasonably incurred by them in connection with the defence of any civil, criminal, administrative, investigative or other proceeding to which the person is subject because of the association referred to in subsection (1) with the company or other entity described in that subsection if the person

  • (a) was not judged by the court or other competent authority to have committed any fault or omitted to do anything that they ought to have done; and

  • (b) fulfils the conditions set out in subsection (3).

• Marginal note:Heirs and personal representatives

  (6) A company may, to the extent referred to in subsections (1) to (5) in respect of the person, indemnify the heirs or personal representatives of any person whom the company may indemnify under those subsections.

• (b) in the capacity of a director or officer of another entity or while acting in a similar capacity for another entity, if they act or acted in that capacity at the company’s request, except if the liability relates to a failure to act honestly and in good faith with a view to the best interests of the entity.

• (k) change the province in which the head office of the company is situated.

Marginal note:Vertical short-form amalgamation

• 249. (1) A company that does not have any participating policyholders may, without complying with sections 246 to 248, amalgamate with one or more bodies corporate that

Marginal note:Head office

• 260. (1) A company shall at all times have a head office in the province specified in its incorporating instrument or by-laws.

• Marginal note:Change of head office

  (2) The directors of a company may change the address of the head office within the province specified in the incorporating instrument or by-laws.

• Marginal note:Access to company records

  (5) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives may examine the records referred to in subsection 261(1) during the usual business hours of the company and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the company is a distributing company, any other person may on payment of a reasonable fee examine those records during the usual business hours of the company and take extracts from them or have copies of them made.

• Marginal note:Entitlement to list

  (3) A company’s shareholders, policyholders entitled to vote and creditors and their personal representatives are — or if the company is a distributing company, any person is — entitled to a basic list of shareholders of the company.