Bank Act (S.C. 1991, c. 46)

Marginal note:Liability of Bank of Canada

• 367 (1) Subject to section 22 of the Bank of Canada Act, where payment has been made to the Bank of Canada of an amount under subsection 366(3), the Bank of Canada, if payment is demanded by a person who, but for subsection 366(4), would be entitled to receive payment of that amount from the liquidator, the bank or the Minister, is liable to pay to that person at its head office an amount equal to the amount so paid to it, with interest thereon for the period, not exceeding ten years, from the day on which the payment was received by the Bank of Canada until the date of payment to the person, at such rate and computed in such manner as the Minister determines.

• Marginal note:Enforcing liability

  (2) The liability of the Bank of Canada under subsection (1) may be enforced by action against the Bank of Canada in the court in the province in which the debt or instrument was payable.

Marginal note:Custody of records after dissolution

368 A person who has been granted custody of the documents, records and registers of a dissolved bank shall keep them available for production for six years following the date of the dissolution of the bank or until the expiration of such shorter period as may be ordered by the court when it orders the dissolution.

Marginal note:Insolvency

• 369 (1) In the case of the insolvency of a bank,

  • (a) the payment of any amount due to Her Majesty in right of Canada, in trust or otherwise, except indebtedness evidenced by subordinated indebtedness, shall be a first charge on the assets of the bank;

  • (b) the payment of any amount due to Her Majesty in right of a province, in trust or otherwise, except indebtedness evidenced by subordinated indebtedness, shall be a second charge on the assets of the bank;

  • (c) the payment of the deposit liabilities of the bank and all other liabilities of the bank, except the liabilities referred to in paragraphs (d) and (e), shall be a third charge on the assets of the bank;

  • (d) subordinated indebtedness of the bank and all other liabilities that by their terms rank equally with or subordinate to such subordinated indebtedness shall be a fourth charge on the assets of the bank; and

  • (e) the payment of any fines and penalties for which the bank is liable shall be a last charge on the assets of the bank.

• Marginal note:Priority not affected

  (2) Nothing in subsection (1) prejudices or affects the priority of any holder of any security interest in any property of a bank.

• Marginal note:Priorities

  (3) Priorities within each of paragraphs (1)(a) to (e) shall be determined in accordance with the laws governing priorities and, where applicable, by the terms of the indebtedness and liabilities referred to therein.

PART VIIOwnership

DIVISION IDefinitions and Interpretation

Marginal note:Definitions

• 370 (1) In this Part,

  agent

  agent means

  • (a) in relation to Her Majesty in right of Canada or of a province, any agent of Her Majesty in either of those rights and includes a municipal or public body empowered to perform a function of government in Canada or any entity empowered to perform a function or duty on behalf of Her Majesty in either of those rights, but does not include

    • (i) an official or entity performing a function or duty in connection with the administration or management of the estate or property of a natural person,

    • (ii) an official or entity performing a function or duty in connection with the administration, management or investment of a fund established to provide compensation, hospitalization, medical care, annuities, pensions or similar benefits to natural persons, or moneys derived from such a fund, or

    • (iii) the trustee of any trust for the administration of a fund to which Her Majesty in either of those rights contributes and of which an official or entity that is an agent of Her Majesty in either of those rights is a trustee, and

  • (b) in relation to the government of a foreign country or any political subdivision thereof, a person empowered to perform a function or duty on behalf of the government of the foreign country or political subdivision, other than a function or duty in connection with the administration or management of the estate or property of a natural person; (mandataire)

  eligible agent

  eligible agent means an agent or agency of Her Majesty in right of Canada or of a province or an agent or agency of a government of a foreign country or any political subdivision of a foreign country

  • (a) whose mandate is publicly available;

  • (b) that controls the assets of an investment fund in a manner intended to maximize long-term risk-adjusted returns and that fund is

    • (i) one to which, as the case may be, Her Majesty in right of Canada or of a province or the government of a foreign country or political subdivision contributes, or

    • (ii) established to provide compensation, hospitalization, medical care, annuities, pensions or similar benefits to natural persons; and

  • (c) whose decisions with respect to the assets of the fund referred to in paragraph (b) are not influenced in any significant way by, as the case may be, Her Majesty in right of Canada or of the province or the government of the foreign country or the political subdivision; (mandataire admissible)

  eligible Canadian financial institution

  eligible Canadian financial institution means a Canadian financial institution that is a body corporate and that is widely held; (institution financière canadienne admissible)

  eligible financial institution

  eligible financial institution means an eligible Canadian financial institution or an eligible foreign institution; (institution financière admissible)

  eligible foreign institution

  eligible foreign institution means

  • (a) a foreign bank that, in the opinion of the Minister, after consultation with the Superintendent, is regulated as or like a bank, according to the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business, or

  • (b) a foreign institution that, in the opinion of the Minister,

    • (i) is, with respect to its provision of financial services, regulated in the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business, and

    • (ii) is widely held; (institution étrangère admissible)

  foreign institution

  foreign institution means an entity that is

  • (a) engaged in the trust, loan or insurance business, the business of a cooperative credit society or the business of dealing in securities, and

  • (b) incorporated or formed otherwise than by or under an Act of Parliament or the legislature of a province. (institution étrangère)

• (2) to (4) [Repealed, 2001, c. 9, s. 96]

Marginal note:Associates

• 371 (1) For the purpose of determining ownership of a bank, if two persons who each beneficially own shares or membership shares of a bank are associated with each other, those persons are deemed to be a single person who beneficially owns the aggregate number of shares and membership shares of the bank beneficially owned by them.

• Marginal note:Associates

  (2) For the purposes of subsection (1), a person who beneficially owns shares or membership shares of a bank is associated with another person who beneficially owns shares or membership shares of the bank if

  • (a) one person is Her Majesty in right of Canada and the other person is Her Majesty in right of a province or one person is Her Majesty in right of a province and the other person is Her Majesty in right of another province;

  • (b) each person is an agent of Her Majesty in right of Canada or in right of a province;

  • (c) each person is an official, a trustee or an entity referred to in subparagraphs (a)(ii) and (iii) of the definition agent in subsection 370(1);

  • (d) each person is an entity owned or controlled by Her Majesty in right of Canada or in right of a province that is not an agent of Her Majesty and is not empowered to perform a function or duty on behalf of Her Majesty;

  • (e) both persons are trustees of any trusts for the administration of funds to which Her Majesty in right of Canada contributes and of which no official or entity that is an agent of Her Majesty in such right is a trustee;

  • (f) both persons are trustees of any trusts for the administration of funds to which Her Majesty in right of a particular province contributes and of which no official or entity that is an agent of Her Majesty in right of that province is a trustee;

  • (g) one person is a local cooperative credit society and the other person is a central cooperative credit society of which the first person is a member;

  • (h) both persons are local cooperative credit societies that are members of the same central cooperative credit society;

  • (i) one person is a central cooperative credit society, the other person is a federation of cooperative credit societies of which the first is a member, and both persons are incorporated or organized by or pursuant to legislation enacted by the same legislative body;

  • (j) both persons are central cooperative credit societies that are members of the same federation of cooperative credit societies, and both persons and the federation of cooperative credit societies are incorporated or organized by or pursuant to legislation enacted by the same legislative body; or

  • (k) both persons are associated within the meaning of paragraphs (a) to (j) with the same person.

Marginal note:Associates

• 371.1 (1) Despite section 371, for the purpose of determining ownership of a bank by an eligible agent, where two persons, at least one of whom is an eligible agent, are associated with each other, those persons are deemed to be a single eligible agent who beneficially owns the aggregate number of shares of the bank beneficially owned by them.

• Marginal note:Associates

  (2) For the purposes of subsection (1), a person is associated with another person if

  • (a) each person is an agent or agency of Her Majesty in right of Canada;

  • (b) each person is an agent or agency of Her Majesty in right of the same province;

  • (c) each person is an agent or agency of a government of the same foreign country or a political subdivision of the same foreign country;

  • (d) one person is Her Majesty in right of Canada and the other person is an agent or agency of Her Majesty in that right;

  • (e) one person is Her Majesty in right of a province and the other person is an agent or agency of Her Majesty in right of that province; or

  • (f) one person is a government of a foreign country or any political subdivision of a foreign country and the other person is its agent or agency.

DIVISION IIOwnership of Banks

Constraints on Ownership

Marginal note:Significant interest

372 Except as permitted by this Part, no person shall have a significant interest in any class of shares, or in membership shares, of a bank.

372.1 [Repealed, 2001, c. 9, s. 98]

Marginal note:Acquisition of significant interest

• 373 (1) Subject to this Part, no person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share or membership share of a bank or purchase or otherwise acquire control of any entity that holds any share or membership share of a bank if

  • (a) the acquisition would cause the person to have a significant interest in any class of shares or in membership shares of the bank, as the case may be; or

  • (b) where the person has a significant interest in a class of shares or in membership shares of the bank, the acquisition would increase the significant interest of the person in that class or in the membership shares, as the case may be.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares or in membership shares of a bank, the entity is deemed to be acquiring a significant interest in that class of shares or in membership shares, as the case may be, through an acquisition for which the approval of the Minister is required under subsection (1).

373.1 [Repealed, 1999, c. 28, s. 18]

Marginal note:Limitations on share holdings

• 374 (1) No person may be a major shareholder of a bank with equity of twelve billion dollars or more.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who is a major shareholder of a federal credit union.

• Marginal note:Exception — widely held bank

  (2) Subsection (1) does not apply to a widely held bank that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if it controlled, within the meaning of those paragraphs, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank since that day.

• Marginal note:Exception — widely held bank holding company

  (3) Subsection (1) does not apply to a widely held bank holding company that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if

  • (a) the bank holding company controlled, within the meaning of those paragraphs, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank since that day;

  • (b) the bank holding company acquired control, within the meaning of those paragraphs, of the bank under section 677 or 678 and the bank holding company has continued to control, within the meaning of those paragraphs, the bank since the day the bank holding company acquired control; or

  • (c) the bank was a subsidiary of another bank that was continued under section 684 as the bank holding company and the bank holding company has continued to control, within the meaning of those paragraphs, the bank since the day it came into existence as a bank holding company.

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

  (4) Subsection (1) does not apply to any of the following that controls, within the meaning of paragraph 3(1)(d), the bank with equity of twelve billion dollars or more if it controlled, within the meaning of that paragraph, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of that paragraph, the bank since that day:

  • (a) a widely held insurance holding company;

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

  • (c) an eligible foreign institution.

• Marginal note:Exception — other entities

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

• Marginal note:Exception — other entities

  (6) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the bank with equity of twelve billion dollars or more if the entity is controlled, within the meaning of that paragraph, by

  • (a) a widely held insurance holding company to which subsection (4) applies that controls the bank;

  • (b) an eligible Canadian financial institution to which subsection (4) applies, other than a bank, that controls the bank; or

  • (c) an eligible foreign institution to which subsection (4) applies that controls the bank.