Bank Act (S.C. 1991, c. 46)

Marginal note:Exemption — federal credit unions

380.1 On application by a federal credit union, the Superintendent may exempt any class of shares of the federal credit union the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares and membership shares of the federal credit union from the application of sections 373 and 379.

Marginal note:Exception — small holdings

381 Despite section 379, if, as a result of a transfer or issue of shares of a class of shares, or of membership shares, of a bank to a person, other than an eligible agent, the total number of shares of that class registered in the securities register of the bank, or the total number of membership shares registered in the members register of the bank, as the case may be, in the name of that person would not exceed 5,000 and would not exceed 0.1% of the outstanding shares of that class or of the outstanding membership shares, as the case may be, the bank is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares or in membership shares of the bank as a result of that issue or transfer of shares or membership shares.

Marginal note:When approval not required

• 382 (1) Despite sections 373 and 379, the approval of the Minister is not required in respect of a bank with equity of less than twelve billion dollars if a person with a significant interest in a class of shares of the bank, or an entity controlled by a person with a significant interest in a class of shares of the bank, purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the bank to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who has a significant interest in any class of shares of a federal credit union.

• Marginal note:Percentage

  (2) Subject to subsection (3) and for the purpose of subsection (1), the percentage is 5 percentage points in excess of the significant interest of the person in that class of shares of the bank on the later of June 1, 1992 and the day of the most recent purchase or acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank, or of control of an entity that held shares of that class of shares of the bank, for which approval was given by the Minister.

• Marginal note:Percentage

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

  • (a) 5 percentage points in excess of the significant interest of the person in that class of shares of the bank on the later of June 1, 1992 and the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank, or of control of an entity that held shares of that class of shares of the bank, for which approval was given by the Minister, and

  • (b) 10 percentage points in excess of the lowest significant interest of the person in that class of shares of the bank at any time after the later of June 1, 1992 and the day of the most recent purchase or other acquisition by the person or any entity controlled by the person, other than the entity referred to in subsection (1), of shares of that class of shares of the bank, or of control of an entity that held shares of that class of shares of the bank, for which approval was given by the Minister.

• Marginal note:Exception — eligible agent

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

• Marginal note:Exception

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

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

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

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

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

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

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

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

Marginal note:When approval not required — federal credit union

• 382.1 (1) Despite sections 373 and 379, the approval of the Minister is not required in respect of a federal credit union if a person with a significant interest in a class of shares, or in membership shares, of the federal credit union, or an entity controlled by a person with a significant interest in a class of shares, or in membership shares, of the federal credit union, purchases or otherwise acquires shares of that class, or membership shares, or acquires control of any entity that holds any share of that class, or any membership share, and the number of shares of that class, or the number of membership shares, purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares or in the membership shares of the federal credit union to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

• Marginal note:Percentage

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

• Marginal note:Percentage

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

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

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

• Marginal note:Exception

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

  • (a) result in the acquisition of control of the federal credit union by the person referred to in that subsection;

  • (b) result in the acquisition of a significant interest in a class of shares, or in membership shares, of the federal credit union by an entity controlled by the person and the acquisition of that investment is not exempted by the regulations; or

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

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

  • (a) exempting from the application of paragraph (4)(b) the acquisition of a significant interest in a class of shares, or in membership shares, of the federal credit union by an entity controlled by the person; and

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

Marginal note:When approval not required

• 383 (1) Despite sections 373 and 379, the approval of the Minister is not required if

  • (a) the Superintendent has, by order, directed the bank to increase its capital and shares or membership shares of the bank are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

  • (b) a person, other than an eligible agent, who controls, within the meaning of paragraph 3(1)(a), the bank acquires additional shares of the bank.

• Marginal note:Exception

  (2) Paragraph (1)(a) does not apply in respect of a bank with equity of twelve billion dollars or more.

Marginal note:Pre-approval

384 For the purposes of sections 373 and 379, the Minister may approve

• (a) the purchase or other acquisition of any number or percentage of shares or membership shares of a bank that may be required in a particular transaction or series of transactions; or

• (b) the purchase or other acquisition of up to a specified number or percentage of shares or membership shares of a bank within a specified period.

Marginal note:Public holding requirement

• 385 (1) Every bank with equity of two billion dollars or more but less than twelve billion dollars shall, from and after the day determined under this section in respect of that bank, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the bank and that are

  • (a) shares of one or more classes of shares that are listed and posted for trading on a recognized stock exchange in Canada; and

  • (b) shares none of which is beneficially owned by a person who is a major shareholder of the bank in respect of the voting shares of the bank or by any entity that is controlled by a person who is a major shareholder of the bank in respect of such shares.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a federal credit union.

• Marginal note:Determination of day

  (2) The day referred to in subsection (1) is

  • (a) if the bank had equity of two billion dollars or more but less than twelve billion dollars on the day the bank came into existence, the day that is three years after that day; and

  • (b) in any other case, the day that is three years after the day of the first annual meeting of the shareholders of the bank held after the equity of the bank first reaches two billion dollars.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that a bank has used its best efforts to be in compliance with this section on the day determined under subsection (2), the Minister may specify a later day as the day from and after which the bank must comply with subsection (1).

Marginal note:Public holding requirement

385.1 If a bank to which section 385 applies becomes a bank with equity of twelve billion dollars or more, that section continues to apply to the bank until no person is a major shareholder of the bank, other than a person to whom subsections 374(2) to (6) apply.

Marginal note:Limit on assets

• 386 (1) Unless an exemption order with respect to the bank is granted under section 388, if a bank fails to comply with section 385 in any month, the Minister may, by order, require the bank not to have, until it complies with that section, average total assets in any three month period ending on the last day of a subsequent month exceeding the bank’s average total assets in the three month period ending on the last day of the month immediately before the month specified in the order.

• Marginal note:Average total assets

  (2) For the purposes of subsection (1), the average total assets of a bank in a three month period is to be computed by adding the total assets of the bank as calculated for the month end of each of the three months in the period and by dividing the sum by three.

• Definition of total assets

  (3) For the purposes of subsections (1) and (2), total assets, in respect of a bank, has the meaning given that expression by the regulations.

Marginal note:Increase of capital

387 If the Superintendent has, by order, directed a bank with equity of two billion dollars or more but less than twelve billion dollars to increase its capital and shares of the bank are issued and acquired in accordance with any terms and conditions that may be specified in the order, section 385 does not apply in respect of the bank until the time that the Superintendent may, by order, specify.