Bank Act (S.C. 1991, c. 46)

Marginal note:Reasonable opportunity to make representations

• 400 (1) If, after receipt of the notice referred to in paragraph 399(1)(b), the applicant advises the Minister that the applicant wishes to make representations, the Minister must provide the applicant with a reasonable opportunity within a period of thirty days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter.

• Marginal note:Reasonable opportunity to make representations

  (2) If, after receipt of the notice sent in accordance with subsection 399(2) that the Minister is not satisfied that the transaction to which the application relates should be approved, the applicant advises the Minister that the applicant wishes to make representations, the Minister must provide the applicant with a reasonable opportunity within a period of 45 days after the date of the notice, or within any further period that may be agreed on by the applicant and the Minister, to make representations in respect of the matter.

Marginal note:Notice of decision

• 401 (1) Within a period of thirty days after the expiration of the period for making representations referred to in subsection 400(1), the Minister shall, in the light of any such representations and having regard to the matters to be taken into account, send a notice to the applicant indicating whether or not the Minister approves the transaction to which the application relates.

• Marginal note:Notice of decision

  (2) Within a period of forty-five days after the expiration of the period for making representations referred to in subsection 400(2), the Minister shall, in the light of any such representations and having regard to the matters to be taken into account, send a notice to the applicant indicating whether or not the Minister approves the transaction to which the application relates.

Marginal note:Deemed approval

401.1 If the Minister does not send a notice under subsection 399(1) or (3) or 401(1) within the period provided for in those subsections, the Minister is deemed to have approved the transaction to which the application relates.

Marginal note:Federal credit union constraints

401.11 Subject to this Act, a federal credit union may by by-law impose, change or remove restrictions on the issue, transfer or ownership of its membership shares, or shares of any class of the shares of the federal credit union, in order to prevent a person from having a significant interest in the membership shares or shares of that class.

Marginal note:Constraining registration: Crown and foreign governments

• 401.2 (1) No bank is to record in its securities register or members register a transfer or issue of any share or membership share of the bank to

  • (a) Her Majesty in right of Canada or of a province or any agent or agency of Her Majesty in either of those rights; or

  • (b) the government of a foreign country or any political subdivision of a foreign country, or any agent or agency of a foreign government.

• Marginal note:Exception

  (2) Despite subsection (1), a bank may record in its securities register or members register a transfer or issue of any share or membership share of the bank to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share or membership share that is transferred or issued is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

• Marginal note:Certain foreign banks excluded

  (2.1) Subsection (2) does not permit a bank to record in its securities register or members register a transfer or issue of any share or membership share of the bank to a foreign bank that is a foreign bank by reason only of paragraph (f) of the definition foreign bank in section 2.

• Marginal note:Exception

  (3) Despite subsection (1), a bank may, with the Minister’s approval, record in its securities register the issue of any share of the bank to an eligible agent.

• Marginal note:Application made jointly

  (4) The application for the approval referred to in subsection (3) must be made jointly by the bank and the eligible agent.

• Marginal note:Matters for consideration

  (5) The Minister, in determining whether to grant the approval referred to in subsection (3), shall take into account all matters that he or she considers relevant, including those set out in paragraphs 396(1)(a) to (h).

• Marginal note:Consequence of revocation of approval

  (6) If an approval referred to in subsection (3) is revoked, the bank shall delete any entry in its securities register in respect of the recording of the issuance of shares to the eligible agent.

• Marginal note:Disposition of shareholdings

  (7) If a bank or an eligible agent fails to comply with any undertaking or term or condition in relation to an approval referred to in subsection (3), or if an eligible agent ceases to be an eligible agent, the Minister may, if the Minister considers it to be in the public interest to do so, by order, direct the eligible agent or former eligible agent and any person controlled by the eligible agent or former eligible agent to dispose of any number of shares of the bank beneficially owned by the eligible agent or former eligible agent or the persons controlled by the eligible agent or former eligible agent that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the eligible agent or former eligible agent and the persons controlled by the eligible agent or former eligible agent that is specified in the order.

• Marginal note:Representations

  (8) No direction shall be made under subsection (7) unless the Minister has provided each person to whom the direction relates and the bank concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction.

• Marginal note:Appeal

  (9) Any person with respect to whom a direction has been made under subsection (7) may, within 30 days after the date of the direction, appeal the matter in accordance with section 977.

Marginal note:Suspension of voting rights held by governments

• 401.3 (1) Despite section 148, no person shall, in person or by proxy, exercise any voting rights attached to any share of a bank that is beneficially owned by

  • (a) Her Majesty in right of Canada or of a province or any agency of Her Majesty in either of those rights; or

  • (b) the government of a foreign country or any political subdivision thereof, or any agency thereof.

• Marginal note:Suspension of voting rights held by governments

  (2) Despite subsection 79.2(2), a member of a federal credit union must not, in person or by delegate, vote as a member of the federal credit union if the member is, or is an entity controlled by,

  • (a) Her Majesty in right of Canada or of a province or any agency of Her Majesty in either of those rights; or

  • (b) the government of a foreign country or any political subdivision thereof, or any agency thereof.

• Marginal note:Exception

  (3) Subsections (1) and (2) do not apply to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share referred to in subsection (1), or, in the case of a federal credit union, a membership share, is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

• Marginal note:Exception — eligible agent

  (4) Subsection (1) does not apply in respect of the exercise of voting rights attached to any share referred to in subsection 401.2(3).

• Marginal note:Consequence of suspension of approval

  (5) If an approval referred to in subsection 401.2(3) is suspended, the eligible agent shall not exercise, in person or by proxy, any voting rights attached to any share of the bank that is beneficially owned by the eligible agent.

DIVISION VDirections

Marginal note:Disposition

• 402 (1) If, with respect to any bank, a person contravenes section 372 or subsection 373(1), 374(1) or 375(1) or section 376.1 or 376.2, subsection 377(1) or section 377.1 or 377.2 or fails to comply with an undertaking referred to in subsection 390(2) or with any terms and conditions imposed under section 397, the Minister may, if the Minister considers it in the public interest to do so, by order, direct that person and any person controlled by that person to

  • (a) dispose of any number of shares of the bank beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by that person that is specified in the order;

  • (b) dispose of any number of membership shares of the bank beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by that person that is specified in the order; or

  • (c) take any other action that is necessary for any of those persons to cease controlling, within the meaning of paragraph 3(1)(a.1), the federal credit union.

• Marginal note:Representations

  (2) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the bank concerned with a reasonable opportunity to make representations in respect of the subject-matter of the direction.

• Marginal note:Appeal

  (3) Any person with respect to whom a direction has been made under subsection (1) may, within thirty days after the date of the direction, appeal the matter in accordance with section 977.

• (4) [Repealed, 2001, c. 9, s. 99]

Marginal note:Permission to become another body corporate

402.1 If subsection 402(1) applies, the Minister may, on application by the bank, permit the bank to apply to be continued as a body corporate under any Act of Parliament referred to in subsection 39.1(1) or 39.2(1) instead of, or in addition to, issuing an order under subsection 402(1).

Marginal note:Disposition — threat to integrity or security

• 402.2 (1) If the Minister is of the opinion that a person’s holding or beneficial ownership of shares or membership shares of a bank poses a threat to the integrity or security of the bank or the financial system in Canada or a threat to national security, the Minister may, by order, direct that person and any person controlled by that person to

  • (a) dispose of any number of shares of the bank held or beneficially owned by any of the persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by the person that is specified in the order; or

  • (b) dispose of any number of membership shares of the bank held or beneficially owned by any of the persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by the person that is specified in the order.

• Marginal note:Suspension of rights

  (2) A direction made under subsection (1) may also suspend any of the rights under Part VI attached to the shares referred to in paragraph (1)(a) or the membership shares referred to in paragraph (1)(b) until the shares or membership shares are disposed of in accordance with the direction.

• Marginal note:Representations

  (3) No direction shall be made under subsection (1) unless the Minister has provided each person to whom the direction relates and the bank concerned with a reasonable opportunity to make representations.

• Marginal note:Temporary direction

  (4) If, in the Minister’s opinion, the length of time required for representations to be made under subsection (3) might be prejudicial to the public interest, the Minister may make a temporary direction to suspend any of the rights under Part VI attached to any of the shares referred to in paragraph (1)(a) or the membership shares referred to in paragraph (1)(b).

• Marginal note:Cessation of effect

  (5) A temporary direction ceases to have effect on the earlier of

  • (a) the expiry of 30 days after the day on which it takes effect or of a shorter period that is specified in the temporary direction, and

  • (b) if a direction is made under subsection (1) in respect of the shares or membership shares, the day on which that direction takes effect.

• Marginal note:Appeal

  (6) Any person with respect to whom a direction has been made under subsection (1) may, within 30 days after the day on which the direction was made, appeal the matter in accordance with section 977.

• Marginal note:Notice — Committee and Review Agency

  (7) If a direction has been made under subsection (1) or (4) for reasons related to national security, the Minister shall, within 30 days after the day on which the direction was made, notify

  • (a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act; and

  • (b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.

Marginal note:Application to court

• 403 (1) If a person fails to comply with a direction made under subsection 401.2(7), 402(1) or 402.2(1), an application on behalf of the Minister may be made to a court for an order to enforce the direction.

• Marginal note:Court order

  (2) A court may, on an application under subsection (1), make any order that the circumstances require to give effect to the terms of the direction, including requiring the bank concerned to sell the shares, or to redeem, purchase or transfer to another member the membership shares, that are the subject-matter of the direction.

• Marginal note:Appeal

  (3) An appeal from an order of a court under this section lies in the same manner as, and to the same court to which, an appeal may be taken from any other order of the court.

General Provisions

Marginal note:Interest of securities underwriter

404 This Part does not apply to a securities underwriter in respect of shares of a body corporate or ownership interests in an unincorporated entity that are acquired by the underwriter in the course of a distribution to the public of those shares or ownership interests and that are held by the underwriter for a period of not more than six months.

Marginal note:Arrangements to effect compliance

• 405 (1) The directors of a bank may make such arrangements as they deem necessary to carry out the intent of this Part and, in particular, but without limiting the generality of the foregoing, may

  • (a) require any person in whose name a share or membership share of the bank is held to submit a declaration setting out

    • (i) the beneficial ownership of the share or membership share, and

    • (ii) any other information that the directors consider relevant for the purposes of this Part;

  • (b) require any person who wishes to have a transfer of a share or membership share registered in the name of, or to have a share or membership share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share or membership share; and

  • (c) determine the circumstances in which a declaration referred to in paragraph (a) is to be required, the form of the declaration and the times at which it is to be submitted.

• Marginal note:Order of Superintendent

  (2) The Superintendent may, by order, direct a bank to obtain from any person in whose name a share or membership share of the bank is held a declaration setting out the name of every entity controlled by that person and containing information concerning

  • (a) the ownership or beneficial ownership of the share or membership share; and

  • (b) such other related matters as are specified by the Superintendent.

• Marginal note:Compliance required

  (3) As soon as possible after receipt by a bank of a direction under subsection (2),

  • (a) the bank shall comply with the direction; and

  • (b) every person who is requested by the bank to provide a declaration containing information referred to in subsection (1) or (2) shall comply with the request.

• Marginal note:Outstanding declaration: effect

  (4) If, under this section, a declaration is required to be submitted by a shareholder, member or other person in respect of the issue or transfer of any share or membership share, a bank may refuse to issue the share or membership share or register the transfer unless the required declaration is submitted.