Bank Act (S.C. 1991, c. 46)

Marginal note:Branch of account with respect to deposits

• 461 (1) For the purposes of this Act, the branch of account with respect to a deposit account is

  • (a) the branch the address or name of which appears on the specimen signature card or other signing authority signed by a depositor with respect to the deposit account or that is designated by agreement between the bank and the depositor at the time of opening of the deposit account; or

  • (b) if no branch has been identified or agreed on as provided in paragraph (a), the branch that is designated as the branch of account with respect thereto by the bank by notice in writing to the depositor.

• Marginal note:Where debt payable

  (2) The amount of any debt owing by a bank by reason of a deposit in a deposit account in the bank is payable to the person entitled thereto only at the branch of account and the person entitled thereto is not entitled to demand payment or to be paid at any other branch of the bank.

• Marginal note:Idem

  (3) Notwithstanding subsection (2), a bank may permit either occasionally or as a regular practice, the person to whom the bank is indebted by reason of a deposit in a deposit account in the bank to withdraw moneys owing by reason of that deposit at a branch of the bank other than the branch of account or to draw cheques or other orders for the payment of such moneys at a branch other than the branch of account.

• Marginal note:Situs of indebtedness

  (4) The indebtedness of a bank by reason of a deposit in a deposit account in the bank shall be deemed for all purposes to be situated at the place where the branch of account is situated.

Marginal note:Effect of writ, etc.

• 462 (1) Subject to subsections (3) and (4), the following documents are binding on property belonging to a person and in the possession of a bank, or on money owing to a person by reason of a deposit account in a bank, only if the document or a notice of it is served at the branch of the bank that has possession of the property or that is the branch of account in respect of the deposit account, as the case may be:

  • (a) a writ or process originating a legal proceeding or issued in or pursuant to a legal proceeding;

  • (b) an order or injunction made by a court;

  • (c) an instrument purporting to assign, perfect or otherwise dispose of an interest in the property or the deposit account; or

  • (d) an enforcement notice in respect of a support order or support provision.

• Marginal note:Notices

  (2) Any notification sent to a bank with respect to a customer of the bank, other than a document referred to in subsection (1) or (3), constitutes notice to the bank and fixes the bank with knowledge of its contents only if sent to and received at the branch of the bank that is the branch of account of an account held in the name of that customer.

• Marginal note:Notices: Minister of National Revenue

  (2.1) Despite subsections (1) and (2), a notice, demand, order or other document issued with respect to a customer of a bank constitutes notice to the bank and fixes the bank with knowledge of its contents and, where applicable, is binding on property belonging to the customer and in the possession of the bank or on money owing to the customer by reason of an account in the bank, if it is sent to the branch of the bank referred to in subsection (1) or (2), an office of the bank referred to in paragraph (3)(a) or any other office agreed to by the bank and the Minister of National Revenue and it relates to

  • (a) the administration of an Act of Parliament by the Minister of National Revenue; or

  • (b) the administration of an Act of the legislature of a province or legislation made by an aboriginal government, where the Minister or the Minister of National Revenue has entered into a tax collection agreement under an Act of Parliament with the government of the province or the aboriginal government.

• Marginal note:Exception

  (3) Subsections (1) and (2) do not apply in respect of an enforcement notice in respect of a support order or support provision if

  • (a) the enforcement notice, accompanied by a written statement containing the information required by the regulations, is served at an office of a bank designated in accordance with the regulations in respect of a province; and

  • (b) the order or provision can be enforced under the laws of that province.

• Marginal note:Time of application

  (4) Subsection (3) does not apply in respect of an enforcement notice in respect of a support order or support provision until the second business day following the day of service referred to in that subsection.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

  • (a) respecting the designation by a bank, for the purpose of subsection (3), of a place in any province for the service of enforcement notices in respect of support orders and support provisions;

  • (b) prescribing the manner in which a bank shall publicize the locations of designated offices of the bank; and

  • (c) respecting the information that must accompany enforcement notices in respect of support orders and support provisions.

• Marginal note:Definitions

  (6) The following definitions apply in this section.

  designated office

  designated office means a place designated in accordance with regulations made for the purpose of subsection (3). (bureau désigné)

  enforcement notice

  enforcement notice, in respect of a support order or support provision, means a garnishee summons or other instrument issued under the laws of a province for the enforcement of the support order or support provision. (avis d’exécution)

  support order

  support order means an order or judgment or interim order or judgment for family financial support. (ordonnance alimentaire)

  support provision

  support provision means a provision of an agreement relating to the payment of maintenance or family financial support. (disposition alimentaire)

Marginal note:Deemed loan

463 For the purposes of sections 425 to 436, where a bank accepts a bill of exchange drawn on it and not payable on demand or pays or makes money available for the payment of such a bill of exchange, or issues a guarantee, or otherwise makes a promise to effect a payment, the bank is deemed to lend money or make an advance.

PART IXInvestments

Definitions and Application

Marginal note:Definitions

• 464 (1) The following definitions apply in this Part.

  business growth fund

  business growth fund means Canadian Business Growth Fund (GP) Inc., a corporation incorporated under the Canada Business Corporations Act. (fonds de croissance des entreprises)

  closed-end fund

  closed-end fund means an entity whose activities are limited to investing the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities, and whose securities are

  • (a) fixed in number and distributed to the public in an offering under a preliminary prospectus, prospectus, short-form prospectus or similar document in accordance with the laws of a province or a foreign jurisdiction;

  • (b) traded on an exchange or an over-the-counter market; and

  • (c) liquidated on a fixed future termination date, the proceeds of which are allocated to the holders of the securities on a proportional basis. (fonds d’investissement à capital fixe)

  factoring entity

  factoring entity means a factoring entity as defined in the regulations. (entité s’occupant d’affacturage)

  finance entity

  finance entity means a finance entity as defined in the regulations. (entité s’occupant de financement)

  financial leasing entity

  financial leasing entity means an entity

  • (a) the activities of which are limited to the financial leasing of personal property and such related activities as are prescribed and whose activities conform to such restrictions and limitations thereon as are prescribed; and

  • (b) that, in conducting the activities referred to in paragraph (a) in Canada, does not

    • (i) direct its customers or potential customers to particular dealers in the leased property or the property to be leased,

    • (ii) enter into lease agreements with persons in respect of any motor vehicle having a gross vehicle weight, as that expression is defined by the regulations, of less than twenty-one tonnes, or

    • (iii) enter into lease agreements with natural persons in respect of personal household property, as that expression is defined by the regulations. (entité s’occupant de crédit-bail)

  loan

  loan includes an acceptance, endorsement or other guarantee, a deposit, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit but does not include investments in securities. (prêt ou emprunt)

  motor vehicle

  motor vehicle means a motorized vehicle designed to be used primarily on a public highway for the transportation of persons or things, but does not include

  • (a) a fire-engine, bus, ambulance or utility truck; or

  • (b) any other special purpose motorized vehicle that contains significant special features that make it suitable for a specific purpose. (véhicule à moteur)

  mutual fund distribution entity

  mutual fund distribution entity means an entity whose principal activity is acting as a selling agent of units, shares or other interests in a mutual fund and acting as a collecting agent in the collection of payments for any such interests if

  • (a) the proceeds of the sales of any such interests, less any sales commissions and service fees, are paid to the mutual fund; and

  • (b) the existence of a sales commission and service fee in respect of the sale of any such interest is disclosed to the purchaser of the interest before the purchase of the interest. (courtier de fonds mutuels)

  mutual fund entity

  mutual fund entity means an entity

  • (a) whose activities are limited to the investing of the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities; and

  • (b) whose securities entitle their holders to receive, on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in a part of its net assets, including a separate fund or trust account of the entity. (entité s’occupant de fonds mutuels)

  participating share

  participating share means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution and includes a membership share. (action participante)

  permitted entity

  permitted entity means an entity in which a bank is permitted to acquire a substantial investment under section 468. (entité admissible)

  prescribed subsidiary

  prescribed subsidiary means a subsidiary that is one of a prescribed class of subsidiaries. (filiale réglementaire)

  real property brokerage entity

  real property brokerage entity means an entity that is primarily engaged in

  • (a) acting as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property; and

  • (b) the provision of consulting or appraisal services in respect of real property. (courtier immobilier)

  specialized financing entity

  specialized financing entity means a specialized financing entity as defined in the regulations. (entité s’occupant de financement spécial)

• Marginal note:Members of a bank’s group

  (2) For the purpose of this Part, a member of a bank’s group is any of the following:

  • (a) an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank;

  • (b) a subsidiary of the bank or of an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank;

  • (c) an entity in which the bank, or an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank, has a substantial investment; or

  • (d) a prescribed entity in relation to the bank.

• Marginal note:Non-application of Part

  (3) This Part does not apply in respect of

  • (a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 479(a) to be an interest in real property; or

  • (b) the holding of a security interest in securities of an entity.

General Constraints on Investments

Marginal note:Investment standards

465 The directors of a bank shall establish and the bank shall adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return.

Marginal note:Limit — business growth fund

• 465.1 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a bank and its subsidiaries hold must not exceed $200,000,000.

• Marginal note:Application

  (2) For the purposes of subsection (1), the value of an ownership interest is determined by the amount paid for it at the time of its issuance.

Marginal note:Restriction on control and substantial investments

• 466 (1) Subject to subsections (2) to (4.4), no bank shall acquire control of, or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.

• Marginal note:Exception: indirect investments

  (2) A bank may, subject to Part XI, acquire control of, or acquire or increase a substantial investment in, an entity other than a permitted entity by way of

  • (a) an acquisition of control of an entity referred to in any of paragraphs 468(1)(a) to (j), or of a prescribed entity, that controls or has a substantial investment in the entity; or

  • (b) an acquisition of shares or ownership interests in the entity by

    • (i) an entity referred to in any of paragraphs 468(1)(a) to (j), or a prescribed entity, that is controlled by the bank, or

    • (ii) an entity controlled by an entity referred to in any of paragraphs 468(1)(a) to (j), or a prescribed entity, that is controlled by the bank.

• Marginal note:Exception: temporary investments, realizations and loan workouts

  (3) A bank may, subject to Part XI, acquire control of, or acquire or increase a substantial investment in, an entity by way of

  • (a) a temporary investment permitted by section 471;

  • (b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 472; or

  • (c) a realization of security permitted by section 473.

• Marginal note:Exception: specialized financing regulations

  (4) A bank may, subject to Part XI, acquire control of, or hold, acquire or increase a substantial investment in, an entity other than a permitted entity if it does so in accordance with regulations made under paragraph 467(d) concerning specialized financing.

• Marginal note:Business growth fund

  (4.1) Subject to section 465.1, subsections (4.2) to (4.4) and Part XI, a bank may hold, acquire or increase a substantial investment in the business growth fund or any entity that the business growth fund controls.

• Marginal note:For greater certainty

  (4.2) For greater certainty, a bank is prohibited from acquiring control of the business growth fund or any entity that the business growth fund controls.

• Marginal note:Prohibition — entity

  (4.3) A bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds or acquires shares of, or other ownership interests in, any of the following entities, or in any entity that controls any of the following entities:

  • (a) an entity referred to in any of paragraphs 468(1)(a) to (j);

  • (b) an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle;

  • (c) an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property;

  • (d) an entity that acts as an insurance broker or agent in Canada; or

  • (e) an entity that is engaged in any prescribed activity.

• Marginal note:Prohibition — capital and loans

  (4.4) A bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any entity that the business growth fund controls if the business growth fund or any entity that the business growth fund controls holds shares of, or other ownership interests in, an entity or holds a loan made to an entity and, in respect of that entity and its affiliates, the aggregate value of the following exceeds $100,000,000:

  • (a) all ownership interests that are held by the bank, the bank’s subsidiaries, the business growth fund or the entities that the business growth fund controls, the value of those ownership interests as determined by the amount paid for them at the time each was first acquired by any of those entities; and

  • (b) the outstanding principal of all loans held by the business growth fund or the entities that the business growth fund controls.

• Marginal note:Exception: uncontrolled event

  (5) A bank is deemed not to contravene subsection (1) if the bank acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the bank.

• Marginal note:Non-application of subsection (2)

  (5.1) No bank shall, under subsection (2), acquire control of, or acquire or increase a substantial investment in, an entity referred to in paragraph 468(1)(j).

• Marginal note:Holding

  (5.2) If a bank holds a substantial investment in an entity referred to in paragraph 468(1)(j) that it acquired or increased under subsection (2) before the coming into force of subsection (5.1), the bank may continue to hold that substantial investment.

• Marginal note:Application of other provision

  (6) Despite having acquired control of, or a substantial investment in, an entity under a particular provision of this Part, a bank may continue to control the entity or hold the substantial investment in the entity as though it had made the acquisition under another provision of this Part so long as the conditions set out in that other provision are met.

• Marginal note:Timing of deemed acquisition

  (7) If a bank decides to exercise its right under subsection (6), the bank is deemed to be acquiring the control or the substantial investment under the other provision.