Bank Act (S.C. 1991, c. 46)

Marginal note:Application

• 508 (1) This Part applies to

  • (a) a foreign bank that

    • (i) is a bank according to the laws of the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business,

    • (ii) engages in the business of providing financial services and employs, to identify or describe its business, a name that includes the word “bank”, “banque”, “banking” or “bancaire”, either alone or in combination with other words, or any word or words in any language other than English or French corresponding generally to any of those words, or

    • (iii) is regulated as a bank or as a deposit-taking institution according to the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business; and

  • (b) an entity that is associated with a foreign bank and that is

    • (i) a member of a material banking group,

    • (ii) controlled by a foreign bank described in any of subparagraphs (a)(i) to (iii), or

    • (iii) associated with a foreign bank described in any of subparagraphs (a)(i) to (iii) and that foreign bank or any entity controlled by that foreign bank is

      • (A) engaging in or carrying on business in Canada, other than holding, managing or otherwise dealing with real property,

      • (B) maintaining a branch in Canada, other than an office referred to in section 522,

      • (C) establishing, maintaining or acquiring for use in Canada an automated banking machine, a remote service unit or a similar automated service, or, in Canada, accepting data from such a machine, unit or service other than in circumstances described in section 511 or 512,

      • (D) acquiring or holding control of, or a substantial investment in, a Canadian entity, or

      • (E) acquiring or holding any share or ownership interest in a Canadian entity and

        • (I) an entity associated with the foreign bank holds control of, or a substantial investment in, the Canadian entity, or

        • (II) the foreign bank, an entity associated with the foreign bank and one or more other entities associated with the foreign bank would, if they were one person, hold control of, or a substantial investment in, the Canadian entity.

• Marginal note:Member of a material banking group

  (2) For the purposes of this section, an entity is a member of a material banking group if either of the following ratios, expressed as a percentage, is equal to or greater than the percentage prescribed for the purpose of this subsection:

  A/B or C/D

  where

  A

  is the sum of the total assets of all foreign banks described in any of subparagraphs (1)(a)(i) to (iii) with which the entity is associated, other than the total assets of foreign banks described in any of those subparagraphs whose assets are consolidated into the total assets of any foreign bank described in any of those subparagraphs with which the entity is associated;

  B

  is

  • (a) if the entity is not controlled by any person, the total assets of the entity, or

  • (b) in any other case, the sum of the total assets of the entity and of all its affiliates, other than entities whose total assets are consolidated into the total assets of an affiliate of the entity;

  C

  is the sum of the total revenue of all foreign banks described in any of subparagraphs (1)(a)(i) to (iii) with which the entity is associated, other than the total revenue of foreign banks described in any of those subparagraphs whose revenue is consolidated into the total revenue of any foreign bank described in any of those subparagraphs with which the entity is associated; and

  D

  is

  • (a) if the entity is not controlled by any person, the total revenue of the entity, or

  • (b) in any other case, the sum of the total revenue of the entity and of all its affiliates, other than entities whose total revenue is consolidated into the total revenue of an affiliate of the entity.

• Marginal note:Exemption from material banking group status

  (3) Despite subsection (2), the Minister may, subject to any terms and conditions that he or she considers appropriate, exempt an entity from being a member of a material banking group if neither of the ratios determined in accordance with that subsection in relation to that entity exceeds the percentage prescribed for the purposes of this subsection.

• Marginal note:Subsections 507(4) to (7) do not apply

  (4) Subsections 507(4) to (7) do not apply with respect to the making of any determination relating to control or a substantial investment for the purposes of subparagraph (1)(b)(iii).

• Marginal note:Definitions

  (5) The following definitions apply in this section.

  total assets

  total assets, in respect of an entity, means the total value of its assets

  • (a) as reported on a consolidated basis in its most recently completed financial statements that were prepared in accordance with generally accepted accounting principles in

    • (i) the jurisdiction in which the entity was formed or incorporated,

    • (ii) a jurisdiction in which it carries on business, or

    • (iii) a country or territory that is a WTO Member as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act; or

  • (b) if its most recently completed financial statements were not prepared in the manner described in paragraph (a), as would have been reported on a consolidated basis in its most recently completed financial statements had they been prepared in accordance with generally accepted accounting principles in Canada. (actif total)

  total revenue

  total revenue, in respect of an entity, means its total revenue

  • (a) as reported on a consolidated basis in its most recently completed financial statements that were prepared in accordance with generally accepted accounting principles in

    • (i) the jurisdiction in which the entity was formed or incorporated,

    • (ii) a jurisdiction in which it carries on business, or

    • (iii) a country or territory that is a WTO Member as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act; or

  • (b) if its most recently completed financial statements were not prepared in the manner described in paragraph (a), as would have been reported on a consolidated basis in its most recently completed financial statements had they been prepared in accordance with generally accepted accounting principles in Canada. (recettes d’exploitation totales)

509 [Repealed, 2007, c. 6, s. 49]

509.1 [Repealed, 2007, c. 6, s. 49]

DIVISION 2General Prohibitions and Exceptions

Marginal note:Prohibited activities

• 510 (1) Except as permitted by this Part, a foreign bank or an entity associated with a foreign bank shall not

  • (a) in Canada, engage in or carry on

    • (i) any business that a bank is permitted to engage in or carry on under this Act, or

    • (ii) any other business;

  • (b) maintain a branch in Canada for any purpose;

  • (c) establish, maintain or acquire for use in Canada an automated banking machine, a remote service unit or a similar automated service, or in Canada accept data from such a machine, unit or service; or

  • (d) acquire or hold control of, or a substantial investment in, a Canadian entity.

• Marginal note:Deeming re acts of agent, etc. — foreign banks

  (2) For the purposes of this Part, a foreign bank is deemed to be carrying out or to have carried out anything prohibited by subsection (1) if it is carried out by a nominee or agent of the foreign bank acting as such.

• Marginal note:Deeming re acts of agent, etc. — associated entities

  (3) For the purposes of this Part, an entity associated with a foreign bank is deemed to be carrying out or to have carried out anything prohibited by subsection (1) if it is carried out by a nominee or agent of the entity associated with the foreign bank acting as such.

• Marginal note:Non-application re federal institutions associated with a foreign bank

  (4) Subsection (1) does not apply to

  • (a) an entity referred to in any of paragraphs 468(1)(a) to (f) that is an entity associated with a foreign bank; or

  • (b) a Canadian entity that an entity referred to in paragraph (a) controls, or in which such an entity has a substantial investment.

• Marginal note:Non-application re Canadian entity associated with a foreign bank

  (5) Paragraphs (1)(a) and (b) do not apply to a Canadian entity that is an entity associated with a foreign bank and that is held or acquired in accordance with this Part.

Marginal note:Limit — business growth fund

• 510.01 (1) The aggregate value of all ownership interests in the business growth fund and the entities that the business growth fund controls that a foreign bank and the entities associated with it 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:Business growth fund

• 510.02 (1) Subject to section 510.01 and subsections (2) to (4), a foreign bank or an entity associated with a foreign bank may hold or acquire a substantial investment in the business growth fund or a Canadian entity that the business growth fund controls.

• Marginal note:For greater certainty

  (2) For greater certainty, a foreign bank or an entity associated with a foreign bank is prohibited from acquiring control of the business growth fund or any Canadian entity that the business growth fund controls.

• Marginal note:Prohibition — entity

  (3) A foreign bank or an entity associated with a foreign bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any Canadian 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) A foreign bank or an entity associated with a foreign bank is prohibited from holding or acquiring a substantial investment in the business growth fund or any Canadian 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 foreign bank, the entities associated with the foreign bank, 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 re real property holding and management

510.1 Except as may be prescribed, paragraphs 510(1)(a) and (b) do not apply in respect of the holding or managing of, or otherwise dealing with, real property in Canada by a foreign bank or an entity associated with a foreign bank.

Marginal note:Exception re accessing accounts

511 Nothing in paragraphs 510(1)(a) to (c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from providing its customers who are natural persons not ordinarily resident in Canada with access in Canada to their accounts located outside Canada through the use of automated banking machines located in Canada.

Marginal note:Exception re quotations

512 Nothing in paragraphs 510(1)(a) to (c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from establishing, maintaining or using a private telephone service or similar facility for the purpose of quoting to customers in Canada, or entering with customers in Canada into verbal agreements relating to, foreign exchange, deposit or loan rates if there is no accounting or information processing involved in the private telephone service or similar facility.

Marginal note:Exception re automated services

• 513 (1) A foreign bank, or an entity associated with a foreign bank, that has received the approval of the Minister under paragraph 522.22(1)(f) may

  • (a) if it is a foreign securities dealer that has also received the approval of the Minister under paragraph 522.22(1)(i), engage in the activities referred to in paragraph 510(1)(c) so long as they relate to its business referred to in paragraph 522.18(1)(b); and

  • (b) if it is a foreign cooperative credit society, engage in the activities referred to in paragraph 510(1)(c) so long as they relate to its business as a cooperative credit society engaged in or carried on by it in accordance with provincial laws relating to cooperative credit societies.

• Marginal note:Non-application

  (2) Paragraph 510(1)(c) does not apply to

  • (a) a Canadian entity referred to in any of paragraphs 468(1)(g) to (i);

  • (b) a prescribed Canadian entity, other than a permitted Canadian entity, that is controlled by a Canadian entity referred to in paragraph (a); or

  • (c) any other Canadian entity, other than a limited commercial entity, that is acquired or held by a foreign bank or an entity associated with a foreign bank in accordance with Divisions 4 and 5, and that has received the approval of the Minister under paragraph 522.22(1)(i).