Bank Act (S.C. 1991, c. 46)

514 [Repealed, 2007, c. 6, s. 53]

515 [Repealed, 2007, c. 6, s. 53]

Marginal note:Change of status

• 516 (1) If an entity becomes a foreign bank, or an entity associated with a foreign bank, to which this Part applies and immediately before it became such a foreign bank or such an entity it maintained a branch or engaged in or carried on business in Canada that is not permitted by or under this Part, it may continue to maintain that branch or engage in or carry on that business for a period of six months after the day on which it became such a foreign bank or such an entity, or for any other shorter period that may be specified or approved by the Minister.

• Marginal note:Transitional

  (2) If a foreign bank or an entity associated with a foreign bank was permitted by section 516 or 517, as that section read immediately before the day on which this subsection came into force, to maintain a branch or engage in or carry on business in Canada that is not permitted by or under this Part, it may continue to maintain that branch or engage in or carry on that business for the period during which it could have done so under that section.

Marginal note:Change of status

• 517 (1) If an entity becomes a foreign bank, or an entity associated with a foreign bank, to which this Part applies and immediately before it became such a foreign bank or such an entity it held control of, or a substantial investment in, a Canadian entity and that control or substantial investment is not permitted by or under this Part, it may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months after the day on which it became such a foreign bank or such an entity, or for any other shorter period that may be specified or approved by the Minister.

• Marginal note:Transitional

  (2) If a foreign bank or an entity associated with a foreign bank was permitted by section 516 or 517, as that section read immediately before the day on which this subsection came into force, to hold control of, or a substantial investment in, a Canadian entity and that holding is not permitted by or under this Part, it may continue to hold control of, or the substantial investment in, the Canadian entity for the period during which it could have done so under that section.

Marginal note:Restriction

517.1 If an order has been made under subsection 973.1(1) in respect of a foreign bank or an entity associated with a foreign bank and section 516 or 517 applies to the foreign bank or entity, as the case may be, the period under section 516 or 517 may not extend beyond the expiry of the period referred to in the order made under subsection 973.1(1).

Marginal note:Prohibition re guarantee and acceptance of securities and bills

• 518 (1) Subject to subsections (2) to (4),

  • (a) a foreign bank shall not guarantee any securities or accept any bills of exchange or depository bills that are issued by a person resident in Canada and that are intended by the issuer or by any party to the security or bill to be sold or traded in Canada; and

  • (b) no person shall participate in any arrangement in connection with a guarantee or acceptance prohibited by paragraph (a).

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of the guarantee or acceptance by a foreign bank of securities, bills of exchange or depository bills that are issued by

  • (a) a non-bank affiliate of the foreign bank;

  • (b) any other person resident in Canada and guaranteed or accepted by

    • (i) a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank,

    • (ii) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i) in which a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank, holds a substantial investment,

    • (iii) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i) that is controlled by a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank,

    • (iv) a Canadian entity referred to in any of paragraphs 468(1)(b) to (i) that is a non-bank affiliate of the foreign bank, or

    • (v) a prescribed entity;

  • (c) a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank;

  • (d) a Canadian entity in which a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank, holds a substantial investment;

  • (e) a Canadian entity controlled by a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank; or

  • (f) a prescribed entity.

• Marginal note:Exception

  (3) Subsection (1) does not apply in respect of

  • (a) the business in Canada of an authorized foreign bank; or

  • (b) a foreign insurance company in relation to its insurance business in Canada.

• Marginal note:Exception

  (4) Despite subsection (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 guarantee any securities or accept any bills of exchange or depository bills in relation to its business permitted under paragraph 522.18(1)(a) or (b).

Marginal note:Prohibited activities — non-bank affiliates

• 519 (1) Despite subsections 510(4) and (5), a non-bank affiliate of a foreign bank shall not, in Canada,

  • (a) engage in the business of accepting deposit liabilities;

  • (b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank, other than for

    • (i) an authorized foreign bank,

    • (ii) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society, or

    • (iii) an entity referred to in any of paragraphs 468(1)(a), (c), (d) and (h) or a trust or loan corporation referred to in paragraph 468(1)(g); or

  • (c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.

• Marginal note:Exception

  (2) Subsection (1) does not apply to a non-bank affiliate that is

  • (a) a trust or loan corporation incorporated by or under an Act of Parliament or of the legislature of a province;

  • (b) a Canadian entity referred to in paragraph 468(1)(d) or (h); or

  • (c) a prescribed entity.

Marginal note:Borrowing from the public — non-bank affiliates

• 519.1 (1) A non-bank affiliate of a foreign bank that carries on as part of its business the provision of financial services may borrow money in Canada from the public only if it discloses that

  • (a) it is not a member institution of the Canada Deposit Insurance Corporation;

  • (b) the liability incurred by it through the borrowing is not a deposit; and

  • (c) it is not regulated as a financial institution in Canada.

• Marginal note:Manner of disclosure

  (2) The disclosure must be

  • (a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

  • (b) in any other manner that may be prescribed.

• Marginal note:Exception for certain borrowing

  (3) Subsection (1) does not apply

  • (a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or

  • (b) except as may be provided in any regulations, to a borrowing

    • (i) from a person in an amount of $150,000 or more, or

    • (ii) through the issue of instruments in denominations of $150,000 or more.

• Marginal note:Exception

  (4) Subsection (1) does not apply to a non-bank affiliate that is

  • (a) a Canadian entity referred to in any of paragraphs 468(1)(b), (c) or (e) to (g);

  • (b) an entity controlled by a bank holding company or an insurance holding company or in which a bank holding company or an insurance holding company has a substantial investment;

  • (c) a financial institution referred to in paragraph (g) of the definition financial institution in section 2; or

  • (d) a prescribed entity.

Marginal note:Prohibition re deposits

• 520 (1) A foreign bank — or an entity that is associated with a foreign bank and that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province — shall not, as part of its business in Canada,

  • (a) engage in the business of accepting deposit liabilities;

  • (b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank; or

  • (c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.

• Marginal note:Exception

  (2) Subsection (1) does not apply to

  • (a) a foreign bank that is an authorized foreign bank; or

  • (b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society.

• Marginal note:Exception

  (3) Paragraph (1)(b) does not apply to a foreign securities dealer that has received the approval of the Minister under paragraph 522.22(1)(f) or to a foreign insurance company — or to a prescribed entity — that engages in the business of acting as an agent for the acceptance of deposit liabilities for

  • (a) an authorized foreign bank;

  • (b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society; or

  • (c) an entity referred to in paragraph 468(1)(a), (c), (d) or (h) or a trust or loan corporation referred to in paragraph 468(1)(g).

Marginal note:Borrowing from the public

• 520.1 (1) A foreign bank — or an entity that is associated with a foreign bank and that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province — may, as part of its business in Canada, borrow money in Canada from the public only if

  • (a) it maintains a branch in Canada as permitted by section 522.05 or 522.19 or it engages in or carries on business in Canada as permitted by that section; and

  • (b) it discloses that

    • (i) it is not a member institution of the Canada Deposit Insurance Corporation,

    • (ii) the liability incurred through the borrowing is not a deposit, and

    • (iii) it is not regulated as a financial institution in Canada.

• Marginal note:Manner of disclosure

  (2) The disclosure must be

  • (a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or

  • (b) in any other manner that may be prescribed.

• Marginal note:Exception for certain borrowing

  (3) The disclosure is not required in respect of

  • (a) a borrowing of a prescribed class or type or a borrowing in prescribed circumstances or in a prescribed manner; or

  • (b) except as may be provided in any regulations, a borrowing

    • (i) from a person in an amount of $150,000 or more, or

    • (ii) through the issue of instruments in denominations of $150,000 or more.

• Marginal note:Exception

  (4) Subsection (1) does not apply to

  • (a) an authorized foreign bank;

  • (b) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society;

  • (c) a foreign insurance company;

  • (d) a foreign securities dealer that has received the approval of the Minister under paragraph 522.22(1)(f); or

  • (e) a prescribed entity.

Marginal note:Regulations

521 The Governor in Council may make regulations exempting any class or classes of businesses, investments, activities and branches from any of the prohibitions set out in section 510 or 518.

Marginal note:Permitted Canadian offices

522 A foreign bank may

• (a) with the approval of the Superintendent and

  • (i) subject to any terms and conditions that are attached to the approval, and

  • (ii) subject to and in accordance with rules that are prescribed in relation to the operation of representative offices and the conduct of their personnel,

  maintain representative offices in Canada that are registered with the Superintendent in the prescribed manner; and

• (b) with the approval of the Governor in Council and subject to any terms and conditions that are attached to the approval, locate its head office in Canada and, from that office, issue directions and do all other things reasonably necessary for the conduct of its banking business outside Canada.