Bank Act (S.C. 1991, c. 46)

PART XII.1Authorized Foreign Banks

Application

Marginal note:Application to authorized foreign banks

• 523 (1) This Part applies only in respect of the business in Canada of authorized foreign banks.

• Marginal note:Assets and liabilities

  (2) The assets and liabilities of an authorized foreign bank in respect of its business in Canada, as shown by its books and records, are considered to be the assets and liabilities of the authorized foreign bank in respect of its business in Canada.

Formalities of Authorization

Marginal note:Order permitting carrying on of business in Canada, etc.

• 524 (1) On application by a foreign bank, the Minister may make an order permitting the foreign bank to establish a branch in Canada to carry on business in Canada under this Part.

• Marginal note:Restrictions and requirements

  (2) The order may be made subject to the restrictions referred to in subsection 540(1) and the requirements referred to in section 627.74.

• Marginal note:Reciprocal treatment

  (3) The Minister may make an order only if the Minister is satisfied that, if the application is made by a non-WTO Member foreign bank, treatment as favourable for banks to which this Act applies exists or will be provided in the jurisdiction in which the authorized foreign bank principally carries on business, either directly or through a subsidiary.

• Marginal note:Consultation with Superintendent

  (4) The Minister may make an order only if the Minister is of the opinion, after consultation with the Superintendent, that

  • (a) the applicant is a bank in the jurisdiction under whose laws it was incorporated and is regulated in a manner acceptable to the Superintendent; and

  • (b) the applicant’s principal activity is the provision of

    • (i) financial services, or

    • (ii) services that would be permitted by this Act if they were provided by a bank in Canada.

Marginal note:Prohibition

524.1 No foreign bank may establish a branch in Canada to carry on business in Canada under this Part if the foreign bank or an entity affiliated with the foreign bank

• (a) has control of or has a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in; or

• (b) engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in.

Marginal note:Prohibition

524.2 No authorized foreign bank and no entity affiliated with an authorized foreign bank may

• (a) control or have a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in; or

• (b) engage in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in.

Marginal note:Policies and procedures — integrity or security

524.3 An authorized foreign bank shall establish and adhere to policies and procedures to protect itself against threats to its integrity or security in relation to its business in Canada.

Marginal note:Application procedure

• 525 (1) An application for an order under subsection 524(1) shall be filed with the Superintendent, together with any other information, material and evidence that the Superintendent may require.

• Marginal note:Publishing notice of intent

  (2) Before filing an application, a foreign bank applicant shall, at least once a week for a period of four consecutive weeks, publish, in a form satisfactory to the Superintendent, a notice of intention to make the application in the Canada Gazette and in a newspaper in general circulation at or near the place where its principal office is to be situated.

• Marginal note:Objections

  (3) A person who objects to the proposed order may, within thirty days after the date of the last publication under subsection (2), submit the objection in writing to the Superintendent.

• Marginal note:Minister to be informed

  (4) On receipt of an objection, the Superintendent shall inform the Minister of it.

• Marginal note:Inquiry into objection and report

  (5) On receipt of an objection, and if the application for the order has been received, the Superintendent shall, if satisfied that it is necessary and in the public interest to do so, hold or cause to be held a public inquiry into the objection as it relates to the application and, on completion of the inquiry, the Superintendent shall report the findings of the inquiry to the Minister.

• Marginal note:Report to be made available

  (6) Within thirty days after receiving the report, the Minister shall make it available to the public.

• Marginal note:Rules governing proceedings

  (7) Subject to the approval of the Governor in Council, the Superintendent may make rules governing the proceedings at public inquiries held under this section.

Marginal note:Factors to be considered by Minister

526 Before making an order under subsection 524(1), the Minister shall take into account all matters that the Minister considers relevant to the application, including

• (a) the nature and sufficiency of the financial resources of the foreign bank as a source of continuing financial support for the carrying on of its business in Canada;

• (b) the soundness and feasibility of plans of the foreign bank for the future conduct and development of its business in Canada;

• (c) the business record and past performance of the foreign bank;

• (d) the reputation of the foreign bank for being operated in a manner that is consistent with the standards of good character and integrity;

• (e) whether the proposed authorized foreign bank will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

• (f) the impact of any integration of the businesses and operations in Canada of the authorized foreign bank with those of its affiliates in Canada on the conduct of those businesses and operations; and

• (g) the best interests of the financial system in Canada.

Marginal note:Contents of order

• 527 (1) An order made under subsection 524(1) shall set out

  • (a) the name of the authorized foreign bank and, where applicable, the name under which it is permitted to carry on business in Canada;

  • (b) the province in which the principal office of the authorized foreign bank is to be situated;

  • (c) whether the authorized foreign bank is subject to any restrictions and requirements referred to in subsection 524(2); and

  • (d) the date on which the order becomes effective.

• Marginal note:Provisions of order

  (2) The Minister may set out in the order any provision not contrary to this Act that the Minister considers advisable in order to take into account the particular circumstances of the proposed authorized foreign bank with respect to the carrying on of business in Canada.

• Marginal note:Terms and conditions

  (3) The Minister may impose any terms and conditions in respect of the order that the Minister considers appropriate.

• Marginal note:Notice of order

  (4) The Superintendent shall cause to be published in the Canada Gazette a notice of the making of the order.

Marginal note:Amended order

• 528 (1) On application by an authorized foreign bank, the Minister may, by further order,

  • (a) [Repealed, 2007, c. 6, s. 75]

  • (b) add any provision referred to in subsection 527(2) or any term or condition referred to in subsection 527(3) or change or remove any of those provisions, terms or conditions that are included in the order made under subsection 524(1) or in any other order made under this section; or

  • (c) add or remove the restrictions and requirements referred to in subsection 524(2).

• Marginal note:Change of name

  (1.1) On application by an authorized foreign bank, the Superintendent may, by order, change the name under which it is permitted to carry on business in Canada or the province in which its principal office is situated as that name or province is set out in the order made under subsection 524(1) or in any other order made under this section.

• Marginal note:Notice of intention

  (2) Before making an application under subsection (1), the authorized foreign bank must publish a notice of intention to make the application at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper of general circulation at or near the place where its principal office is situated.

Marginal note:Transitional

• 529 (1) Subject to this section but notwithstanding any other provision of this Act or the regulations, the Minister may, on the recommendation of the Superintendent, by order, grant an authorized foreign bank permission to

  • (a) engage in a business activity specified in the order that an authorized foreign bank is not otherwise permitted by this Part to engage in;

  • (b) have liabilities that an authorized foreign bank is not otherwise permitted by this Part to have, if the authorized foreign bank or an affiliate of the authorized foreign bank had those liabilities at the time an application for an order under subsection 524(1) was made;

  • (c) hold assets that an authorized foreign bank is not otherwise permitted by this Part to hold, if the assets were held, at the time an application for an order under subsection 524(1) was made, by the authorized foreign bank or an affiliate of the authorized foreign bank;

  • (d) acquire and hold assets that an authorized foreign bank is not otherwise permitted by this Part to acquire or hold if the authorized foreign bank was obliged, at the time an application for an order under subsection 524(1) was made, to acquire those assets;

  • (e) [Repealed, 2001, c. 9, s. 136]

  • (f) in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), carry on business in Canada without having to deposit assets having a value of at least five million dollars, as required by subparagraphs 534(3)(a)(ii) and 582(1)(b)(i), if the authorized foreign bank continues to hold a substantial investment in

    • (i) a bank that is a subsidiary of a foreign bank and the Minister has approved an application for letters patent dissolving the bank made by the subsidiary under section 344, or

    • (ii) a company to which the Trust and Loan Companies Act applies and the Minister has approved an application for letters patent dissolving the company made under section 349 of that Act; or

  • (g) maintain outside Canada any records or registers required by this Act to be maintained in Canada.

• Marginal note:Restriction

  (2) An order under subsection (1) may not be made if the effect of the order would be to permit an authorized foreign bank to

  • (a) contravene section 545, in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2); or

  • (b) have deposit liabilities so as to cause the authorized foreign bank to be in contravention of section 540, in the case of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2).

• Marginal note:Duration

  (3) Permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding

  • (a) with respect to any activity described in paragraph (1)(a), thirty days after the day on which an order made under subsection 524(1) becomes effective in respect of the authorized foreign bank or, where the activity is conducted pursuant to an agreement existing on that day, on the expiration of the agreement;

  • (b) with respect to any matter described in paragraph (1)(b), ten years; and

  • (c) with respect to any matter described in any of paragraphs (1)(c) to (g), two years.

• Marginal note:Renewal

  (4) Subject to subsection (5), the Minister may, on the recommendation of the Superintendent, by order, renew permission granted under subsection (1) with respect to any matter described in paragraphs (1)(b) to (f) for any further period or periods that the Minister considers necessary.

• Marginal note:Limitation

  (5) The Minister may not grant to an authorized foreign bank any permission

  • (a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the day on which an order made under subsection 534(1) becomes effective in respect of the authorized foreign bank, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the authorized foreign bank that the authorized foreign bank will not be able at law to redeem or discharge at the end of the ten years any liabilities to which the permission relates;

  • (b) with respect to matters described in paragraphs (1)(c) and (d), that purports to be effective more than ten years after the day on which an order made under subsection 534(1) becomes effective in respect of the authorized foreign bank; and

  • (c) with respect to matters described in paragraph (1)(f), that purports to be effective more than seven years after the day on which an order made under subsection 534(1) becomes effective in respect of the authorized foreign bank.

Marginal note:Prohibited names

• 530 (1) An order made under subsection 524(1) or 528(1.1) may not provide for the use of a name that is

  • (a) prohibited by an Act of Parliament;

  • (b) in the opinion of the Superintendent, deceptively misdescriptive;

  • (c) the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, any existing trademark, trade name or corporate name of a body corporate, except where

    • (i) the trademark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name, and

    • (ii) consent to the use of the trademark, trade name or corporate name is signified to the Superintendent in any manner that the Superintendent may require;

  • (d) the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, the known name under or by which any other entity carries on business or is identified; or

  • (e) reserved under section 43 for an existing or proposed bank or for an existing or proposed authorized foreign bank or under section 697 for an existing or proposed bank holding company.

• Marginal note:Name otherwise prohibited

  (2) An order made under subsection 524(1) or 528(1.1) may provide for the use of a name that includes a word referred to in section 47 of the Trust and Loan Companies Act.