Office of the Superintendent of Financial Institutions Act (R.S.C., 1985, c. 18 (3rd Supp.), Part I)

Short Title

Marginal note:Short title

2 This Part may be cited as the Office of the Superintendent of Financial Institutions Act.

Interpretation

Marginal note:Interpretation

3 In this Part,

bank holding company

bank holding company means a bank holding company as defined in section 2 of the Bank Act; (société de portefeuille bancaire)

Deputy Superintendent

Deputy Superintendent means a Deputy Superintendent of Financial Institutions appointed pursuant to section 8; (surintendant adjoint)

financial institution

financial institution means

• (a) a bank within the meaning of section 2 of the Bank Act,

• (a.1) an authorized foreign bank within the meaning of section 2 of the Bank Act,

• (b) a company to which the Trust and Loan Companies Act applies,

• (c) an association to which the Cooperative Credit Associations Act applies,

• (d) a company, society, foreign company or provincial company to which the Insurance Companies Act applies, and

• (e) Green Shield Canada; (institution financière)

• (f) [Repealed, 1996, c. 6, s. 104] 

insurance holding company

insurance holding company means an insurance holding company as defined in subsection 2(1) of the Insurance Companies Act; (société de portefeuille d’assurances)

Minister

Minister means the Minister of Finance; (ministre)

Office

Office means the Office of the Superintendent of Financial Institutions established pursuant to section 4; (Bureau)

pension plan

pension plan has the same meaning as in subsection 2(1) of the Pension Benefits Standards Act, 1985 or has the meaning assigned by the definition pooled registered pension plan in subsection 2(1) of the Pooled Registered Pension Plans Act, as the case may be; (régime de pension)

Superintendent

Superintendent means the Superintendent of Financial Institutions appointed pursuant to subsection 5(1). (surintendant)

Purpose of Act

Marginal note:To ensure regulation of institutions and pension plans

3.1 The purpose of this Act is to ensure that financial institutions and pension plans are regulated by an office of the Government of Canada so as to contribute to public confidence in the Canadian financial system.

Establishment of the Office

Marginal note:Office established

• 4 (1) There is hereby established an office of the Government of Canada called the Office of the Superintendent of Financial Institutions over which the Minister shall preside and for which the Minister shall be responsible.

• Marginal note:Objects of Office — financial institutions

  (2) The objects of the Office, in respect of financial institutions, are

  • (a) to supervise financial institutions in order to determine whether they are in sound financial condition and are complying with their governing statute law and supervisory requirements under that law;

  • (a.1) to supervise financial institutions in order to determine whether they have adequate policies and procedures to protect themselves against threats to their integrity or security, including foreign interference;

  • (b) to promptly advise the management and board of directors of a financial institution in the event the institution is not in sound financial condition or is not complying with its governing statute law or supervisory requirements under that law and, in such a case, to take, or require the management or board to take, the necessary corrective measures or series of measures to deal with the situation without delay;

  • (b.1) to promptly advise the management and board of directors of a financial institution in the event the institution does not have adequate policies and procedures to protect itself against threats to its integrity or security and, in such a case, to take, or require the management or board to take, the necessary corrective measures or series of measures to deal with the situation without delay;

  • (c) to promote the adoption by management and boards of directors of financial institutions of policies and procedures designed to control and manage risk; and

  • (d) to monitor and evaluate system-wide or sectoral events or issues that may have a negative impact on the financial condition of financial institutions.

• Marginal note:Objects of Office — pension plans

  (2.1) The objects of the Office, in respect of pension plans, are

  • (a) to supervise pension plans to determine whether they meet the minimum funding requirements and are complying with the other requirements of the Pension Benefits Standards Act, 1985 and the Pooled Registered Pension Plans Act and their regulations and supervisory requirements under that legislation;

  • (b) to promptly advise the administrator of a pension plan in the event that the plan is not meeting the minimum funding requirements or is not complying with other requirements of the Pension Benefits Standards Act, 1985 or the Pooled Registered Pension Plans Act or their regulations or supervisory requirements under that legislation and, in such a case, to take, or require the administrator to take, the necessary corrective measures or series of measures to deal with the situation in an expeditious manner; and

  • (c) to promote the adoption by administrators of pension plans of policies and procedures designed to control and manage risk.

• Marginal note:Protection of depositors, etc.

  (3) In pursuing its objects, the Office shall strive

  • (a) in respect of financial institutions, to protect the rights and interests of depositors, policyholders and creditors of financial institutions, having due regard to the need to allow financial institutions to compete effectively and take reasonable risks; and

  • (b) in respect of pension plans, to protect the rights and interests of members of pension plans, former members and any other persons who are entitled to pension benefits or refunds under pension plans.

• Marginal note:Factors affecting financial institutions

  (4) Notwithstanding that the regulation and supervision of financial institutions by the Office and the Superintendent can reduce the risk that financial institutions will fail, regulation and supervision must be carried out having regard to the fact that boards of directors are responsible for the management of financial institutions, financial institutions carry on business in a competitive environment that necessitates the management of risk and financial institutions can experience financial difficulties that can lead to their failure.

• Marginal note:Factors affecting pension plans

  (5) Notwithstanding that the regulation and supervision of pension plans by the Office and the Superintendent can reduce the risk that pension plans will fail to pay the expected benefits, regulation and supervision must be carried out having regard to the fact that administrators of pension plans are responsible for the management of the pension plans and that pension plans can experience financial and funding difficulties that can result in the reduction of those benefits.

Superintendent of Financial Institutions

Marginal note:Appointment of Superintendent

• 5 (1) The Governor in Council shall appoint an officer called the Superintendent of Financial Institutions to be the deputy head of the Office.

• Marginal note:Tenure of office and removal

  (2) The Superintendent holds office during good behaviour for a term of seven years, but may be removed for cause by the Governor in Council.

• Marginal note:Tabling reasons

  (3) Where the Superintendent is removed from office, the order in council providing for the removal and the documents relating thereto shall be laid before each House of Parliament not later than the fifteenth sitting day of that House following the day that the order is issued.

• Marginal note:Further terms

  (4) The Superintendent, on the expiration of any term of office, is eligible to be re-appointed for a further term of office.

• Marginal note:Absence or incapacity

  (5) In the event of the absence or incapacity of the Superintendent, or if the office of Superintendent is vacant, the Governor in Council may appoint a qualified person to hold office instead of the Superintendent for a term not exceeding six months, and that person shall, while holding that office, have all of the powers, duties and functions of the Superintendent under this Part or any other Act of Parliament.

• Marginal note:Further terms

  (6) A person appointed pursuant to subsection (5), on the expiration of any term of office, is eligible to be re-appointed for a further term of office.

Powers, Duties and Functions of the Superintendent

Marginal note:Duties, powers and functions of the Superintendent

• 6 (1) The Superintendent has the powers, duties and functions assigned to the Superintendent by the Acts referred to in the schedule to this Part and shall examine into and report to the Minister from time to time on all matters connected with the administration of the provisions of those Acts except those that are consumer provisions as defined in section 2 of the Financial Consumer Agency of Canada Act.

• Marginal note:Securities activities

  (2) Where, pursuant to the Act that applies to it, a financial institution or any of its officers or employees engages in

  • (a) underwriting securities,

  • (b) trading in securities, or

  • (c) providing advisory or management services in respect of securities,

  the Superintendent shall examine and inquire into the carrying out of those activities, and report to the Minister from time to time on all matters connected therewith.

• Marginal note:Superintendent to administer regulations

  (3) The Superintendent is responsible for the administration of such regulations as the Governor in Council may make respecting the carrying out of the activities referred to in subsection (2) by financial institutions and their officers and employees, and every financial institution and every officer and employee thereof that carries out any such activity shall do so subject to those regulations.

• Marginal note:Regulation may provide for discretion

  (4) A regulation made pursuant to subsection (3) may provide that the Superintendent may, by order, determine such matters or exercise such discretion as the regulation may specify in relation to the carrying out of the activities referred to in subsection (2) by a financial institution or any of its officers and employees.

• Marginal note:Interpretation

  (5) For the purposes of subsection (2), the Act that applies to a financial institution is the Act set out in respect thereof in the definition “financial institution” in section 3.

Marginal note:Duties and functions generally

• 7 (1) The Superintendent shall engage exclusively in the duties and functions of the Superintendent under section 6 and the duties and functions of the Superintendent as the deputy head of the Office.

• Marginal note:Other duties

  (2) Notwithstanding subsection (1), the Superintendent may hold any other office under Her Majesty or perform any other duties for Her Majesty, but not for reward.

Agreements

Marginal note:Agreements with provinces

• 7.1 (1) The Minister may, with the approval of the Governor in Council, enter into agreements with the appropriate authority of a province

  • (a) with respect to the administration, application and enforcement of provincial legislation in respect of trust, loan or insurance companies incorporated or regulated by or under an Act of the legislature of the province;

  • (b) in order to authorize the Superintendent to exercise or perform the powers, duties and functions on behalf of the appropriate authority of the province, that the Minister may determine, in respect of trust, loan or insurance companies incorporated or regulated by or under an Act of the legislature of the province; and

  • (c) in order to

    • (i) make applicable the Trust and Loan Companies Act, the Insurance Companies Act or this Act, or any provisions of these Acts, and the regulations made under any of these Acts, with the modifications that the Minister considers necessary, in respect of trust, loan or insurance companies that are incorporated or regulated by or under an Act of the legislature of the province, and

    • (ii) limit the application of provincial legislation in respect of trust, loan or insurance companies that are incorporated or regulated by an Act of the legislature of the province.

• Marginal note:Notice of agreement

  (2) The Minister shall cause a notice of every agreement entered into under subsection (1) to be published in the Canada Gazette.

Deputy Superintendents

Marginal note:Appointment of Deputy Superintendents

8 The Superintendent may appoint one or more officers each to be called a Deputy Superintendent of Financial Institutions.

Marginal note:Deputy Superintendent to act under Superintendent

9 Every Deputy Superintendent shall act under the instructions of the Superintendent.

Exercise of Powers, Duties and Functions

Marginal note:Exercise by personnel

10 Except as otherwise provided by the Superintendent and subject to any terms and conditions that may be specified by the Superintendent, a person who is an officer or employee of the Office may exercise any of the powers and perform any of the duties and functions of the Superintendent under this Act if the person is appointed to serve in the Office in a capacity appropriate to the exercise of the power or performance of the duty or function.