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

Meaning of person

• 23.1 (1) For the purpose of this section, person means a natural person, a personal representative, a body corporate, a trust, a partnership, a fund, an unincorporated association or organization, Her Majesty in right of Canada or of a province, an agency of Her Majesty in either of those rights, the government of a foreign country or of a political subdivision of a foreign country, an agency of the government of a foreign country or an agency of the government of a political subdivision of a foreign country.

• Marginal note:Assessment of particular expenses

  (2) The Superintendent may assess against a person a prescribed charge and applicable disbursements for any service provided by or on behalf of the Superintendent for the person’s benefit or for the benefit of a group of persons of which the person is a member.

• Marginal note:Interim assessment

  (3) The Superintendent may, during each fiscal year, prepare an interim assessment against any person towards the amount to be assessed against the person under subsection (2).

• (4) and (5) [Repealed, 2001, c. 9, s. 474]

Marginal note:Assessment is binding

• 23.2 (1) Every assessment and interim assessment made under section 23 or 23.1 is final and conclusive and binding on the person against whom it is made.

• Marginal note:Recovery

  (2) Every assessment and interim assessment made under section 23 or 23.1 constitutes a debt due to Her Majesty and is immediately payable and may be recovered as a debt in any court of competent jurisdiction.

• Marginal note:Interest

  (3) Interest may be charged on the unpaid amount of an assessment or interim assessment under section 23 or 23.1 at a rate equal to the rate prescribed under the Income Tax Act for amounts payable by the Minister of National Revenue as refunds of overpayments of tax under that Act in effect from time to time plus two per cent.

23.3 [Repealed, 2001, c. 9, s. 477]

Administrative Monetary Penalties

Interpretation

Marginal note:Definitions

• 24 (1) The following definitions apply in this section and in sections 25 to 37.2.

  entity

  entity means an entity as defined in section 2 of the Bank Act. (entité)

  financial institutions Act

  financial institutions Act means the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Pension Benefits Standards Act, 1985, the Pooled Registered Pension Plans Act and the Trust and Loan Companies Act. (loi sur les institutions financières)

  penalty

  penalty means an administrative monetary penalty. (pénalité)

  person

  person means a natural person or an entity. (Version anglaise seulement)

• Marginal note:Non-application

  (2) This section and sections 25 to 37 do not apply in respect of consumer provisions as defined in section 2 of the Financial Consumer Agency of Canada Act.

Violations

Marginal note:Regulations

• 25 (1) The Governor in Council may make regulations

  • (a) designating, as a violation that may be proceeded with under sections 26 to 37, the contravention of a specified provision of a financial institutions Act or of a specified provision of a regulation made under one or the non-compliance with

    • (i) an order made by the Superintendent under a financial institutions Act,

    • (ii) a direction made under a financial institutions Act to cease or refrain from committing an act or pursuing a course of conduct that is an unsafe or unsound practice, or to perform a remedial act,

    • (iii) terms and conditions imposed by the Superintendent or an undertaking given to the Superintendent under a financial institutions Act, or

    • (iv) a prudential agreement entered into with the Superintendent under a financial institutions Act;

  • (b) classifying each violation as a minor violation, a serious violation or a very serious violation;

  • (c) fixing, in accordance with subsection (2), a penalty, or a range of penalties, in respect of any violation;

  • (d) respecting the service of documents required or authorized to be served under sections 26 to 37, including the manner and proof of service and the circumstances under which documents are deemed to be served; and

  • (e) generally for carrying out the purposes and provisions of section 24, this section and sections 26 to 37.

• Marginal note:Maximum penalties

  (2) The maximum penalty for a violation is

  • (a) in the case of a violation that is committed by a natural person, $10,000 for a minor violation, $50,000 for a serious violation and $100,000 for a very serious violation; and

  • (b) in the case of a violation that is committed by an entity, $25,000 for a minor violation, $100,000 for a serious violation and $500,000 for a very serious violation.

Marginal note:Criteria for penalty

26 Except if a penalty is fixed under paragraph 25(1)(c), the amount of a penalty shall, in each case, be determined taking into account

• (a) the degree of intention or negligence on the part of the person who committed the violation;

• (b) the harm done by the violation;

• (c) the history of the person who committed the violation with respect to any prior violation or conviction under a financial institutions Act within the five-year period immediately before the violation; and

• (d) any other criteria that may be prescribed by regulation.

Marginal note:How act or omission may be proceeded with

27 If a contravention or non-compliance that is designated under paragraph 25(1)(a) can be proceeded with either as a violation or as an offence, proceeding in one manner precludes proceeding in the other.

Proceedings

Marginal note:Commission of violation

• 28 (1) Every contravention or non-compliance that is designated under paragraph 25(1)(a) constitutes a violation and the person who commits the violation is liable to a penalty determined in accordance with sections 25 and 26.

• Marginal note:Notice of violation

  (2) If the Superintendent believes on reasonable grounds that a person has committed a violation, he or she may issue, and shall cause to be served on the person, a notice of violation.

• Marginal note:Contents of notice

  (3) A notice of violation shall name the person believed to have committed a violation, identify the violation and set out

  • (a) the penalty that the Superintendent proposes to impose;

  • (b) the right of the person, within 30 days after the notice is served or within any longer period that the Superintendent specifies, to pay the penalty or to make representations to the Superintendent with respect to the violation and the proposed penalty, and the manner for doing so; and

  • (c) the fact that, if the person does not pay the penalty or make representations in accordance with the notice, the person will be deemed to have committed the violation and the Superintendent may impose a penalty in respect of it.

Determination of Responsibility and Penalty

Marginal note:Payment of penalty

• 29 (1) If the person pays the penalty proposed in the notice of violation, the person is deemed to have committed the violation and proceedings in respect of it are ended.

• Marginal note:Representations to Superintendent

  (2) If the person makes representations in accordance with the notice, the Superintendent shall decide, on a balance of probabilities, whether the person committed the violation and, if so, may, subject to any regulations made under paragraph 25(1)(c), impose the penalty proposed, a lesser penalty or no penalty.

• Marginal note:Failure to pay or make representations

  (3) A person who neither pays the penalty nor makes representations in accordance with the notice is deemed to have committed the violation and the Superintendent may, subject to any regulations made under paragraph 25(1)(c), impose the penalty proposed, a lesser penalty or no penalty.

• Marginal note:Notice of decision and right of appeal

  (4) The Superintendent shall cause notice of any decision made under subsection (2) or (3) to be issued and served on the person together with, in the case of a serious violation or very serious violation, notice of the right of appeal under section 30.

Appeal to Federal Court

Marginal note:Right of appeal

• 30 (1) A person on whom a notice under subsection 29(4) in respect of a serious violation or very serious violation is served may, within 30 days after the notice is served, or within any longer period that the Court allows, appeal the decision to the Federal Court.

• Marginal note:Court to take precautions against disclosing

  (2) In an appeal, the Court shall take every reasonable precaution, including, when appropriate, conducting hearings in private, to avoid the disclosure by the Court or any person of confidential information referred to in subsection 22(1).

• Marginal note:Powers of Court

  (3) On an appeal, the Court may confirm, set aside or, subject to any regulations made under paragraph 25(1)(c), vary the decision of the Superintendent.

Enforcement

Marginal note:Debts to Her Majesty

• 31 (1) A penalty constitutes a debt due to Her Majesty in right of Canada and may be recovered in the Federal Court.

• Marginal note:Time limit

  (2) No proceedings to recover a debt referred to in subsection (1) may be commenced later than five years after the debt became payable.

• Marginal note:Proceeds payable to Receiver General

  (3) A penalty paid or recovered under sections 25 to 30, this section and sections 32 to 37 is payable to and shall be remitted to the Receiver General.

Marginal note:Certificate

• 32 (1) The unpaid amount of any debt referred to in subsection 31(1) may be certified by the Superintendent.

• Marginal note:Registration in Federal Court

  (2) Registration in the Federal Court of a certificate made under subsection (1) has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs.

Rules about Violations

Marginal note:Violations not offences

33 For greater certainty, a violation is not an offence and, accordingly, section 126 of the Criminal Code does not apply in respect of one.

Marginal note:Due diligence available

• 34 (1) Due diligence is a defence in a proceeding in relation to a violation.

• Marginal note:Common law principles

  (2) Every rule and principle of the common law that renders a circumstance a justification or an excuse in relation to a charge for an offence under a financial institutions Act applies in respect of a violation to the extent that it is not inconsistent with this Act.

Marginal note:Continuing violation

35 A minor violation that is continued on more than one day constitutes a separate violation for each day during which it is continued.

General Provisions

Marginal note:Evidence

36 In a proceeding in respect of a violation or a prosecution for an offence, a notice purporting to be issued under subsection 28(2) or 29(4) or a certificate purporting to be made under subsection 32(1) is admissible in evidence without proof of the signature or official character of the person appearing to have signed it.

Marginal note:Time limit

• 37 (1) No proceedings in respect of a violation may be commenced later than six months after the subject-matter of the proceedings became known to the Superintendent, in the case of a minor violation, or two years after the subject-matter of the proceedings became known to the Superintendent, in the case of a serious violation or a very serious violation.

• Marginal note:Certificate of Superintendent

  (2) A document appearing to have been issued by the Superintendent, certifying the day on which the subject-matter of any proceedings became known to the Superintendent, is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it.

• Marginal note:No use of privileged information

  (3) The Superintendent shall not use privileged information as evidence in a proceeding in respect of a violation if the privileged information was disclosed to the Superintendent by

  • (a) a financial institution, bank holding company or insurance holding company; or

  • (b) a person who controls, or an entity that is affiliated with, an entity referred to in paragraph (a).

• Marginal note:Definition of privileged information

  (4) In subsection (3), privileged information means information that is subject to a privilege under the law of evidence, solicitor-client privilege or the professional secrecy of advocates and notaries or to litigation privilege.