R.S., c. 18 (3rd Supp.), Part I

Office of the Superintendent of Financial Institutions Act

1991, c. 45, s. 557

127. Paragraph (a) of the definition ``financial institution'' in section 3 of the Office of the Superintendent of Financial Institutions Act is replaced by the following:

      (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 ,

128. The Act is amended by adding the following after section 7:

Agreements

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.

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.

129. Section 22 of the Act is amended by adding the following after subsection (2):

Regulations

(2.1) The Governor in Council may make regulations prohibiting, limiting or restricting the disclosure by financial institutions of prescribed supervisory information.

130. (1) Subsection 23(1) of the Act is amended by adding the following after paragraph (b)

    (b.1) the average total assets in Canada during the immediately preceding calendar year of each authorized foreign bank;

(2) If section 23 of the Office of the Superintendent of Financial Institutions Act, as enacted by section 339 of An Act to amend certain laws relating to financial institutions, being chapter 15 of the Statutes of Canada, 1997, comes into force before subsection (1) comes into force, then, on the coming into force of that section 23, subsection (1) is repealed.

131. Section 23.1 of the Office of the Superintendent of Financial Institutions Act, as enacted by section 339 of An Act to amend certain laws relating to financial institutions, being chapter 15 of the Statutes of Canada, 1997, is amended by adding the following after subsection (3):

Penalty

(4) The Superintendent may assess a penalty of a prescribed amount against a financial institution or the administrator of a pension plan where that financial institution or administrator fails to

    (a) file a return or other information required by the Act of Parliament that governs the financial institution or the Pension Benefits Standards Act, 1985, as the case may be, at the interval set out in, or within the time required by, that Act; or

    (b) provide complete and accurate information with respect to the return or other information required by the Act of Parliament that governs the financial institution or the Pension Benefits Standards Act, 1985, as the case may be.

Continuing offence

(5) A failure to file a return or other information under paragraph (4)(a) is deemed to be a separate offence for each day during which the failure is continued.

1996, c. 6, sch.

Payment Clearing and Settlement Act

132. Subsection 8(3) of the English version of the Payment Clearing and Settlement Act is replaced by the following:

Rights, etc., not subject to stay

(3) The rights and remedies of a participant, a clearing house, a central counter-party or the Bank in respect of collateral granted to it as security for a payment or the performance of an obligation incurred in a designated clearing and settlement system may not be the subject of any stay provision or order affecting the ability of creditors to exercise rights and remedies with respect to the collateral.

133. (1) Subsection 13(1) of the Act is replaced by the following:

Termination

13. (1) Notwithstanding anything in any law relating to bankruptcy or insolvency or any order of a court made pursuant to an administration of a reorganization, arrangement or receivership involving insolvency, where a financial institution or the Bank is a party to a netting agreement, the financial institution or the Bank may terminate the agreement and determine a net termination value or net settlement amount in accordance with the provisions of the agreement and the party entitled to the net termination value or settlement amount is to be a creditor of the party owing the net termination value or net settlement amount for that value or amount.

(2) The portion of the definition ``netting agreement'' in subsection 13(2) of the Act before paragraph (a) is replaced by the following:

``netting agreement''
« accord de compensa-
tion »

``netting agreement'' means an agreement between two or more financial institutions or between the Bank and one or more financial institutions that is

134. Section 20 of the Act is replaced by the following:

No liability if in good faith

20. No action lies against Her Majesty, the Minister, the Bank, any officer, employee or director of the Bank or any person acting under the direction of the Governor of the Bank for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under this Act are intended or authorized to be executed or performed.

135. The Act is amended by adding the following after section 22:

Participation of authorized foreign banks

22.1 (1) An authorized foreign bank that is or wishes to be a participant in a designated clearing and settlement system shall, from time to time, provide the Governor of the Bank with any information regarding the application of foreign laws to the authorized foreign bank that the Governor considers necessary.

Prohibition or conditions

(2) If the Governor is of the opinion, on the basis of the information provided under subsection (1) or of any other information that the Governor considers relevant, that the authorized foreign bank's participation in the designated clearing and settlement system poses, or is likely to pose, a systemic risk or an unacceptable risk to the Bank in guaranteeing settlement of the authorized foreign bank's obligations, the Governor may prohibit it from being a participant or may require it to comply with the conditions with respect to its participation that the Governor considers necessary.

Powers of Governor of Bank

(3) The Governor's powers under subsection (2) are in addition to all other powers conferred on the Governor and the Bank by this Act.

Definitions

(4) The definitions in this subsection apply in this section.

``authorized foreign bank''
« banque étrangère autorisée »

``authorized foreign bank'' means an authorized foreign bank within the meaning of section 2 of the Bank Act.

``designated clearing and settlement system''
« système de compensation et de règlement »

``designated clearing and settlement system'' has the meaning assigned to that expression by section 3.

1991, c. 45

Trust and Loan Companies Act

136. (1) Paragraph (b) of the definition ``financial institution'' in section 2 of the Trust and Loan Companies Act is replaced by the following:

      (b) a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act ,

(2) Section 2 of the Act is amended by adding the following in alphabetical order:

``non-
WTO Member foreign institution''
« institution étrangère d'un non-membre de l'OMC »

``non-WTO Member foreign institution'' means a foreign institution that is not controlled by a WTO Member resident;

``WTO Member resident''
« résident d'un membre de l'OMC »

``WTO Member resident'' means a WTO Member resident within the meaning of section 11.1.

137. The Act is amended by adding the following after section 11:

WTO Member resident

11.1 (1) For the purposes of this Act, a WTO Member resident is

    (a) a natural person who is ordinarily resident in a country or territory that is a WTO Member as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act, other than Canada;

    (b) a body corporate, association, partnership or other organization that is incorporated, formed or otherwise organized in a country or territory that is a WTO Member, as defined in subsection 2(1) of the World Trade Organization Agreement Implementation Act, other than Canada, and that is controlled,

      (i) directly or indirectly, by one or more persons referred to in paragraph (a), or

      (ii) by a government of a WTO Member, whether federal, state or local, or an agency of one of those governments;

    (c) a trust established by one or more persons referred to in paragraph (a) or (b) or a trust in which one or more of those persons have more than 50 per cent of the beneficial interest; or

    (d) a body corporate, association, partnership or other organization that is controlled, directly or indirectly, by a trust referred to in paragraph (c).

Interpreta-
tion

(2) For the purposes of subsection (1),

    (a) a body corporate is controlled by one or more persons if

      (i) securities of the body corporate to which are attached more than 50 per cent of the votes that may be cast to elect directors of the body corporate are beneficially owned by the person or persons, and

      (ii) the votes attached to those securities are sufficient to elect a majority of the directors of the body corporate;

    (b) an association, partnership or other organization is controlled by one or more persons if

      (i) more than 50 per cent of the ownership interests, however designated, into which the association, partnership or other organization is divided are beneficially owned by the person or persons, and

      (ii) the person or persons are able to direct the business and affairs of the association, partnership or other organization;

    (c) a body corporate, association, partnership or other organization is controlled by one or more persons if the person or persons have, directly or indirectly, control in fact of the body corporate, association, partnership or other organization; and

    (d) a body corporate, association, partnership or other organization that controls another body corporate, association, partnership or other organization is deemed to control any body corporate, association, partnership or other organization that is controlled or deemed to be controlled by the other body corporate, association, partnership or other organization.

138. Paragraph 23(1)(b) of the Act is replaced by the following:

    (b) if the application is made by a non-WTO Member foreign institution , treatment as favourable for companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary.

139. (1) Subsection 237(1) of the Act is replaced by the following:

Sale by company

237. (1) A company may sell all or substantially all of its assets to a financial institution incorporated by or under an Act of Parliament or to an authorized foreign bank in respect of its business in Canada if the purchasing financial institution or authorized foreign bank assumes all or substantially all of the liabilities of the company.

(2) Subsection 237(3) of the Act is replaced by the following:

Considera-
tion

(3) Notwithstanding anything in this Act, the consideration for a sale referred to in subsection (1) may be cash or fully paid securities of the purchasing financial institution or authorized foreign bank or in part cash and in part fully paid securities of the purchasing financial institution or authorized foreign bank or any other consideration that is provided for in the sale agreement.

Meaning of ``authorized foreign bank''

(4) In this section, ``authorized foreign bank'' has the meaning assigned to that expression by section 2 of the Bank Act.

140. Subsection 388(2) of the Act is replaced by the following:

National treatment

(2) Where a transaction in respect of which subsection 375(1) or (2) applies would cause a company to become a subsidiary of a foreign institution that is engaged in the trust and loan business, that does not have any other company as its subsidiary and that is a non-WTO Member foreign institution , the Minister shall not approve the transaction unless the Minister is satisfied that treatment as favourable for companies to which this Act applies exists or will be provided in the jurisdiction in which the foreign institution principally carries on business, either directly or through a subsidiary.

1997, c. 15, s. 388(4)

141. (1) Paragraph 453(3)(c) of the Act is replaced by the following:

    (c) the company obtains the prior written approval of the Minister on the recommendation of the Superintendent in the case of

      (i) a body corporate referred to in paragraph (1)(n) that carries on one or more of the businesses or activities engaged in or carried on by bodies corporate referred to in paragraph (1)(d), (k) or (m), or

      (ii) a body corporate referred to in paragraph (1)(n) that carries on one or more of the businesses or activities engaged in or carried on by bodies corporate referred to in paragraph (1)(b), (c) or (l), if the company is permitted by regulations made under paragraph 459(a) to acquire or increase the substantial investment .

1997, c. 15, s. 388(5)

(2) Subsections 453(6) to (8) of the Act are replaced by the following:

Acquisition of legal control without control in fact

(6) A company shall not, without the prior written approval of the Minister, acquire control of a body corporate, as authorized by subparagraph (3)(a)(i) or (a.1)(i) , unless it also acquires control of the body corporate within the meaning of paragraph 3(1)(d).

Giving up of control in fact

(7) A company that acquires control of a body corporate, as authorized by subparagraph (3)(a)(i) or (a.1)(i) , shall not, without the prior written approval of the Minister, give up control of the body corporate within the meaning of paragraph 3(1)(d) while continuing to control the body corporate.

Giving up of control

(8) A company that controls a body corporate referred to in paragraph (3)(a) or (a.1) may give up control of the body corporate and keep a substantial investment in the body corporate if

    (a) the company is permitted to do so by regulations made under paragraph 459(b); and

    (b) the company has the prior written approval of the Superintendent.

142. The portion of section 461 of the Act before paragraph (a) is replaced by the following:

Lending limit: regulatory capital of $25 million or less

461. Subject to section 462 , a company with twenty-five million dollars or less of regulatory capital shall not, and shall not permit its prescribed subsidiaries to,

143. The portion of section 462 of the Act before paragraph (a) is replaced by the following:

Lending limit: regulatory capital over $25 million

462. A company with twenty-five million dollars or less of regulatory capital that is controlled by a financial institution with the equivalent of more than twenty-five million dollars in regulatory capital or a company with more than twenty-five million dollars of regulatory capital may