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| Guarantees
and
acceptances
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541.1 An authorized foreign bank that is not
subject to the restrictions and requirements
referred to in subsection 524(2) may, in
respect of its business in Canada, guarantee
any securities and accept any bills of exchange
that are issued by any person and intended by
the issuer or any party to be sold or traded.
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| Payment
clearing and
settlement
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542. Subject to section 22.1 of the Payment
Clearing and Settlement Act, an authorized
foreign bank may be a participant in a
designated clearing and settlement system
within the meaning of section 3 of that Act.
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| Networking
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543. (1) Subject to sections 540, 546 and
549, an authorized foreign bank may, in
Canada,
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(a) act as agent for any person in respect of
the provision of any service that is provided
by a financial institution or by a body
corporate in which a bank is permitted to
have a substantial investment pursuant to
section 468 and may enter into an
arrangement with any person in respect of
the provision of that service; or
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(b) refer any person to that financial
institution or body corporate.
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| Regulations
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(2) The Governor in Council may make
regulations respecting the disclosure of
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(a) the name of the principal for whom an
authorized foreign bank is acting as agent
pursuant to subsection (1); and
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(b) whether any commission is being earned
by an authorized foreign bank when acting
as agent pursuant to subsection (1).
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| Restriction on
fiduciary
activities
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544. No authorized foreign bank shall act in
Canada as
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(a) an executor, administrator or official
guardian or a guardian, tutor, curator,
judicial adviser or committee of a mentally
incompetent person; or
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(b) a trustee for a trust.
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| Deposits that
fall below
$150,000
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545. (1) An authorized foreign bank shall,
in respect of its business in Canada, ensure
that, on each day that is at least thirty days
after the date of the order under subsection
534(1) made in respect of it,
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A/B 0.01
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where
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A is the sum of all amounts each of which is
the sum of all the deposits held by the
authorized foreign bank at the end of a day in
the preceding thirty days each of which
deposits is less than $150,000 and payable in
Canada; and
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B is the sum of all amounts each of which is
the sum of all deposits held by the authorized
foreign bank at the end of a day in those
preceding thirty days and payable in Canada.
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| Exchange rate
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(2) For the purpose of subsection (1), the
rate of exchange that shall be applied on any
day in determining the amount in Canadian
dollars of a deposit in a currency of a country
other than Canada shall be determined in
accordance with any regulations that may be
made.
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| Meaning of
``deposit''
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(3) For the purpose of subsection (1),
``deposit'' has the meaning that would be
given to it by the schedule to the Canada
Deposit Insurance Corporation Act for the
purposes of deposit insurance if that schedule
were read without reference to subsections
2(2), (5) and (6) of that schedule.
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| Notice before
opening
account
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(4) Before an authorized foreign bank opens
a deposit account in Canada, the bank shall, in
the prescribed manner, give the person
requesting the opening of the account
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(a) a notice in writing that the deposit will
not be insured by the Canada Deposit
Insurance Corporation; and
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(b) any other information that may be
prescribed.
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| Other notice
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(5) An authorized foreign bank shall, in
accordance with any regulations that may be
made,
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(a) post notices in its branches in Canada to
inform the public that deposits with the
authorized foreign bank are not insured by
the Canada Deposit Insurance Corporation;
and
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(b) include in its advertisements notices to
inform the public that deposits with the
authorized foreign bank are not insured by
the Canada Deposit Insurance Corporation.
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| Regulations
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(6) The Governor in Council may make
regulations
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(a) respecting the determination of rates of
exchange referred to in subsection (2);
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(b) prescribing the manner in which notices
referred to in subsection (4) are to be given
and the additional information to be
contained in the notices; and
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(c) respecting notices referred to in
subsection (5).
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| Deposits less
than $150,000
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546. (1) An authorized foreign bank that is
not subject to the restrictions and
requirements referred to in subsection 524(2)
may not, in respect of its business in Canada,
act as agent for any person in the taking of a
deposit that is less than $150,000 and payable
in Canada.
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| Meaning of
``deposit''
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(2) In this section, ``deposit'' has the
meaning assigned to that term by subsection
545(3).
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| Shared
premises
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547. (1) No authorized foreign bank shall
carry on business in Canada on premises that
are shared with those of a member institution,
within the meaning of section 2 of the Canada
Deposit Insurance Corporation Act, that is
affiliated with the authorized foreign bank.
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| Limitation
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(2) Subsection (1) only applies in respect of
premises or any portion of premises on which
both the authorized foreign bank and the
member institution carry on business with the
public and to which the public has access.
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| Adjacent
premises
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(3) No authorized foreign bank shall carry
on business in Canada on premises that are
adjacent to a branch or office of a member
institution, within the meaning of section 2 of
the Canada Deposit Insurance Corporation
Act, that is affiliated with the authorized
foreign bank, unless the authorized foreign
bank clearly indicates to its customers that its
business and the premises on which they are
carried on are separate and distinct from the
business and premises of the affiliated
member institution.
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| Restriction on
securities
activities
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548. An authorized foreign bank shall not
deal in Canada in securities to the extent
prohibited or restricted by any regulations that
the Governor in Council may make for the
purposes of this section.
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| Restriction on
insurance
business
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549. (1) An authorized foreign bank shall
not undertake in Canada the business of
insurance except to the extent permitted by
this Act or the regulations.
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| Restriction on
acting as
agent
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(2) An authorized foreign bank shall not act
in Canada as agent for any person in the
placing of insurance and shall not lease or
provide space in any branch in Canada of the
authorized foreign bank to any person
engaged in the placing of insurance.
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| Regulations
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(3) The Governor in Council may make
regulations respecting the matters referred to
in subsection (1) and regulations respecting
relations between authorized foreign banks
and
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(a) entities that undertake the business of
insurance; or
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(b) insurance agents or insurance brokers.
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| Saving
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(4) Nothing in this section precludes an
authorized foreign bank from
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(a) requiring insurance to be placed by a
borrower for the security of the authorized
foreign bank; or
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(b) obtaining group insurance for its
employees.
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| Annuities
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(5) For the purposes of this section, the
business of insurance includes the issuance of
an annuity where the liability on the insurance
is contingent on the death of a person.
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| Restriction on
leasing
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550. An authorized foreign bank shall not
engage in Canada in any personal property
leasing activity in which a financial leasing
corporation within the meaning of subsection
464(1) is not permitted to engage.
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| Restriction on
residential
mortgages
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551. (1) An authorized foreign bank shall
not make a loan in Canada on the security of
residential property in Canada for the purpose
of purchasing, renovating or improving that
property, or refinance a loan for that purpose,
if the amount of the loan, together with the
amount outstanding of any mortgage having
an equal or prior claim against the property,
would exceed 75 per cent of the value of the
property at the time of the loan.
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| Exception
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(2) Subsection (1) does not apply in respect
of
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(a) a loan made or guaranteed under the
National Housing Act or any other Act of
Parliament by or under which a different
limit on the value of property on the security
of which the authorized foreign bank may
make a loan is established;
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(b) a loan if repayment of the amount of the
loan that exceeds the maximum amount set
out in subsection (1) is guaranteed or
insured by a government agency or a private
insurer approved by the Superintendent;
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(c) the acquisition by the authorized foreign
bank from an entity of securities issued or
guaranteed by the entity that are secured on
any residential property, whether in favour
of a trustee or otherwise, or the making of
a loan by the authorized foreign bank to the
entity against the issue of those securities;
or
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(d) a loan secured by a mortgage where
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(i) the mortgage is taken back by the
authorized foreign bank on a property
disposed of by it, including where the
disposition is by way of a realization of a
security interest, and
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(ii) the mortgage secures payment of an
amount payable to the authorized foreign
bank for the property.
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| Restriction on
security
interests
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552. (1) Subject to subsection (3), an
authorized foreign bank shall not create a
security interest in any of the assets in respect
of its business in Canada in order to secure an
obligation of the authorized foreign bank,
unless
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(a) the obligation is to the Bank of Canada;
or
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(b) the Superintendent has approved in
writing the creation of the security interest.
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| Encumbered
property
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(2) An authorized foreign bank shall notify
the Superintendent in writing of any
beneficial interest in real and personal
property acquired by it in respect of its
business in Canada, other than by way of
realization, that is subject to a security
interest.
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| Exceptions
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(3) Subsection (1) does not apply in respect
of a security interest created on
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(a) any class of personal property that the
Superintendent may, by order, designate; or
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(b) property having an aggregate value that
is less than any amount that the
Superintendent may, by order, specify.
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| Restriction on
receivers
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553. An authorized foreign bank shall not,
in respect of its business in Canada, grant to a
person the right to appoint a receiver or a
receiver and manager of the property or of the
business of the authorized foreign bank.
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| Restriction on
partnerships
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553.1 (1) Except by order of the
Superintendent, an authorized foreign bank
shall not, in respect of its business in Canada,
be a general partner in a limited partnership or
a partner in a general partnership.
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| Meaning of
``general
partnership''
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(2) For the purposes of subsection (1),
``general partnership'' means any partnership
other than a limited partnership.
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| Definition of
``non-NAFTA
country
authorized
foreign bank''
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554. (1) In this section, ``non-NAFTA
country authorized foreign bank'' means an
authorized foreign bank that is not controlled
by a NAFTA country resident.
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| Limitation on
branches in
Canada of
non-NAFTA
country
authorized
foreign bank
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(2) No non-NAFTA country authorized
foreign bank shall have any branch in Canada,
other than its principal office and one branch,
without the approval of the Minister.
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| Special
security
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555. Sections 425 to 436, as they exist from
time to time, apply, with any modifications
that the circumstances require, in respect of
the carrying on of business in Canada by an
authorized foreign bank as if a reference to
``bank'' in any of those provisions were a
reference to ``authorized foreign bank''.
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| Deposit
acceptance
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556. (1) Subject to this Part, an authorized
foreign bank may, without the intervention of
any other person,
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(a) accept a deposit from any person
whether or not the person is qualified by law
to enter into contracts; and
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(b) pay all or part of the principal of the
deposit and all or part of the interest on it to
or to the order of that person.
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| Exception
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(2) Paragraph (1)(b) does not apply if,
before payment, the money deposited in the
authorized foreign bank pursuant to paragraph
(1)(a) is claimed by some other person
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(a) in any action or proceeding to which the
authorized foreign bank is a party and in
respect of which service of a writ or other
process originating that action or
proceeding has been made on the
authorized foreign bank, or
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(b) in any other action or proceeding
pursuant to which an injunction or order
made by the court requiring the authorized
foreign bank not to make payment of that
money or make payment of it to some
person other than the depositor has been
served on the authorized foreign bank,
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and, if a claim is made, the deposited money
may be paid to the depositor with the consent
of the claimant, or to the claimant with the
consent of the depositor.
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| Execution of
trust
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(3) An authorized foreign bank is not bound
to see to the execution of any trust, whether
express or arising by operation of law, to
which a deposit made under the authority of
this Act is subject.
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