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| Meaning of
``eligible
votes''
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156.09 (1) In this section, ``eligible votes''
means the total number of votes that may be
cast by or on behalf of shareholders on a vote
of shareholders or a vote of holders of a class
or series of shares, as the case may be, in
respect of any particular matter, calculated
without regard to subsection (2).
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| Restriction
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(2) At a meeting of shareholders of a bank
with equity of five billion dollars or more, no
person and no entity controlled by any person
may, in respect of any vote of shareholders or
holders of any class or series of shares of the
bank, cast votes in respect of any shares
beneficially owned by the person or the entity
that are, in aggregate, more than 20 per cent of
the eligible votes that may be cast in respect of
that vote.
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| Proxyholders
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(3) No person who is a proxyholder for a
person or for an entity controlled by a person
may cast votes to which the proxy relates that
the person or entity may not cast by reason of
subsection (2).
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| Exception
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(4) Subsections (2) and (3) do not apply in
respect of votes cast by or on behalf of any
entity that controls the bank or any entity that
is controlled by an entity that controls the
bank.
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| Exception
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(5) Subsection (2) does not apply in respect
of a vote held under section 218.
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| Validity of
vote
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(6) A vote in respect of a particular matter
is not invalid merely because a person voted
contrary to subsection (2) or (3).
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| Disposition of
shareholdings
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(7) If, with respect to any bank, a person
contravenes subsection (2) or (3), the Minister
may, by order, direct the shareholder of the
shares to which the contravention relates or
any person controlled by that shareholder to
dispose of any number of shares of the bank
beneficially owned by any of those persons
that the Minister specifies in the order, within
the time specified in the order and in the
proportion, if any, as between the shareholder
and the persons controlled by that shareholder
that is specified in the order.
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| Restriction on
voting rights
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(8) If the Minister makes an order under
subsection (7), the person to whom the order
relates may not, in person or by proxy,
exercise any voting rights that are attached to
shares of the bank beneficially owned by the
person.
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| Subsection (8)
ceases to
apply
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(9) Subsection (8) ceases to apply in respect
of a person when the shares to which the order
relates have been disposed of.
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| Reliance on
number in
notice
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(10) For the purpose of this section, a person
is entitled to rely on the number of eligible
votes set out in a notice of a meeting under
subsection 138(1.1).
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| Designation
of persons
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(11) For the purpose of this section, the
Minister may, with respect to a particular
bank, designate two or more persons who are
parties to an agreement, commitment or
understanding referred to in section 9 to be a
single person.
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66. Subsection 159(2) of the Act is
replaced by the following:
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| Residency
requirement
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(2) At least one half of the directors of a
bank that is a subsidiary of a foreign bank and
at least two thirds of the directors of any other
bank must be, at the time of each director's
election or appointment, resident Canadians.
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| 1997, c. 15,
s. 12
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67. Paragraphs 160(e) and (f) of the Act
are replaced by the following:
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(e) a person who is prohibited by section
392 or 401.3 or subsection 156.09(8) from
exercising voting rights attached to shares
of the bank;
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(f) a person who is an officer, director or full
time employee of an entity that is prohibited
by section 392 or 401.3 or subsection
156.09(8) from exercising voting rights
attached to shares of the bank;
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68. The Act is amended by adding the
following after section 160:
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| Exception
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160.1 Paragraph 160(g) does not apply to a
person if
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(a) the person is employed in a department
or agency of the Government of Canada that
is not involved in the regulation or
supervision of financial institutions;
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(b) the person's duties do not involve
financial institutions; and
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(c) the bank is controlled by a local
cooperative credit society, as defined in
section 2 of the Cooperative Credit
Associations Act, in which the following
persons, in aggregate, hold more than 50 per
cent or, if a percentage has been prescribed
for the purpose of this paragraph, the
prescribed percentage, of the ownership
interests in the local cooperative credit
society, namely,
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(i) employees of Her Majesty in right of
Canada or of a province,
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(ii) former employees of Her Majesty in
right of Canada or of a province,
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(iii) the spouse of a person referred to in
subparagraph (i) or (ii), and
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(iv) a child who is less than eighteen
years of age of a person referred to in
subparagraph (i) or (ii).
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69. Subsection 163(2) of the Act, as
amended by section 13 of An Act to amend
certain laws relating to financial institutions,
being chapter 15 of the Statutes of Canada,
1997, is repealed.
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70. Section 168 of the Act is amended by
adding the following after subsection (3):
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| Exception
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(3.1) Subsection (2) does not apply to a
widely held bank with equity of five billion
dollars or more or to a bank in respect of which
subsection 378(1) applies.
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71. Subsection 172(1) of the Act is
amended by striking out the word ``or'' at
the end of paragraph (c), by adding the
word ``or'' at the end of paragraph (d) and
by adding the following after paragraph
(d):
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(e) when the director is removed from office
under section 647 or 647.1.
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72. Paragraph 183(1)(a) of the Act is
replaced by the following:
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(a) in the case of a bank that is a subsidiary
of a foreign bank, at least one half of the
directors present are resident Canadians; or
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73. The Act is amended by adding the
following after section 183:
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| Presence of
unaffiliated
director
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183.1 (1) The directors of a bank shall not
transact business at a meeting of directors
unless at least one of the directors who is not
affiliated with the bank is present.
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| Exception
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(2) Despite subsection (1), the directors of
a bank may transact business at a meeting of
directors if a director who is not affiliated with
the bank and who is not able to be present
approves, in writing or by telephonic,
electronic or other communications facilities,
the business transacted at the meeting.
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| 1997, c. 15,
s. 23(1)
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74. Paragraph 195(3)(b) of the Act is
replaced by the following:
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(b) review those procedures and their
effectiveness in ensuring that the bank is
complying with Part XI;
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(b.1) if a widely held bank holding
company or a widely held insurance
holding company has a significant interest
in any class of shares of the bank, establish
policies for entering into transactions
referred to in section 495.1; and
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75. The portion of section 211 of the Act
before paragraph (a) is replaced by the
following:
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| Reliance on
statement
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211. A director, an officer or an employee of
a bank is not liable under subsection 158(1) or
(2), section 207 or 210 or subsection 506(1) if
the director, officer or employee relies in good
faith on
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76. Section 215 of the Act is replaced by
the following:
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| Incorporating
instrument
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215. On the application of a bank duly
authorized by special resolution, the Minister
may approve a proposal to add, change or
remove any provision that is permitted by this
Act to be set out in the bank's incorporating
instrument.
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77. Subsection 216(1) of the Act is
replaced by the following:
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| Letters patent
to amend
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216. (1) On receipt of an application
referred to in section 215, the Minister may
issue letters patent to effect the proposal.
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78. (1) Subsection 217(1) of the Act is
amended by striking out the word ``or'' at
the end of paragraph (i) and by adding the
following after paragraph (i):
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(i.1) change the name of the bank; or
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(2) Subsection 217(3) of the Act is
replaced by the following:
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| Effective date
of by-law
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(3) A by-law, or an amendment to or a
repeal of a by-law, made under subsection (1)
is not effective until it is confirmed or
confirmed as amended by the shareholders
under subsection (2) and, in the case of a
by-law referred to in paragraph (1)(i.1) ,
approved by the Superintendent.
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79. Subsection 221(1) of the Act is
replaced by the following:
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| Proposal to
amend
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221. (1) Subject to subsection (2), a director
or a shareholder who is entitled to vote at an
annual meeting of shareholders of a bank may,
in accordance with sections 143 and 144,
make a proposal to make an application
referred to in section 215 or to make, amend
or repeal the by-laws referred to in subsection
217(1) of the bank.
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80. Section 223 of the Act is replaced by
the following:
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| Application to
amalgamate
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223. (1) On the joint application of two or
more bodies corporate incorporated by or
under an Act of Parliament, including banks
and bank holding companies , the Minister
may issue letters patent amalgamating and
continuing the applicants as one bank.
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| Restriction
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(2) Despite subsection (1), if one of the
applicants is a bank named in Schedule I as
that Schedule read immediately before the day
section 174 of the Financial Consumer
Agency of Canada Act comes into force, other
than a bank in respect of which the Minister
has specified that subsection 378(1) no longer
applies , the Minister shall not issue letters
patent referred to in subsection (1) unless
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(a) the amalgamated bank would be a
widely held bank; or
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(b) the amalgamated bank would be
controlled by a widely held bank holding
company that, at the time the application
was made, controlled
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(ii) any other applicant that is a bank
named in Schedule I as that Schedule
read immediately before the day section
174 of the Financial Consumer Agency
of Canada Act comes into force, other
than a bank in respect of which the
Minister has specified that subsection
378(1) no longer applies.
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| Restriction
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(3) Despite subsection (1), if the
amalgamated bank would be a bank with
equity of five billion dollars or more, the
Minister shall not issue letters patent referred
to in that subsection unless the amalgamated
bank is
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(b) controlled, within the meaning of
paragraphs 3(1)(a) and (d), by a widely held
bank, or by a widely held bank holding
company, that controlled one of the
applicants at the time the application was
made; or
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(c) controlled, within the meaning of
paragraph 3(1)(d), by a widely held
insurance holding company, or by an
eligible Canadian financial institution, as
defined in subsection 370(1), other than a
bank, or by an eligible foreign institution, as
defined in subsection 370(1), that
controlled one of the applicants at the time
the application was made.
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81. Subsection 228(3) of the Act is
replaced by the following:
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| Application of
sections 23 to
26
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(3) If two or more bodies corporate, none of
which is a bank, apply for letters patent under
subsection (1), sections 23 to 26 apply in
respect of the application with any
modifications that the circumstances require.
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| Matters for
consideration
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(4) Before issuing letters patent of
amalgamation continuing the applicants as
one bank, the Minister shall take into account
all matters that the Minister considers relevant
to the application, including
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(a) the sources of continuing financial
support for the amalgamated bank;
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(b) the soundness and feasibility of the
plans of the applicants for the future
conduct and development of the business of
the amalgamated bank;
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(c) the business record and experience of
the applicants;
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(d) the reputation of the applicants for being
operated in a manner that is consistent with
the standards of good character and
integrity;
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(e) whether the amalgamated bank will be
operated responsibly by persons with the
competence and experience suitable for
involvement in the operation of a financial
institution;
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(f) the impact of any integration of the
operations and businesses of the applicants
on the conduct of those operations and
businesses;
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(g) the opinion of the Superintendent
regarding the extent to which the proposed
corporate structure of the amalgamated
bank and its affiliates may affect the
supervision and regulation of the
amalgamated bank, having regard to
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(i) the nature and extent of the proposed
financial services activities to be carried
out by the amalgamated bank and its
affiliates, and
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(ii) the nature and degree of supervision
and regulation applying to the proposed
financial services activities to be carried
out by the affiliates of the amalgamated
bank; and
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(h) the best interests of the financial system
in Canada.
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82. The Act is amended by adding the
following after section 229:
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| Court
enforcement
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229.1 (1) If a bank or any director, officer,
employee or agent of a bank is contravening
or has failed to comply with any term or
condition made in respect of the issuance of
letters patent of amalgamation, the Minister
may, in addition to any other action that may
be taken under this Act, apply to a court for an
order directing the bank or the director,
officer, employee or agent to comply with the
term or condition, cease the contravention or
do any thing that is required to be done, and on
the application the court may so order and
make any other order it thinks fit.
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| Appeal
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(2) An appeal from an order of a court under
this section lies in the same manner as, and to
the same court to which, an appeal may be
taken from any other order of the court.
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| 1999, c. 28,
s. 14
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83. Subsection 230(1) of the Act is
amended by adding the word ``and'' at the
end of paragraph (g) and by repealing
paragraph (h).
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84. Section 239 of the Act is amended by
adding the following after subsection (5):
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| Electronic
access
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(5.1) A bank may make the information
contained in records referred to in subsection
238(1) available to persons by any system of
mechanical or electronic data processing or
any other information storage device that is
capable of reproducing the records in
intelligible written form within a reasonable
time.
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85. Subsection 245(1) of the Act is
replaced by the following:
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| Location and
processing of
information
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245. (1) Subject to subsection (3), a bank
shall maintain and process in Canada any
information or data relating to the preparation
and maintenance of the records referred to in
section 238 unless the Superintendent has,
subject to any terms and conditions that the
Superintendent considers appropriate,
exempted the bank from the application of this
section.
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86. Subsection 248(3) of the Act is
replaced by the following:
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| Application of
certain
provisions
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(3) Subsections 239(5) and (5.1) and
sections 240 and 242 to 245 apply, with any
modifications that the circumstances require,
in respect of a central securities register.
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87. Section 307 of the Act is replaced by
the following:
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| Financial year
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307. (1) The financial year of a bank ends,
at the election of the bank in its by-laws , on
the expiration of the thirty-first day of October
or the thirty-first day of December in each
year.
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| First financial
year
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(2) If a bank, after the first day of July in any
year, obtains an order approving the
commencement and carrying on of business,
the first financial year of the bank ends, at the
election of the bank in its by-laws , on the
expiration of the thirty-first day of October or
the thirty-first day of December in the next
calendar year.
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