Total value of
all assets
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(5) For the purposes of subsection (1), the
total value of all assets that the bank or any of
its subsidiaries has acquired during the period
of twelve months referred to in subsection (1)
is the purchase price of the assets or, if the
assets are shares of, or ownership interests in,
an entity the assets of which immediately after
the acquisition were included in the annual
statement of the bank, the fair market value of
the assets of the entity at the date of the
acquisition.
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Total value of
all assets
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(6) For the purposes of subsection (1), the
total value of all assets that the bank or any of
its subsidiaries has transferred during the
period of twelve months referred to in
subsection (1) is the book value of the assets
as stated in the last annual statement of the
bank prepared before the transfer or, if the
assets are shares of, or ownership interests in,
an entity the assets of which were included in
the last annual statement of the bank before
the transfer, the value of the assets of the entity
as stated in the annual statement.
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Transitional
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483. Nothing in this Part requires
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But if the loan or investment would be
precluded or limited by this Part, the amount
of the loan or investment may not, except as
provided in subsections 471(2), 472(3) and
473(3), be increased after that date.
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Saving
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484. A loan or investment referred to in
section 483 is deemed not to be prohibited by
the provisions of this Part.
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122. Subsection 487(2) of the Act is
amended by striking out the word ``or'' at
the end of paragraph (b) and by adding the
following after paragraph (c):
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123. The Act is amended by adding the
following after section 488:
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Deeming
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488.1 For the purposes of this Part, a
transaction between a bank and another
person is deemed to be a transaction with a
related party of the bank if the proceeds of the
transaction are transferred to or used for the
benefit of a related party of the bank or if the
transaction otherwise benefits a related party
of the bank.
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124. The Act is amended by adding the
following after section 495:
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Transactions
with holding
companies
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495.1 (1) Subject to subsection (2) and
sections 495.2 and 495.3, if a widely held bank
holding company or a widely held insurance
holding company has a significant interest in
any class of shares of a bank, the bank may
enter into any transaction with the holding
company or with any other related party of the
bank that is an entity in which the holding
company has a substantial investment.
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Policies and
procedures
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(2) The bank shall adhere to policies and
procedures established under subsection
195(3) when entering into the transaction.
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Restriction
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495.2 (1) If a bank enters into a transaction
with a related party of the bank with whom the
bank may enter into transactions under
subsection 495.1(1) and that is not a federal
financial institution, the bank shall not
directly or indirectly make, take an
assignment of or otherwise acquire a loan to
the related party, make an acceptance,
endorsement or other guarantee on behalf of
the related party or make an investment in the
securities of the related party if, immediately
following the transaction, the aggregate
financial exposure, as that expression is
defined by the regulations, of the bank would
exceed
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Order
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(2) If the Superintendent is of the opinion
that it is necessary for the protection of the
interests of the depositors and creditors of a
bank, the Superintendent may, by order,
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Order
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(3) The Superintendent may, by order,
increase the limit in paragraph (1)(a) or (b)
that would otherwise apply to a bank on
transactions by the bank with related parties
that are financial institutions that are
regulated in a manner acceptable to the
Superintendent.
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Assets
transactions
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495.3 (1) Despite subsection 494(3), a bank
shall not, without the approval of the
Superintendent and its conduct review
committee, directly or indirectly acquire
assets from a related party of the bank with
whom the bank may enter into transactions
under subsection 495.1(1) that is not a federal
financial institution, or directly or indirectly
transfer assets to such a related party if
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A + B > C
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where
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A is the value of the assets;
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B is the total value of all assets that the bank
directly or indirectly acquired from, or
directly or indirectly transferred to, that
related party in the twelve months ending
immediately before the acquisition or
transfer; and
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C is five per cent, or the percentage that may
be prescribed, of the value of the total
assets of the bank, as shown in the last
annual statement of the bank prepared
before the acquisition or transfer.
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Exception
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(2) The prohibition in subsection (1) does
not apply in respect of assets purchased or
otherwise acquired under subsection 494(1),
assets sold under subsection 494(2) or any
other assets as may be prescribed.
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Exception
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(3) The approval of the Superintendent is
not required if
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Value of
assets
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(4) For the purposes of ``A'' in subsection
(1), the value of the assets is
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Total value of
all assets
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(5) For the purposes of subsection (1), the
total value of all assets that the bank or any of
its subsidiaries has acquired during the period
of twelve months referred to in subsection (1)
is the purchase price of the assets or, if the
assets are shares of, or ownership interests in,
an entity the assets of which immediately after
the acquisition were included in the annual
statement of the bank, the fair market value of
the assets of the entity at the date of the
acquisition.
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Total value of
all assets
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(6) For the purposes of subsection (1), the
total value of all assets that the bank or any of
its subsidiaries has transferred during the
period of twelve months referred to in
subsection (1) is the book value of the assets
as stated in the last annual statement of the
bank prepared before the transfer or, if the
assets are shares of, or ownership interests in,
an entity the assets of which were included in
the last annual statement of the bank before
the transfer, the value of the assets of the entity
as stated in the annual statement.
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125. Paragraph 501(2)(b) of the Act is
replaced by the following:
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126. Section 506 of the Act is replaced by
the following:
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Order to void
contract or to
grant other
remedy
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506. (1) If a bank enters into a transaction
that it is prohibited from entering into by this
Part, the bank or the Superintendent may
apply to a court for an order setting aside the
transaction or for any other appropriate
remedy, including an order directing that the
related party of the bank involved in the
transaction account to the bank for any profit
or gain realized or that any director or senior
officer of the bank who authorized the
transaction compensate the bank for any loss
or damage incurred by the bank.
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Time limit
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(2) An application under subsection (1) in
respect of a particular transaction may only be
made within the period of three months
following the day the notice referred to in
section 505 in respect of the transaction is
given to the Superintendent or, if no such
notice is given, the day the Superintendent
becomes aware of the transaction.
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Certificate
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(3) For the purposes of subsection (2), a
document purporting to have been issued by
the Superintendent, certifying the day on
which the Superintendent became aware of
the transaction, shall, in the absence of
evidence to the contrary, be received in
evidence as conclusive proof of that fact
without proof of the signature or of the official
character of the person appearing to have
signed the document and without further
proof.
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1991, c. 47,
par.
756(1)(b);
1994, c. 47,
s. 26; 1997,
c. 15, ss. 76 to
85; 1999,
c. 28, ss. 27 to
34, c. 31,
s. 15(F)
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127. Part XII of the Act is replaced by the
following:
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PART XII |
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FOREIGN BANKS |
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Interpretation and Application |
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Definitions
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507. (1) In this Part,
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``Canadian
financial
entity'' « entité financière canadienne »
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``Canadian financial entity'' means a
Canadian entity, other than a prescribed
Canadian entity or a Canadian entity
referred to in any of paragraphs 468(1)(a) to
(i), that
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``entity
associated
with a foreign
bank'' « entité liée à une banque étrangère »
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``entity associated with a foreign bank''
means an entity associated with a foreign
bank within the meaning of subsection (2);
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``factoring
entity'' « entité s'occupant d'affactu- rage »
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``factoring entity'' means a Canadian entity
that is a factoring entity as defined in the
regulations;
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``finance
entity'' « entité s'occupant de financement »
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``finance entity'' means a Canadian entity that
is a finance entity as defined in the
regulations;
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``financial
leasing
entity'' « entité s'occupant de crédit-bail »
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``financial leasing entity'' means a Canadian
entity that is a financial leasing entity as
defined for the purposes of Part IX;
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``foreign
cooperative
credit
society'' « société coopérative de crédit étrangère »
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``foreign cooperative credit society'' means
an entity that is incorporated or formed, and
regulated, by or under the laws of a country
other than Canada and that, outside Canada,
is engaged in the business of a cooperative
credit society;
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``foreign
insurance
company'' « société d'assurances étrangère »
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``foreign insurance company'' means a
foreign company as defined in subsection
2(1) of the Insurance Companies Act;
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``foreign
securities
dealer'' « courtier de valeurs mobilières étranger »
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``foreign securities dealer'' means an entity
that is incorporated or formed, and
regulated, by or under the laws of a country
other than Canada and that, outside Canada,
is engaged in the business of dealing in
securities;
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``mutual fund
distribution
entity'' « courtier de fonds mutuels »
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``mutual fund distribution entity'' means a
Canadian entity that is a mutual fund
distribution entity as defined in the
regulations;
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``mutual fund
entity'' « entité s'occupant de fonds mutuels »
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``mutual fund entity'' means a Canadian entity
that is a mutual fund entity as defined in the
regulations;
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``non-bank
affiliate of a
foreign bank'' « établisseme nt affilié à une banque étrangère »
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``non-bank affiliate of a foreign bank'' means
a Canadian entity - other than a
bank - in which a foreign bank or an entity
associated with a foreign bank holds a
substantial investment, or that is controlled
by a foreign bank or an entity associated
with a foreign bank, but a Canadian entity
is not a non-bank affiliate of a foreign bank
by reason only that a bank that is a
subsidiary of the foreign bank or the entity
associated with a foreign bank controls or
has a substantial investment in the
Canadian entity;
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``permitted
entity'' « entité admissible »
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``permitted entity'' means
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``real property
brokerage
entity'' « courtier immobilier »
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``real property brokerage entity'' means a
Canadian entity that is a real property
brokerage entity as defined in the
regulations;
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``representa- tive office'' « bureau de représenta- tion »
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``representative office'' means an office
established to represent a foreign bank in
Canada that is not subject to the direction
of, or management by, an entity
incorporated or formed by or under an Act
of Parliament or of the legislature of a
province, and the personnel of which are
employed directly or indirectly by the
foreign bank;
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``specialized
financing
entity'' « entité s'occupant de financement spécial »
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``specialized financing entity'' means a
Canadian entity that is a specialized
financing entity as defined in the
regulations.
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When entity
associated
with foreign
bank
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(2) For the purposes of this Part,
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