|
|
(a) apply to the Minister for approval to
retain control of the Canadian entity or to
continue to hold the substantial investment
in the Canadian entity for a period specified
by the Minister or for an indeterminate
period; or
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|
|
|
(b) do all things necessary to ensure that, on
the expiry of the 90 days, it no longer
controls the entity or holds a substantial
investment in the entity.
|
|
| Deemed
temporary
investment
|
(12) Where a foreign bank or an entity
associated with a foreign bank holds control
of, or a substantial investment in, a Canadian
entity referred to in subsection (13) and the
foreign bank or the entity associated with a
foreign bank becomes aware of a change in the
business, affairs or activities of the Canadian
entity that, if the change had taken place
before the acquisition of control or the
substantial investment, would have caused the
entity not to be a Canadian entity referred to
in subsection (13) or would have been such
that approval for the acquisition would have
been required under any of paragraphs
518.2(1)(a) to (e) or (g), the foreign bank or
the entity associated with a foreign bank is
deemed to have acquired, on the day it
becomes aware of the change, a temporary
investment in respect of which subsections
(9), (10) and (11) apply.
|
|
| Canadian
entity for
purposes of
subsection
(12)
|
(13) Subsection (12) applies only in relation
to Canadian entities in which a foreign bank is
permitted to acquire a substantial investment
under this section or subsection 516(1).
|
|
| Acquisition
by loan
worked or
realization of
security
|
(14) Notwithstanding any other provision
of this Part, but subject to subsections (15) and
(16) and section 514, where a foreign bank, or
an entity associated with a foreign bank,
acquires or holds control of, or a substantial
investment in, a Canadian entity
|
|
|
|
(a) as a result of a default that has occurred
pursuant to the terms of an agreement with
respect to a loan made between the foreign
bank, or the entity associated with a foreign
bank, and the Canadian entity or any of its
affiliates, or pursuant to any other
documents governing the terms of the loan,
or
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|
|
|
(b) through the realization of a security
interest for any loan or advance made by the
foreign bank, or the entity associated with
a foreign bank, or for any other debt or
liability owing to it,
|
|
|
|
it may retain the control or the substantial
investment for five years, but it shall do all
things necessary to ensure that, within five
years after the acquisition, it no longer
controls the Canadian entity or holds a
substantial investment in the Canadian entity.
|
|
| Extension
|
(15) On application by a foreign bank or an
entity associated with a foreign bank, the
Minister may extend the period referred to in
subsection (14) by any further period or
periods and subject to any terms and
conditions specified by the Minister.
|
|
| Exception
|
(16) Where a foreign bank or an entity
associated with a foreign bank, under
subsection (14), acquires or holds control of,
or a substantial investment in, a Canadian
entity for which the approval of the Minister
is required under this Part, it may retain the
control or the substantial investment for any
period, or an indeterminate period, that is
approved in writing by the Minister before the
end of the period referred to in subsection (14)
or any extension granted under subsection
(15).
|
|
| Canadian
commercial
entities
|
(17) Notwithstanding paragraph 508(1)(d),
a foreign bank, or an entity associated with a
foreign bank, that is referred to in subsection
(2) may acquire or hold control of, or a
substantial investment in, a Canadian entity
referred to in subsection (18).
|
|
| Permitted
commercial
activities
|
(18) Subject to subparagraph
518.2(1)(g)(i), subsection (17) applies in
respect of a Canadian entity, other than a
Canadian entity referred to in subsection (5) or
in any of paragraphs 468(1)(a) to (i), if
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|
|
|
(a) the Canadian entity, in the opinion of the
Minister, engages in businesses and
activities that are related or incidental to
commercial activities outside Canada of the
foreign bank or the entity associated with a
foreign bank;
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|
|
|
(b) all of the Canadian entity's businesses
and activities, or substantially all of them as
determined under the regulations, do not
include any business or activity referred to
in subsection (5) or (6), other than an
activity referred to in paragraph 410(1)(e)
or subsection 410(2); and
|
|
|
|
(c) the Canadian entity does not engage in
personal property leasing activities.
|
|
| Commercial
holding
company
|
(19) Subject to subparagraph
518.2(1)(g)(ii), a Canadian entity referred to
in subsection (18) may acquire or hold control
of, or a substantial investment in, a Canadian
entity referred to in that subsection.
|
|
| Paragraphs
not applicable
|
(20) Paragraphs 508(1)(a) and (b) do not
apply to a Canadian entity acquired or held in
accordance with this section.
|
|
| Paragraph not
applicable
|
(21) Subject to paragraph 518.2(1)(i),
paragraph 508(1)(c) does not apply to a
Canadian entity, other than one referred to in
subsection (18), that is acquired or held in
accordance with this section.
|
|
| Canadian
commercial
branches
|
518.1 (1) Notwithstanding paragraphs
508(1)(a) and (b), a foreign bank that is
referred to in subsection 518(2) - or an entity
associated with a foreign bank and referred to
in subsection 518(2), that is incorporated or
formed by or under the laws of a country other
than Canada - may, subject to paragraph
518.2(1)(h), carry on in Canada businesses
and activities so long as all of its businesses
and activities outside Canada, or substantially
all of them as determined under the
regulations, do not include personal property
leasing activities or activities that are referred
to in paragraphs (a) to (e), other than
prescribed activities, of the definition
``Canadian financial entity'' in subsection
507(1) or - except under prescribed
circumstances - those referred to in
paragraph (f) of that definition.
|
|
| Businesses
and activities
|
(2) Subsection (1) applies to a foreign bank
or an entity associated with a foreign bank so
long as its businesses and activities in Canada
do not include personal property leasing
activities and
|
|
|
|
(a) in the opinion of the Minister, its
businesses and activities in Canada are
related or incidental to its commercial
activities outside Canada; and
|
|
|
|
(b) all of its businesses and activities in
Canada, or substantially all of them as
determined under the regulations, do not
include any business or activity referred to
in subsection 518(5) or (6), other than an
activity referred to in paragraph 410(1)(e)
or subsection 410(2).
|
|
| Minister's
approval
|
518.2 (1) Subject to subsection (2) and the
regulations, a foreign bank or an entity
associated with a foreign bank may not,
without the prior written approval of the
Minister, given by order,
|
|
|
|
(a) acquire control of a Canadian entity
referred to in any of paragraphs 468(1)(g) to
(i) from a person who is not a member of the
foreign bank's group;
|
|
|
|
(b) acquire control of a Canadian entity
whose business includes one or more of the
activities referred to in paragraph 518(5)(a)
and that engages, as part of its business, in
any financial intermediary activity that
exposes the Canadian entity to material
market or credit risk - including a finance
entity - if the control is acquired from an
entity referred to in any of paragraphs
468(1)(a) to (f) that is not a member of the
foreign bank's group, but does not include
a Canadian entity whose activities are
limited to the activities of one or more of the
following entities:
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|
|
|
|
|
|
|
(ii) a financial leasing entity, or
|
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|
|
(iii) a specialized financing entity;
|
|
|
|
(c) acquire or hold control of, or a
substantial investment in, a Canadian entity
whose business includes one or more of the
activities referred to in paragraph
518(5)(d);
|
|
|
|
(d) acquire or hold control of, or a
substantial investment in, a Canadian entity
that engages in an activity described in
paragraph 410(1)(c) or (c.1);
|
|
|
|
(e) acquire or hold control of, or a
substantial investment in, a Canadian entity
engaging in an activity prescribed for the
purposes of paragraph 518(5)(f);
|
|
|
|
(f) engage in a business or activity referred
to in paragraph 517.1(1)(a) or (b);
|
|
|
|
(g) acquire or hold control of, or a
substantial investment in,
|
|
|
|
(i) a Canadian entity referred to in
subsection 518(18), or
|
|
|
|
(ii) a Canadian entity referred to in
subsection 518(19);
|
|
|
|
(h) engage in a business or activity referred
to in section 518.1; or
|
|
|
|
(i) undertake an activity referred to in
paragraph 517.1(2)(a) or subsection
518(21).
|
|
| Approval for
indirect
investments
|
(2) If a foreign bank or an entity associated
with a foreign bank
|
|
|
|
(a) obtains the approval of the Minister
under any of paragraphs (1)(a) to (e) and (g)
to acquire or hold control of, or a substantial
investment in, a Canadian entity, and
|
|
|
|
(b) through that acquisition or holding,
indirectly acquires control of, or a
substantial investment in, another Canadian
entity that would require the approval of the
Minister under those paragraphs,
|
|
|
|
and that indirect acquisition is disclosed to the
Minister in writing before the approval is
obtained, the foreign bank or the entity
associated with a foreign bank is deemed to
have obtained the approval of the Minister for
that indirect acquisition.
|
|
| Ministerial
approval of
more than one
entity
|
(3) If the Minister approves, under
paragraph 518.2(1)(g), the acquisition or
holding of control of, or a substantial
investment in, a Canadian entity referred to in
subsection 518(18) or (19) by a foreign bank,
or an entity associated with a foreign bank, the
Minister may also authorize the foreign bank,
or entity associated with a foreign bank, at any
time to acquire and hold control of, or a
substantial investment in, any other Canadian
entity referred to in either of those subsections
that engages in activities that are substantially
the same as those engaged in by the Canadian
entity in respect of which the approval was
given.
|
|
| Substantial
investment by
underwriter
|
(4) Nothing in this Part precludes a foreign
bank or an entity associated with a foreign
bank from acquiring a substantial investment
in a Canadian entity if the substantial
investment is acquired, in the course of a
distribution to the public of shares or
ownership interests in the Canadian entity, by
a securities underwriter that is a subsidiary of
the foreign bank or the entity associated with
a foreign bank, provided the securities
underwriter holds the substantial investment
for no longer than six months.
|
|
|
|
|
|
| Regulations
|
519. The Governor in Council may make
regulations for the purposes of this Part and, in
particular, may make regulations
|
|
|
|
(a) concerning specialized financing, for
the purposes of paragraphs 518(5)(a) and
(b) and subparagraph 518(6)(c)(ii);
|
|
|
|
(b) prescribing the circumstances under
which subsection 518.2(1) does not apply,
or the entities in respect of which that
subsection does not apply, including
prescribing entities on the basis of the
activities they engage in;
|
|
|
|
(c) restricting the ownership by foreign
banks, or entities associated with foreign
banks, of shares in a body corporate or of
ownership interests in an unincorporated
entity under subsection 513(1), (6) or (7) or
section 516 or 518 and imposing terms and
conditions applicable to foreign banks, or
entities associated with foreign banks, that
own such shares or interests;
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|
|
|
(d) in respect of sections 409 to 411, for the
purposes of paragraph 518(5)(a) and
subsections 518(7) and 518.2(1);
|
|
|
|
(e) permitting the acquisition or holding of
control or of a substantial investment, for
the purposes of subparagraph 518(6)(c)(iii);
|
|
|
|
(f) respecting the determination of the
amount or value of loans, investments and
interests;
|
|
|
|
(g) respecting the loans and investments,
and the maximum aggregate amount of all
loans and investments, that may be made or
acquired by a foreign bank, or an entity
associated with a foreign bank, to or in a
person and any persons connected with that
person; and
|
|
|
|
(h) specifying the classes of persons who
are connected with any person for the
purposes of paragraph (g).
|
|
| Divestiture
|
520. (1) Where a foreign bank or an entity
associated with a foreign bank contravenes
section 517.1, 518 or 518.1 or fails to comply
with any terms and conditions imposed by any
order made for the purposes of those sections,
the Minister may, if the Minister considers it
in the public interest to do so, by order, direct
the foreign bank or entity associated with a
foreign bank to divest itself of the control of,
or a substantial investment in, a bank or bank
holding company.
|
|
| Ceasing to
carry on
business
|
(2) Where an authorized foreign bank or an
entity associated with an authorized foreign
bank contravenes section 517.1, 518 or 518.1
or fails to comply with any terms and
conditions imposed by any order made for the
purposes of those sections, the Minister may,
if the Minister considers it in the public
interest to do so, revoke the order made under
subsection 524(1).
|
|
| Divestment
order
|
(3) The Minister may, by order, direct a
foreign bank or an entity associated with a
foreign bank, within any period that the
Minister considers reasonable, to dispose of
assets used in a business or activity carried on,
or to dispose of the control of an entity or a
substantial investment therein acquired or
held, in contravention of this Part or in
contravention of any terms and conditions
imposed
|
|
|
|
(a) under subsection 521(1); or
|
|
|
|
(b) under subsection 518(4) or 521(1.02), as
it read immediately before the coming into
force of this section.
|
|
| Definition
|
521. (1) In this section, ``decision'' means
an order, approval, extension or other
permission or direction of or by the Minister
under this Part.
|
|
| Ministerial
terms and
condition
|
(2) A decision may include any terms and
conditions that the Minister considers
appropriate.
|
|
| Effective date
of decision
|
(3) A decision varying or revoking a
previous decision takes effect three months
after the day it is made, or at any other time
that is agreed to by the Minister and the
foreign bank, or the entity associated with a
foreign bank, to which the decision relates.
|
|
| Publication
|
(4) The Minister shall publish in the
Canada Gazette a notice of the making or
revocation of an order under this Part.
|
|
| Statements
and returns
|
521.1 Not later than six months after the end
of its financial year, except to the extent that
the Superintendent has exempted it from any
of the following requirements, any foreign
bank or entity associated with a foreign bank
in respect of which the Minister has issued an
order, approval, extension or other permission
under this Part shall provide the
Superintendent with
|
|
|
|
(a) a copy of its financial statements and
those of each non-bank affiliate of the
foreign bank for the financial year;
|
|
|
|
(b) a list, in a form satisfactory to the
Superintendent, of businesses and activities
carried on by it under sections 515.2, 517.1
and 518.1;
|
|
|
|
(c) a list, in a form satisfactory to the
Superintendent, of each non-bank affiliate
of the foreign bank, with a description of the
nature of the business engaged in by it; and
|
|
|
|
(d) any other information that may be
prescribed for the purposes of this section.
|
|
| Notification
|
521.2 Within 90 days after acquiring
control or a substantial investment under
subsection 518(9) or (12), a foreign bank or an
entity associated with a foreign bank shall
notify the Superintendent of the acquisition.
|
|
| Investment
Canada Act
|
522. (1) Subject to subsection (2), the
provisions of this Act apply in lieu of the
provisions of the Investment Canada Act in
respect of any transaction under this Part,
including
|
|
|
|
(a) the acquisition of control, within the
meaning of that Act, of a bank or a bank
holding company;
|
|
|
|
(b) the establishment of a new Canadian
business, within the meaning of that Act,
that is a bank or a bank holding company;
|
|
|
|
(c) the establishment of a new Canadian
business, within the meaning of that Act, by
a foreign bank or entity associated with a
foreign bank, including the establishment
of the business in Canada of an authorized
foreign bank or a foreign insurance
company, or a foreign securities dealer or
foreign cooperative credit society that has
received the approval of the Minister under
paragraph 518.2(1)(f);
|
|
|
|
(d) the acquisition of control, within the
meaning of that Act, of a Canadian entity by
a foreign bank or an entity associated with
a foreign bank, or the establishment,
directly or indirectly, of a new Canadian
business, within the meaning of that Act, by
a foreign bank or an entity associated with
a foreign bank, whose businesses or
activities in Canada consist of those
referred to in paragraph 508(1)(a); and
|
|
|
|
(e) the establishment of a new Canadian
business, within the meaning of that Act,
that is a representative office referred to in
paragraph 509(a).
|
|
| Exceptions
|
(2) Subsection (1) does not apply in respect
of
|
|
|
|
(a) the acquisition or holding of control of,
or a substantial investment in, a Canadian
entity in accordance with subsection
513(1);
|
|
|
|
(b) the establishment of a new Canadian
business, within the meaning of the
Investment Canada Act, in accordance with
subsection 513(2);
|
|
|
|
(c) the acquisition of control of, or a
substantial investment in, a Canadian entity
other than an entity referred to in any of
paragraphs 468(1)(a) to (f), by
|
|
|
|
(i) a foreign bank that is the subject of an
order under section 507.1, or
|
|
|
|
(ii) an entity associated with a foreign
bank referred to in subparagraph (i);
|
|
|
|
(d) the establishment of a new Canadian
business, within the meaning of the
Investment Canada Act, in accordance with
section 515.2; and
|
|
|
|
(e) the establishment, by a foreign bank that
is the subject of an order of the Minister
under section 507.1 or an entity associated
with such a foreign bank, of a new Canadian
business within the meaning of that Act
|
|
|
|
(i) to which any of paragraphs 508(1)(a)
to (c) applies, and
|
|
|
|
(ii) that does not relate to the
establishment of a business in Canada of
an authorized foreign bank or a foreign
insurance company.
|
|