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Formalities of Incorporation
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| Incorporation
of bank
holding
company
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671. On the application of one or more
persons made in accordance with this Part, the
Minister may, subject to this Division, issue
letters patent incorporating a bank holding
company.
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| Restrictions
on
incorporation
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672. Letters patent incorporating a bank
holding company may not be issued if the
application therefor is made by or on behalf of
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(a) Her Majesty in right of Canada or in
right of a province, an agency of Her
Majesty in either of those rights, or an entity
controlled by Her Majesty in either of those
rights;
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(b) the government of a foreign country or
any political subdivision thereof;
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(c) an agency of the government of a foreign
country or any political subdivision thereof;
or
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(d) an entity, other than a foreign institution
or any subsidiary of a foreign institution,
that is controlled by the government of a
foreign country or any political subdivision
thereof.
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| National
treatment
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673. If a proposed bank holding company
would be a subsidiary of a foreign bank, within
the meaning of any of paragraphs (a) to (f) of
the definition ``foreign bank'' in section 2,
letters patent to incorporate the bank holding
company may not be issued unless the
Minister is satisfied that, if the application is
made by a non-WTO Member foreign bank,
treatment as favourable for bank holding
companies to which this Act applies exists or
will be provided in the jurisdiction in which
the foreign bank principally carries on
business, either directly or through a
subsidiary.
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| Application
for
incorporation
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674. An application for letters patent to
incorporate a bank holding company setting
out the names of the first directors of the bank
holding company shall be filed with the
Superintendent, together with such other
information, material and evidence as the
Superintendent may require.
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| Matters for
consideration
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675. Before issuing letters patent to
incorporate a bank holding company, the
Minister shall take into account all matters
that the Minister considers relevant to the
application, including
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(a) the nature and sufficiency of the
financial resources of the applicant or
applicants as a source of continuing
financial support for the bank that is
proposed to be its subsidiary;
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(b) the soundness and feasibility of the
plans of the applicant or applicants for the
future conduct and development of the
business of the bank that is proposed to be
its subsidiary;
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(c) the business record and experience of
the applicant or applicants;
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(d) the character and integrity of the
applicant or applicants or, if the applicant or
any of the applicants is a body corporate, its
reputation for being operated in a manner
that is consistent with the standards of good
character and integrity;
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(e) whether the bank holding company 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
businesses and operations of the applicant
or applicants with those of the bank holding
company and its affiliates on the conduct of
those businesses and operations; and
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(g) the best interests of the financial system
in Canada.
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| Contents of
letters patent
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676. (1) There shall be set out in the letters
patent incorporating a bank holding company
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(a) the name of the bank holding company;
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(b) the place in Canada where the head
office of the bank holding company is to be
situated; and
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(c) the date that the bank holding company
came, or is to come, into existence.
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| Provisions in
letters patent
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(2) The Minister may set out in the letters
patent incorporating a bank holding company
any provision not contrary to this Act that the
Minister considers advisable in order to take
into account the particular circumstances of
the proposed bank holding company.
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| Terms and
conditions
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(3) The Minister may impose such terms
and conditions in respect of the issuance of
letters patent incorporating a bank holding
company as the Minister considers necessary
or appropriate.
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| Letters patent
of
incorporation
on application
of banks
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677. (1) If, under section 671, the Minister
issues letters patent incorporating a bank
holding company on the application of a bank,
there may, on the request of the bank, and with
the approval of the Minister, be included in the
letters patent of incorporation of the bank
holding company a provision deeming shares
of the bank holding company to be issued, on
a share for share basis, to all shareholders of
the bank in exchange for all the issued and
outstanding shares of the bank.
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| Effect of
provision
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(2) Shares of a bank holding company
deemed to be issued under subsection (1) are
subject to the same designation, rights,
privileges and restrictions or conditions and,
subject to any agreement to the contrary, to the
same charges, encumbrances and other
restrictions as the shares of the bank for which
they are exchanged and the shares of the bank,
on the issuance of the letters patent, become
the property of the bank holding company free
and clear of any charge, encumbrance or other
restriction.
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| Effect of
provision
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(3) An exchange of shares of a bank referred
to in subsection (1) under a provision included
in the letters patent incorporating a bank
holding company does not deprive a person
who was a holder of shares of the bank
immediately before the exchange of any right
or privilege with respect to the shares or
relieve the person of any liability in respect of
the shares, but that right or privilege must be
exercised in accordance with this Act.
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| Transfer and
voting of
shares
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(4) Despite subsection (3), no share of a
bank holding company that is deemed to be
issued under a provision included in the letters
patent incorporating a bank holding company
may subsequently be transferred or voted
contrary to this Act.
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| Shareholder
approval
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(5) No provision described in subsection (1)
may be included in letters patent issued under
section 671 unless the application for the
letters patent is accompanied by evidence that
the request for the provision was approved by
a special resolution of the shareholders of the
bank at a shareholders' meeting called to
consider the application.
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| Exchange of
share
certificates
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(6) If, under a provision included in the
letters patent incorporating a bank holding
company, a share exchange is deemed to have
taken place, the bank holding company shall,
within ninety days after the issuance of the
letters patent, make provision for the issue of
share certificates representing shares of the
bank holding company and for the exchange
of those certificates for share certificates
representing the shares of the bank that were
outstanding on the effective date of the letters
patent.
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| Proposal
involving
fundamental
change
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678. (1) On application, made in
accordance with the regulations, by a bank to
give effect to a proposal to incorporate a bank
holding company as the holding body
corporate of the bank, to continue a body
corporate as a bank holding company of the
bank or to amalgamate two or more bodies
corporate and continue those bodies corporate
as a bank holding company of the bank - and
to make any other fundamental change to or in
respect of the bank, including an exchange of
any or all of the shares of the bank for shares
of the bank holding company-, the Minister
may, to give effect to the proposal,
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(a) include in the letters patent of the bank
holding company issued under section 671,
684 or 809 any provision the Minister
considers necessary; or
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(b) despite any provision of the Act
specified in regulations made under
paragraph 2(e), give any approval that the
Minister considers necessary.
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| Regulations
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(2) The Governor in Council may make
regulations
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(a) respecting applications referred to in
subsection (1), including their form and the
information to be contained in them, and
authorizing the Superintendent to require
additional information in respect of such
applications;
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(b) respecting proposals to which
subsection (1) applies, including the
information to be contained in the proposals
and the times within which the transactions
involved in them must occur;
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(c) respecting the procedures to be followed
by a bank that makes an application under
subsection (1);
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(d) respecting the approval, confirmation or
authorization, if any, of all or any portion of
proposals to which subsection (1) applies,
including the approval of shareholders and
including the terms and conditions of those
approvals, confirmations or authorizations
and their effect; and
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(e) specifying provisions of the Act for the
purpose of paragraph (1)(b).
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| Notice of
issue of letters
patent
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679. The Superintendent shall cause to be
published in the Canada Gazette a notice of
the issuance of letters patent incorporating a
bank holding company.
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| First directors
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680. The first directors of a bank holding
company are the directors named in the
application for letters patent to incorporate the
bank holding company.
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| Effect of
letters patent
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681. A bank holding company comes into
existence on the date provided therefor in its
letters patent.
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Continuance
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| Federal
corporations
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682. (1) A body corporate incorporated
under the Canada Business Corporations Act
or any other Act of Parliament, including a
bank, may apply to the Minister for letters
patent continuing the body corporate as a bank
holding company under this Part.
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| Other
corporations
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(2) A body corporate incorporated
otherwise than by or under an Act of
Parliament may, if so authorized by the laws
of the jurisdiction where it is incorporated,
apply to the Minister for letters patent
continuing the body corporate as a bank
holding company under this Part.
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| Application
for
continuance
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683. (1) Where a body corporate applies for
letters patent under subsection 682(1) or (2),
sections 672 to 675 apply in respect of the
application, with such modifications as the
circumstances require.
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| Special
resolution
approval
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(2) Where a body corporate applies for
letters patent under subsection 682(1) or (2),
the application must be duly authorized by a
special resolution.
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| Copy of
special
resolution
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(3) A copy of the special resolution referred
to in subsection (2) shall be filed with the
application.
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| Power to issue
letters patent
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684. (1) On the application of a body
corporate under subsection 682(1) or (2), the
Minister may, subject to this Division, issue
letters patent continuing the body corporate as
a bank holding company under this Part.
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| Issue of letters
patent
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(2) Where letters patent are issued to a body
corporate under subsection (1), section 676
applies in respect of the issue of letters patent,
with such modifications as the circumstances
require.
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| Effect of
letters patent
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685. On the day set out in the letters patent
continuing a body corporate as a bank holding
company under subsection 684(1),
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(a) the body corporate becomes a bank
holding company as if it had been
incorporated under this Part; and
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(b) the letters patent are deemed to be the
incorporating instrument of the continued
bank holding company.
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| Copy of
letters patent
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686. (1) Where a body corporate is
continued as a bank holding company under
this Part, the Superintendent shall without
delay send a copy of the letters patent to the
appropriate official or public body in the
jurisdiction in which the body corporate was
authorized to apply to be continued under this
Part.
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| Notice of
issuance of
letters patent
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(2) The Superintendent shall cause to be
published in the Canada Gazette a notice of
the issuance of letters patent continuing a
body corporate as a bank holding company
under this Part.
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| Effects of
continuance
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687. Where a body corporate is continued
as a bank holding company under this Part,
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(a) the property of the body corporate
continues to be the property of the bank
holding company;
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(b) the bank holding company continues to
be liable for the obligations of the body
corporate;
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(c) an existing cause of action or claim by
or against the body corporate or any
liability of the body corporate to
prosecution is unaffected;
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(d) a civil, criminal or administrative action
or proceeding pending by or against the
body corporate may continue to be
prosecuted by or against the bank holding
company;
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(e) a conviction against, or any ruling, order
or judgment in favour of or against the body
corporate may be enforced by or against the
bank holding company;
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(f) a person who, on the day the body
corporate becomes a bank holding
company, was the holder of a security
issued by the body corporate is not deprived
of any right or privilege available to the
person at that time in respect of the security
or relieved of any liability in respect
thereof, but any such right or privilege may
be exercised only in accordance with this
Act; and
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(g) the by-laws of the body corporate,
except those that are in conflict with this
Act, continue as the by-laws of the bank
holding company.
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| Transitional
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688. (1) Notwithstanding any other
provision of this Act or the regulations, the
Minister may, on the recommendation of the
Superintendent, by order, grant to a bank
holding company in respect of which letters
patent were issued under subsection 684(1)
permission to
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(a) engage in a business activity specified in
the order that a bank holding company is not
otherwise permitted by this Act to engage in
and that the body corporate continued as the
bank holding company was engaging in at
the time the application for the letters patent
was made;
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(b) continue to have issued and outstanding
debt obligations the issue of which is not
authorized by this Act if the debt
obligations were outstanding at the time the
application for the letters patent was made;
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(c) hold assets that a bank holding company
is not otherwise permitted by this Act to
hold if the assets were held by the body
corporate continued as the bank holding
company at the time the application for the
letters patent was made;
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(d) acquire and hold assets that a bank
holding company is not otherwise
permitted by this Act to acquire or hold if
the body corporate continued as the bank
holding company was obliged, at the time
the application for the letters patent was
made, to acquire those assets; and
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(e) maintain outside Canada any records or
registers required by this Act to be
maintained in Canada and maintain and
process outside Canada information and
data relating to the preparation and
maintenance of such records or registers.
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| Duration
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(2) The permission granted under
subsection (1) shall be expressed to be granted
for a period specified in the order not
exceeding
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(a) with respect to any activity described in
paragraph (1)(a), thirty days after the
effective date of the letters patent or, where
the activity is conducted pursuant to an
agreement existing on the effective date of
the letters patent, the expiration of the
agreement;
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(b) with respect to any matter described in
paragraph (1)(b), ten years; and
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(c) with respect to any matter described in
any of paragraphs (1)(c) to (e), two years.
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| Renewal
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(3) Subject to subsection (4), the Minister
may, on the recommendation of the
Superintendent, by order, renew a permission
granted by order under subsection (1) with
respect to any matter described in paragraphs
(1)(b) to (d) for such further period or periods
as the Minister considers necessary.
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| Limitation
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(4) The Minister shall not grant to a bank
holding company any permission
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(a) with respect to matters described in
paragraph (1)(b), that purports to be
effective more than ten years after the
effective date of the letters patent, unless
the Minister is satisfied on the basis of
evidence on oath provided by an officer of
the bank holding company that the bank
holding company will not be able at law to
redeem at the end of the ten years the
outstanding debt obligations to which the
permission relates; and
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(b) with respect to matters described in
paragraphs (1)(c) and (d), that purports to be
effective more than ten years after the
effective date of the letters patent.
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Discontinuance
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| Transferring
to other Acts
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689. (1) A bank holding company may, with
the approval in writing of the Minister, apply
to be continued as a body corporate under any
other Act of Parliament or any Act of the
legislature of a province.
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| Conditions for
approval
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(2) No approval referred to in subsection (1)
may be given to a bank holding company
unless the Minister is satisfied that the
application of the bank holding company has
been authorized by a special resolution.
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| Meaning of
``bank
holding
company
without a
bank
subsidiary''
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690. (1) For the purpose of this section,
``bank holding company without a bank
subsidiary'' means a bank holding company
that does not, at any time within one year after
it came into existence, have a subsidiary that
is a bank or that does not, for a period of one
year, have a subsidiary that is a bank.
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| Obligation to
apply
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(2) A bank holding company without a bank
subsidiary must, within 30 days after
becoming a bank holding company without a
bank subsidiary, apply to be continued under
subsection 689(1).
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