BILL C-8 (First Reading)

Horizontal short-form amalgamation	(2) Two or more bodies corporate incorporated by or under an Act of Parliament may amalgamate and continue as an association without complying with sections 227 to 229 if
	(a) at least one of the applicants is an association;
	(b) the applicants are all wholly-owned subsidiaries of the same holding body corporate;
	(c) the amalgamation is approved by a resolution of the directors of each of the applicants; and
	(d) the resolutions provide that
	(i) the shares of all applicants, except those of one of the applicants that is an association, will be cancelled without any repayment of capital in respect of those shares,
	(ii) the letters patent of amalgamation and the by-laws of the amalgamated association will be the same as the incorporating instrument and the by-laws of the amalgamating association whose shares are not cancelled, and
	(iii) the stated capital of the amalgamating association and bodies corporate whose shares are cancelled will be added to the stated capital of the amalgamating association whose shares are not cancelled.
	287. Section 231 of the Act is amended by adding the following after subsection (2):
Application of sections 24 to 26	(3) If two or more bodies corporate, none of which is an association, apply for letters patent under subsection (1), sections 24 to 26 apply in respect of the application with any modifications that the circumstances require.
Matters for consideration	(4) Before issuing letters patent of amalgamation continuing the applicants as one association, the Minister shall take into account all matters that the Minister considers relevant to the application, including
	(a) the sources of continuing financial support for the amalgamated association;
	(b) the soundness and feasibility of the plans of the applicants for the future conduct and development of the business of the amalgamated association;
	(c) the business record and experience of the applicants;
	(d) the reputation of the applicants for being operated in a manner that is consistent with the standards of good character and integrity;
	(e) whether the amalgamated association will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;
	(f) the impact of any integration of the operations and businesses of the applicants on the conduct of those operations and businesses;
	(g) whether the association is to be operated in accordance with cooperative principles; and
	(h) the best interests of the financial system in Canada and, in particular, the cooperative financial system in Canada.
	288. The Act is amended by adding the following after section 232:
Court enforcement	232.1 (1) If an association or any director, officer, employee or agent of an association 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 association 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.
Appeal	(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.
	289. The Act is amended by adding the following after section 233:
	Transfer of Business
Sale by association	233.1 (1) An association may sell all or substantially all of its assets to a financial institution incorporated by or under an Act of Parliament, a central cooperative credit society for which an order has been made under subsection 473(1), a bank holding company or an authorized foreign bank in respect of its business in Canada if the purchasing financial institution, central cooperative credit society, bank holding company or authorized foreign bank assumes all or substantially all of the liabilities of the association.
Sale agreement	(2) An agreement of purchase and sale (in subsection (3), section 233.2, subsections 233.3(1) and (4) and section 233.5 referred to as a ``sale agreement'') must set out the terms of, and means of effecting, the sale of assets referred to in subsection (1).
Considera- tion	(3) Despite anything in this Act, the consideration for a sale referred to in subsection (1) may be cash or fully paid securities of the purchasing financial institution, central cooperative credit society for which an order has been made under subsection 473(1), bank holding company or authorized foreign bank or in part cash and in part fully paid securities of the purchasing financial institution, central cooperative credit society, bank holding company or authorized foreign bank or any other consideration that is provided for in the sale agreement.
Meaning of ``authorized foreign bank'' and ``bank holding company''	(4) In this section, ``authorized foreign bank'' and ``bank holding company'' have the meaning assigned to those expressions by section 2 of the Bank Act.
Agreement to Minister	233.2 A sale agreement must be submitted to the Minister before the sending of the sale agreement to members and shareholders of the selling association under subsection 233.3(1).
Approval	233.3 (1) The directors of a selling association shall submit a sale agreement for approval to a meeting of the members, and to a meeting of shareholders, of the association and, subject to subsection (3), to the holders of each class or series of shares of the association.
Right to vote	(2) Each share of a selling association carries the right to vote in respect of a sale referred to in subsection 233.1(1) whether or not the share otherwise carries the right to vote.
Class vote	(3) The holders of shares of a class or series of shares of a selling association are entitled to vote separately as a class or series in respect of a sale referred to in subsection 233.1(1) only if the shares of the class or series are affected by the sale in a manner different from the shares of another class or series.
Special resolution	(4) A sale agreement is approved when the members and shareholders, and the holders of each class or series of shares entitled to vote separately as a class or series under subsection (3), of the selling association have approved the sale by special resolution.
Abandoning sale	233.4 If a special resolution approving a sale under subsection 233.3(4) so states, the directors of a selling association may, subject to the rights of third parties, abandon the sale without further approval of the members and shareholders.
Application to Minister	233.5 (1) Subject to subsection (2), unless a sale agreement is abandoned in accordance with section 233.4, the selling association shall, within three months after the approval of the sale agreement in accordance with subsection 233.3(4), apply to the Minister for approval of the sale agreement.
Conditions precedent to application	(2) No application for approval under subsection (1) may be made unless
	(a) a notice of intention to make the application has been published at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the selling association is situated; and
	(b) the application is supported by satisfactory evidence that the selling association has complied with the requirements of sections 233.1 to 233.4 and this section.
Approval by Minister	(3) A sale agreement has no force or effect until it has been approved by the Minister.
Approval by Minister	(4) If an application has been made to the Minister in accordance with subsections (1) and (2), the Minister may approve the sale agreement to which the application relates.
	290. (1) Section 236 of the Act is amended by adding the following after subsection (4):
Electronic access	(4.1) An association may make the information contained in records referred to in subsection 235(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.
	(2) Subsection 236(5) of the French version of the Act is replaced by the following:
Exemplaires	(5) Les associés et les actionnaires peuvent sur demande et sans frais, une fois par année civile, obtenir un exemplaire des règlements administratifs de l'association.
	291. Subsection 242(1) of the Act is replaced by the following:
Location and processing of information	242. (1) Subject to subsection (3), an association shall maintain and process in Canada any information or data relating to the preparation and maintenance of the records referred to in section 235 unless the Superintendent has, subject to any terms and conditions that the Superintendent considers appropriate, exempted the association from the application of this section.
	292. Subsection 245(3) of the Act is replaced by the following:
Application of certain provisions	(3) Subsections 236(4) and (4.1) and sections 237 and 239 to 242 apply, with any modifications that the circumstances require, in respect of a central securities register.
	293. (1) The portion of paragraph 292(3)(a) of the Act before subparagraph (i) is replaced by the following:
	(a) a list of the subsidiaries of the association, other than subsidiaries that are not required to be listed by the regulations and subsidiaries acquired pursuant to section 394 or pursuant to a realization of security in accordance with section 395 and which the association would not otherwise be permitted to hold, showing, with respect to each subsidiary,
	(2) Section 292 of the Act is amended by adding the following after subsection (4):
Regulations	(5) The Governor in Council may make regulations respecting subsidiaries that are not required to be listed for the purposes of paragraph (3)(a).
1997, c. 15, s. 135	294. Section 296 of the Act is replaced by the following:
Copy to Superinten- dent	296. (1) Subject to subsection (2) , an association shall send to the Superintendent a copy of the documents referred to in subsections 292(1) and (3) not later than twenty-one days before the date of each annual meeting of members of the association.
Later filing	(2) If an association's shareholders or members sign a resolution under paragraph 161(1)(b) in lieu of an annual meeting, the association shall send a copy of the documents referred to in subsections 292(1) and (3) to the Superintendent not later than thirty days after the signing of the resolution.
	295. (1) Subsection 299(3) of the Act is replaced by the following:
Notice of designation	(3) Within fifteen days after the appointment of a firm of accountants as auditor of the association, the association and the firm of accountants shall jointly designate a member of the firm who meets the qualifications described in subsection (1) to conduct the audit of the association on behalf of the firm and the association shall forthwith notify the Superintendent in writing of the designation.
	(2) Subsection 299(4) of the French version of the Act is replaced by the following:
Remplace- ment d'un membre désigné	(4) Si, pour une raison quelconque, le membre désigné cesse de remplir ses fonctions, l'association et le cabinet de comptables peuvent désigner conjointement un autre membre qui remplit les conditions du paragraphe (1); l'association en avise sans délai par écrit le surintendant.
	296. Subsection 353(2) of the Act is replaced by the following:
Priority not affected	(2) Nothing in subsection (1) prejudices or affects the priority of any holder of any security interest in any property of an association.
1993, c. 34, s. 54	297. Subsections 354(3) and (4) of the Act are replaced by the following:
Exemption	(3) On application by an association , the Superintendent may exempt from the application of this section and section 355 any class of shares of the association that do not amount to more than 30 % of the equity of the association.
Definition of ``equity''	(4) For the purposes of this section, ``equity'', in respect of an association, means its equity as determined in accordance with the regulations.
	298. The Act is amended by adding the following after section 354:
No acquisition of control without approval	354.1 No person shall acquire control, within the meaning of paragraph 3(1)(e), of an association without the prior approval of the Minister.
	299. Subsection 357(1) of the Act is replaced by the following:
When approval not required	357. (1) Despite subsections 354(1) and (2) and section 355, the approval of the Minister is not required if
	(a) the Superintendent has, by order, directed the association to increase its capital and shares of the association are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or
	(b) a person who controls, within the meaning of paragraph 3(1)(d), the association acquires additional shares of the association.
	300. Sections 358 and 359 of the Act are replaced by the following:
Application for approval	358. (1) An application for an approval of the Minister required under this Part must be filed with the Superintendent and contain the information, material and evidence that the Superintendent may require.
Applicant	(2) If , with respect to any particular transaction, this Part applies to more than one person, any one of those persons may make the application to the Minister for approval on behalf of all of those persons.
Matters for consideration	358.1 If an application for an approval under subsection 354(1) is made, the Minister, in determining whether or not to approve the transaction, shall take into account all matters that the Minister considers relevant to the application, including
	(a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the association;
	(b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the association;
	(c) the business record and experience of the applicant or applicants;
	(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;
	(e) whether the association will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;
	(f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the association on the conduct of those businesses and operations;
	(g) whether the association is to be operated in accordance with cooperative principles; and
	(h) the best interests of the financial system in Canada and, in particular, the cooperative financial system in Canada.
Terms and conditions	359. The Minister may impose any terms and conditions in respect of an approval given under this Part that the Minister considers necessary to ensure compliance with any provision of this Act.
	301. Section 361 of the Act is replaced by following:
Notice of decision to applicant	361. (1) Subject to subsections (2) and (3) and section 362, the Minister shall, within a period of thirty days after the certified date referred to in subsection 360(1), send to the applicant