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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
company 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 total value of the
assets of the company, as shown in the last
annual statement of the company prepared
before the acquisition or transfer.
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| Exception
|
(2) The prohibition in subsection (1) does
not apply in respect of assets purchased or
otherwise acquired under subsection 482(1),
assets sold under subsection 482(2) or any
other assets as may be prescribed.
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| Exception
|
(3) The approval of the Superintendent is
not required if
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(a) the company sells assets under a sale
agreement that is approved by the Minister
under section 241; or
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(b) the company or its subsidiary acquires
shares of, or ownership interests in, an
entity for which the approval of the Minister
under Part VII or subsection 453(5) is
required or the approval of the
Superintendent under subsection 453(6) is
required.
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| Value of
assets
|
(4) For the purposes of ``A'' in subsection
(1), the value of the assets is
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(a) in the case of assets that are acquired, the
purchase price of the assets or, if the assets
are shares of, or ownership interests in, an
entity the assets of which will be included
in the annual statement of the company
after the acquisition, the fair market value
of the assets; and
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(b) in the case of assets that are transferred,
the book value of the assets as stated in the
last annual statement of the company
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 company
before the transfer, the value of the assets as
stated in the annual statement.
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| Total value of
all assets
|
(5) For the purposes of subsection (1), the
total value of all assets that the company 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
company, 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
|
(6) For the purposes of subsection (1), the
total value of all assets that the company 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
company 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 company
before the transfer, the value of the assets of
the entity as stated in the annual statement.
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553. Paragraph 489(2)(b) of the Act is
replaced by the following:
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(b) in respect of any other transaction,
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(i) terms and conditions, including those
relating to price, rent or interest rate, that
might reasonably be expected to apply in
a similar transaction in an open market
under conditions requisite to a fair
transaction between parties who are at
arm's length and who are acting
prudently, knowledgeably and willingly,
or
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(ii) if the transaction is one that would not
reasonably be expected to occur in an
open market between parties who are at
arm's length, terms and conditions,
including those relating to price, rent or
interest rate, that would reasonably be
expected to provide the company with
fair value, having regard to all the
circumstances of the transaction, and that
would be consistent with the parties to
the transaction acting prudently,
knowledgeably and willingly.
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554. Section 494 of the Act is replaced by
the following:
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| Order to void
contract or to
grant other
remedy
|
494. (1) If a company enters into a
transaction that it is prohibited from entering
into by this Part, the company 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 company
involved in the transaction account to the
company for any profit or gain realized or that
any director or senior officer of the company
who authorized the transaction compensate
the company for any loss or damage incurred
by the company.
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| Time limit
|
(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 493 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
|
(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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555. The title of Part XII of the Act is
replaced by the following:
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556. Sections 500 and 501 of the Act are
replaced by the following:
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| Copy of
by-laws
|
500. A company shall send to the
Superintendent, within thirty days after the
coming into effect of a by-law or an
amendment to a by-law, a copy of the by-law
or amendment.
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| Register of
companies
|
501. (1) The Superintendent shall, in
respect of each company for which an order
approving the commencement and carrying
on of business has been made, cause a register
to be maintained containing a copy of
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(a) the incorporating instrument of the
company; and
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(b) the information referred to in
paragraphs 499(1)(a), (c) and (e) to (h)
contained in the latest return sent to the
Superintendent under section 499.
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| Form
|
(2) The register may be maintained in
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(a) a bound or loose-leaf form or in a
photographic film form; or
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(b) a system of mechanical or electronic
data processing or any other information
storage device that is capable of
reproducing any required information in
intelligible written form within a
reasonable time.
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| Access
|
(3) Persons are entitled to reasonable access
to the register and may make copies of or take
extracts from the information in it.
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| Evidence
|
(4) A statement containing information in
the register and purporting to be certified by
the Superintendent is admissible in evidence
in all courts as proof, in the absence of
evidence to the contrary, of the facts stated in
the statement without proof of the
appointment or signature of the
Superintendent.
|
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| 1996, c. 6,
s. 122(1)
|
557. Subsection 503(1) of the Act is
replaced by the following:
|
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| Confidential
information
|
503. (1) Subject to sections 504 and 504.1,
all information regarding the business or
affairs of a company, or regarding a person
dealing with a company, that is obtained by the
Superintendent, or by any person acting under
the direction of the Superintendent, as a result
of the administration or enforcement of any
Act of Parliament, and all information
prepared from that information, is
confidential and shall be treated accordingly.
|
|
| 1996, c. 6,
s. 124
|
558. Section 504.4 of the Act is replaced
by the following:
|
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| Report
respecting
disclosure
|
504.4 The Superintendent shall prepare a
report, to be included in the report referred to
in section 40 of the Office of the
Superintendent of Financial Institutions Act,
respecting the disclosure of information by
companies and describing the state of progress
made in enhancing the disclosure of
information in the financial services industry.
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|
|
|
559. Subsection 505(1) of the Act is
replaced by the following:
|
|
| Examination
of companies
|
505. (1) The Superintendent, from time to
time, but at least once in each calendar year,
shall make or cause to be made any
examination and inquiry into the business and
affairs of each company that the
Superintendent considers to be necessary or
expedient to determine whether the company
is complying with the provisions of this Act
and whether the company is in a sound
financial condition and, after the conclusion
of each examination and inquiry, shall report
on it to the Minister.
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|
|
560. The Act is amended by adding the
following after the heading ``Remedial
Powers'' after section 506:
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|
Prudential Agreements
|
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| Prudential
agreement
|
506.1 The Superintendent may enter into an
agreement, called a ``prudential agreement'',
with a company for the purposes of
implementing any measure designed to
maintain or improve its safety and soundness.
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|
|
561. Subsection 509(1) of the Act is
replaced by the following:
|
|
| Court
enforcement
|
509. (1) Where a company or person
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|
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(a) is contravening or has failed to comply
with a prudential agreement entered into
under section 506.1 or a direction of the
Superintendent issued to the company or
person pursuant to subsection 507(1) or (3),
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(b) is contravening this Act, or
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|
|
(c) has omitted to do any thing under this
Act that is required to be done by or on the
part of the company or person,
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the Superintendent may, in addition to any
other action that may be taken under this Act,
apply to a court for an order requiring the
company or person to comply with the
prudential agreement or direction, cease the
contravention or do any thing that is required
to be done, and on such application the court
may so order and make any other order it
thinks fit.
|
|
| 1996, c. 6,
s. 126
|
562. The heading before section 509.1 of
the Act is replaced by the following:
|
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|
|
Disqualification and Removal of Directors
or Senior Officers
|
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| Meaning of
``senior
officer''
|
509.01 In sections 509.1 and 509.2, ``senior
officer'' means the chief executive officer,
secretary, treasurer or controller of a company
or any other officer reporting directly to the
company's board of directors or chief
executive officer.
|
|
| 1996, c. 6,
s. 126
|
563. (1) Paragraphs 509.1(1)(a) and (b) of
the Act are replaced by the following:
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|
|
(a) that has been notified by the
Superintendent that this section applies to it
where the company is subject to measures
designed to maintain or improve its safety
and soundness, which measures
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|
(i) have been specified by the
Superintendent by way of conditions or
limitations in respect of the order
approving the commencement and
carrying on of the company's business, or
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|
|
(ii) are contained in a prudential
agreement entered into under section
506.1 or an undertaking given by the
company to the Superintendent; or
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|
|
(b) that is the subject of a direction made
under section 507 or an order made under
subsection 473(3).
|
|
| 1996, c. 6,
s. 126
|
(2) Paragraph 509.1(2)(b) of the Act is
replaced by the following:
|
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|
|
(b) each person who has been selected by
the company for appointment as a senior
officer, and
|
|
| 1996, c. 6,
s. 126
|
(3) The portion of subsection 509.1(2) of
the French version of the Act after
paragraph (c) is replaced by the following:
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|
Elle lui communique également les
renseignements personnels qui les concernent
et les renseignements sur leur expérience et
leur dossier professionnel qu'il peut exiger.
|
|
| 1996, c. 6,
s. 126
|
(4) Subsections 509.1(4) and (5) of the Act
are replaced by the following:
|
|
| Disqualificati
on or removal
|
(4) If the Superintendent is of the opinion
that, on the basis of the competence, business
record, experience, conduct or character of a
person, he or she is not suitable to hold that
position, the Superintendent may, by order
|
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|
|
(a) in the case of a person referred to in
paragraph (2)(a) or (b), disqualify the
person from being elected or appointed as a
director of a company or from being
appointed as a senior officer; or
|
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|
|
(b) in the case of a person referred to in
paragraph (2)(c), remove the person from
office as a director of the company.
|
|
| Risk of
prejudice
|
(4.1) In forming an opinion under
subsection (4), the Superintendent must
consider whether the interests of the
depositors and creditors of the company
would likely be prejudiced if the person were
to take office or continue to hold office, as the
case may be.
|
|
| Representatio
ns may be
made
|
(5) The Superintendent must in writing
notify the person concerned and the company
of any action that the Superintendent proposes
to take under subsection (4) and must afford
them an opportunity within 15 days after the
date of the notice, or within any longer period
that the Superintendent allows, to make
representations to the Superintendent in
relation to the matter.
|
|
| 1996, c. 6,
s. 126
|
(5) Subsection 509.1(6) of the English
version of the Act is replaced by the
following:
|
|
| Prohibition
|
(6) Where an order has been made under
subsection (4)
|
|
|
|
(a) disqualifying a person from being
elected or appointed to a position, the
person shall not be, and the company shall
not permit the person to be, elected or
appointed to the position; or
|
|
|
|
(b) removing a director from office, the
person shall not continue to hold, and the
company shall not permit the person to
continue to hold, office as a director.
|
|
|
|
564. The Act is amended by adding the
following after section 509.1:
|
|
| Removal of
directors or
senior officers
|
509.2 (1) The Superintendent may, by
order, remove a person from office as a
director or senior officer of a company if the
Superintendent is of the opinion that the
person is not suitable to hold that office
|
|
|
|
(a) on the basis of the competence, business
record, experience, conduct or character of
the person; or
|
|
|
|
(b) because the person has contravened or,
by action or negligence, has contributed to
the contravention of
|
|
|
|
(i) this Act or the regulations made under
it,
|
|
|
|
(ii) a direction made under section 507,
|
|
|
|
(iii) an order made under subsection
473(3),
|
|
|
|
(iv) a condition or limitation in respect of
the order approving the commencement
and carrying on the company's business,
or
|
|
|
|
(v) a prudential agreement entered into
under section 506.1 or an undertaking
given by the company to the
Superintendent.
|
|
| Risk of
prejudice
|
(2) In forming an opinion under subsection
(1), the Superintendent must consider whether
the interests of the depositors and creditors of
the company have been or are likely to be
prejudiced by the person's holding office as a
director or senior officer.
|
|
| Representatio
ns may be
made
|
(3) The Superintendent must in writing
notify the person concerned and the company
of any removal order that the Superintendent
proposes to make under subsection (1) and
must afford them an opportunity within 15
days after the date of the notice, or within any
longer period that the Superintendent allows,
to make representations to the Superintendent
in relation to the matter.
|
|
| Suspension
|
(4) If the Superintendent is of the opinion
that the public interest may be prejudiced by
the director or senior officer continuing to
exercise the powers or carry out the duties and
functions of that office during the period for
making representations, the Superintendent
may make an order suspending the director or
senior officer. The suspension may not extend
beyond 10 days after the expiration of that
period.
|
|
| Notice of
order
|
(5) The Superintendent shall, without delay,
notify the director or senior officer, as the case
may be, and the company of a removal order
or suspension order.
|
|
| Consequences
of removal
order
|
(6) The director or senior officer, as the case
may be, ceases to hold that office as of the date
the removal order is made or any later date
specified in the order.
|
|
| Appeal
|
(7) The director or senior officer, as the case
may be, or the company may, within 30 days
after the date of receipt of notice of the
removal order under subsection (5), or within
any longer period that the Court allows,
appeal the matter to the Federal Court.
|
|
| Powers of
Federal Court
|
(8) The Federal Court, in the case of an
appeal, may dismiss the appeal or set aside the
removal order.
|
|