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Contributed
surplus entry
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(2) The amount of any contributed surplus
recorded in the stated capital account pursuant
to paragraph (1)(b) shall be deducted from the
contributed surplus account of the bank
holding company.
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Shares issued
before
continuance
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(3) Any amount unpaid in respect of a share
issued by a body corporate before it was
continued as a bank holding company under
this Part and paid after it was so continued
shall be recorded in the stated capital account
maintained by the bank holding company for
the shares of that class or series.
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Pre-emptive
right
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712. (1) Where the by-laws of a bank
holding company so provide, no shares of any
class shall be issued unless the shares have
first been offered to the shareholders holding
shares of that class, and those shareholders
have a pre-emptive right to acquire the offered
shares in proportion to their holdings of the
shares of that class, at such price and on such
terms as those shares are to be offered to
others.
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Exception
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(2) Notwithstanding the existence of a
pre-emptive right, a shareholder of a bank
holding company has no pre-emptive right in
respect of shares of a class to be issued
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Exception
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(3) Notwithstanding the existence of a
pre-emptive right, a shareholder of a bank
holding company has no pre-emptive right in
respect of shares to be issued
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Conversion
privileges
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713. (1) A bank holding company may issue
conversion privileges, options or rights to
acquire securities of the bank holding
company, and shall set out the conditions
thereof
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Transferable
rights
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(2) Conversion privileges, options and
rights to acquire securities of a bank holding
company may be made transferable or
non-transferable, and options and rights to
acquire such securities may be made
separable or inseparable from any securities to
which they are attached.
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Reserved
shares
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(3) Where a bank holding company has
granted privileges to convert any securities
issued by the bank holding company into
shares, or into shares of another class or series,
or has issued or granted options or rights to
acquire shares, if the by-laws limit the number
of authorized shares, the bank holding
company shall reserve and continue to reserve
sufficient authorized shares to meet the
exercise of such conversion privileges,
options and rights.
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Holding of
own shares
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714. Except as provided in sections 715 to
717, or unless permitted by the regulations, a
bank holding company shall not
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Purchase and
redemption of
shares
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715. (1) Subject to subsection (2) and to its
by-laws, a bank holding company may, with
the consent of the Superintendent, purchase,
for the purpose of cancellation, any shares
issued by it, or redeem any redeemable shares
issued by it at prices not exceeding the
redemption price thereof calculated according
to a formula stated in its by-laws or the
conditions attaching to the shares.
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Restrictions
on purchase
and
redemption
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(2) A bank holding company shall not make
any payment to purchase or redeem any shares
issued by it if there are reasonable grounds for
believing that the bank holding company is, or
the payment would cause the bank holding
company to be, in contravention of any
regulation referred to in subsection 949(1) or
(2) or any direction made pursuant to
subsection 949(3).
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Donated
shares
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(3) A bank holding company may accept
from any shareholder a share of the bank
holding company surrendered to it as a gift,
but may not extinguish or reduce a liability in
respect of an amount unpaid on any such share
except in accordance with section 718.
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Holding as
personal
representative
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716. (1) A bank holding company may
permit its subsidiaries to hold, in the capacity
of a personal representative, shares of the bank
holding company or of any body corporate
that controls the bank holding company or
ownership interests in any unincorporated
entity that controls the bank holding company,
but only if the subsidiary does not have a
beneficial interest in the shares or ownership
interests.
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Security
interest
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(2) A bank holding company may permit its
subsidiaries to hold by way of a security
interest shares of the bank holding company or
of any body corporate that controls the bank
holding company, or any ownership interests
of any entity that controls the bank holding
company, if the security interest is nominal or
immaterial when measured by criteria
established by the bank holding company that
have been approved in writing by the
Superintendent.
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Cancellation
of shares
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717. (1) Subject to subsection (2), where a
bank holding company purchases shares of the
bank holding company or fractions thereof or
redeems or otherwise acquires shares of the
bank holding company, the bank holding
company shall cancel those shares.
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Requirement
to sell
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(2) If a subsidiary of a bank holding
company, through the realization of security,
acquires any shares of the bank holding
company or of any body corporate that
controls the bank holding company or any
ownership interests in an unincorporated
entity that controls the bank holding company,
the bank holding company shall cause its
subsidiary to, within six months after the day
of the realization, sell or otherwise dispose of
the shares or ownership interests.
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Reduction of
capital
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718. (1) The stated capital of a bank holding
company may be reduced by special
resolution.
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Limitation
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(2) A bank holding company shall not
reduce its stated capital by special resolution
if there are reasonable grounds for believing
that the bank holding company is, or the
reduction would cause the bank holding
company to be, in contravention of any
regulation referred to in subsection 949(1) or
(2) or any direction made pursuant to
subsection 949(3).
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Contents of
special
resolution
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(3) A special resolution to reduce the stated
capital of a bank holding company shall
specify the stated capital account or accounts
from which the reduction of stated capital
effected by the special resolution will be
deducted.
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Approval by
Superintenden
t
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(4) A special resolution to reduce the stated
capital of a bank holding company has no
effect until it is approved in writing by the
Superintendent.
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Conditions for
approval
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(5) No approval to reduce the stated capital
of a bank holding company may be given by
the Superintendent unless application therefor
is made within three months after the time of
the passing of the special resolution and a copy
of the special resolution, together with a
notice of intention to apply for approval, has
been published in the Canada Gazette.
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Statements to
be submitted
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(6) In addition to evidence of the passing of
a special resolution to reduce the stated capital
of a bank holding company and of the
publication thereof, statements showing
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shall be submitted to the Superintendent at the
time of the application for approval of the
special resolution.
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Recovery by
action
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719. (1) Where any money or property was
paid or distributed to a shareholder or other
person as a consequence of a reduction of
capital made contrary to section 718, a
creditor of the bank holding company may
apply to a court for an order compelling the
shareholder or other person to pay the money
or deliver the property to the bank holding
company.
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Shares held
by personal
representative
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(2) No person holding shares in the capacity
of a personal representative and registered on
the records of the bank holding company as a
shareholder and therein described as the
personal representative of a named person is
personally liable under subsection (1), but the
named person is subject to all the liabilities
imposed by that subsection.
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Limitation
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(3) An action to enforce a liability imposed
by subsection (1) may not be commenced
more than two years after the date of the act
complained of.
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Remedy
preserved
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(4) This section does not affect any liability
that arises under section 794.
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Adjustment of
stated capital
account
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720. (1) On a purchase, redemption or other
acquisition by a bank holding company of
shares or fractions thereof issued by it, the
bank holding company shall deduct from the
stated capital account maintained for the class
or series of shares so purchased, redeemed or
otherwise acquired an amount equal to the
result obtained by multiplying the stated
capital in respect of the shares of that class or
series by the number of shares of that class or
series so purchased, redeemed or otherwise
acquired and dividing by the number of shares
of that class or series outstanding immediately
before the purchase, redemption or other
acquisition.
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Adjustment of
stated capital
account
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(2) A bank holding company shall adjust its
stated capital account or accounts in
accordance with any special resolution
referred to in section 718.
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Shares
converted to
another class
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(3) On a conversion of outstanding shares of
a bank holding company into shares of another
class or series, or on a change of outstanding
shares of the bank holding company into
shares of another class or series, the bank
holding company shall
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Stated capital
of convertible
shares
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(4) For the purposes of subsection (3) and
subject to the bank holding company's
by-laws, where a bank holding company
issues two classes of shares and there is
attached to each class a right to convert a share
of one class into a share of the other class and
a share is so converted, the amount of stated
capital attributable to a share in either class is
the aggregate of the stated capital of both
classes divided by the number of outstanding
shares of both classes immediately before the
conversion.
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Conversion or
change of
shares
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(5) Shares issued by a bank holding
company and converted into shares of another
class or series, or changed under subsection
217(1) into shares of another class or series,
become issued shares of the class or series of
shares into which the shares have been
converted or changed.
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Addition to
stated capital
account
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721. On a conversion of any debt obligation
of a bank holding company into shares of a
class or series of shares, the bank holding
company shall
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Declaration of
dividend
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722. (1) The directors of a bank holding
company may declare and a bank holding
company may pay a dividend by issuing fully
paid shares of the bank holding company or
options or rights to acquire fully paid shares of
the bank holding company and, subject to
subsection (4), the directors of a bank holding
company may declare and a bank holding
company may pay a dividend in money or
property, and where a dividend is to be paid in
money, the dividend may be paid in a currency
other than the currency of Canada.
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Notice to
Superintenden
t
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(2) The directors of a bank holding
company shall notify the Superintendent of
the declaration of a dividend at least ten days
prior to the day fixed for its payment.
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Share
dividend
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(3) If shares of a bank holding company are
issued in payment of a dividend, the bank
holding company shall record in the stated
capital account maintained or to be
maintained for the shares of the class or series
issued in payment of the dividend the declared
amount of the dividend stated as an amount of
money.
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When
dividend not
to be declared
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(4) The directors of a bank holding
company shall not declare and a bank holding
company shall not pay a dividend if there are
reasonable grounds for believing that the bank
holding company is, or the payment would
cause the bank holding company to be, in
contravention of any regulation referred to in
subsection 949(1) or (2) or any direction made
pursuant to subsection 949(3).
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Subordinated Indebtedness
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Restriction on
subordinated
indebtedness
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723. (1) A bank holding company shall not
issue subordinated indebtedness unless the
subordinated indebtedness is fully paid for in
money or, with the approval of the
Superintendent, in property.
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References to
subordinated
indebtedness
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(2) A person shall not in any prospectus,
advertisement, correspondence or literature
relating to any subordinated indebtedness
issued or to be issued by a bank holding
company refer to the subordinated
indebtedness otherwise than as subordinated
indebtedness.
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Other
currencies
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(3) When issuing subordinated
indebtedness, a bank holding company may
provide that any aspect of the subordinated
indebtedness relating to money or involving
the payment of or the liability to pay money in
relation thereto be in a currency other than that
of Canada including, without restricting the
generality of the foregoing, the payment of
any interest thereon.
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Security Certificates and Transfers
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Sections 81 to
135 apply
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724. Sections 81 to 135 apply in respect of
bank holding companies, subject to the
following:
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