Bill C-15

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Royal Assent

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	45 ELIZABETH II
	CHAPTER 6
	An Act to amend, enact and repeal certain laws relating to financial institutions
	[Assented to 29th May, 1996]
	Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1991, c. 46	BANK ACT
	*1. Sections 40 and 41 of the Bank Act* are replaced by the following:**
Prohibited names	40. A bank may not be incorporated under this Act with a name
	(a) that is prohibited by an Act of Parliament;
	(b) that is, in the opinion of the Superintendent, deceptively misdescriptive;
	(c) that is the same as or, in the opinion of the Superintendent, confusingly similar to any existing
	(i) trade-mark or trade name, or
	(ii) corporate name of a body corporate,
	except where the trade-mark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name and consent to the use of the trade-mark, trade name or corporate name is signified to the Superintendent in such manner as the Superintendent may require;
	(d) that is the same as or, in the opinion of the Superintendent, confusingly similar to the known name under or by which any entity carries on business or is identified; or
	(e) that is reserved under section 43 for another bank or a proposed bank.
Affiliated bank	41. Notwithstanding section 40, a bank that is affiliated, within the meaning of subsection 6(2), with another entity may, with the consent of that entity and the approval in writing of the Superintendent, be incorporated with, or change its name to, substantially the same name as that of the affiliated entity.
	2. Subsection 42(4) of the Act is replaced by the following:
Directions	(4) Where a bank is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, by order, direct the bank not to use that other name if the Superintendent is of the opinion that that other name is a name referred to in any of paragraphs 40(a) to (e).
	3. Section 44 of the Act is replaced by the following:
Directing change of name	44. (1) If through inadvertence or otherwise a bank
	(a) comes into existence or is continued with a name, or
	(b) on an application to change its name, is granted a name
	that is prohibited by section 40, the Superintendent may, by order, direct the bank to change its name and the bank shall comply with that direction.
Revoking name	(2) Where a bank has been directed under subsection (1) to change its name and has not, within sixty days after the service of the direction, changed its name to a name that is not prohibited by this Act, the Superintendent may revoke the name of the bank and assign to it a name and, until changed in accordance with subsection 215(1), the name of the bank is thereafter the name so assigned.
	4. Subsections 54(2) to (6) of the Act are repealed.
	5. The Act is amended by adding the following after section 162:
Affiliated director determina- tion	162.1 (1) Notwithstanding section 162, the Superintendent may determine that a particular director is affiliated with a bank for the purposes of this Act if, in the opinion of the Superintendent, the director has a significant or sufficient commercial, business or financial relationship with the bank or with an affiliate of the bank to the extent that the relationship can be construed as being material to the director and can reasonably be expected to affect the exercise of the director's best judgment.
Notification by Superin- tendent	(2) A determination by the Superintendent under subsection (1)
	(a) becomes effective on the day of the next annual meeting of the shareholders unless a notice in writing by the Superintendent revoking the determination is received by the bank prior to that day; and
	(b) ceases to be in effect on the day of the next annual meeting of the shareholders after a notice in writing by the Superintendent revoking the determination is received by the bank.
	6. Subsections 278(2) to (4) of the Act are repealed.
	7. Subsections 485(2) and (3) of the Act are replaced by the following:
Regulations and guidelines	(2) The Governor in Council may make regulations and the Superintendent may make guidelines respecting the maintenance by banks of adequate capital and adequate and appropriate forms of liquidity.
Directives	(3) Notwithstanding that a bank is complying with regulations or guidelines made under subsection (2), the Superintendent may, by order, direct the bank
	(a) to increase its capital; or
	(b) to provide additional liquidity in such forms and amounts as the Superintendent may require.
	8. Section 499 of the Act is replaced by the following:
Exemption by order	499. (1) A bank may enter into a transaction with a related party of the bank if the Superintendent, by order, has exempted the transaction from the provisions of section 489.
Conditions for order	(2) The Superintendent shall not make an order referred to in subsection (1) unless the Superintendent is satisfied that the decision of the bank to enter into the transaction has not been and is not likely to be influenced in any significant way by a related party of the bank and does not involve in any significant way the interests of a related party of the bank.
	9. Subsection 510(3) of the Act is replaced by the following:
Cancellation of registration	(3) Where, in the opinion of the Superintendent, a representative office of a foreign bank is not being operated, or the personnel of that office are not conducting themselves, in accordance with the rules prescribed for the purposes of paragraph 509(a), the Superintendent may, by order, cancel the registration of the representative office.
	10. (1) Subsection 531(1) of the Act is replaced by the following:
Confidential information	531. (1) Subject to sections 532 and 532.1, all information regarding the business or affairs of a bank or persons dealing therewith 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 is confidential and shall be treated accordingly.
	(2) Subsection 531(2) of the Act is amended by striking out the word ``and'' at the end of paragraph (a) and by adding the following after paragraph (a):
	(a.1) to the Canada Deposit Insurance Corporation for purposes related to its operation, and
	11. Paragraph 532(b) of the Act is repealed.
	12. The Act is amended by adding the following after section 532:
Disclosure by Superin- tendent	532.1 (1) The Superintendent shall disclose, at such times and in such manner as the Minister may determine, such information obtained by the Superintendent under this Act as the Minister considers ought to be disclosed for the purposes of the analysis of the financial condition of a bank and that
	(a) is contained in returns filed pursuant to the Superintendent's financial regulatory reporting requirements in respect of banks; or
	(b) has been obtained as a result of an industry-wide or sectoral survey conducted by the Superintendent in relation to an issue or circumstances that could have an impact on the financial condition of banks.
Prior consultation required	(2) The Minister shall consult with the Superintendent before making any determination under subsection (1).
Disclosure by a bank	532.2 (1) A bank shall make available to the public such information concerning
	(a) the compensation of its executives, as that expression is defined by the regulations, and
	(b) its business and affairs for the purposes of the analysis of its financial condition,
	in such form and manner and at such times as may be required by or pursuant to such regulations as the Governor in Council may make for the purpose.
Exemption by regulation	(2) Paragraph (1)(a) does not apply to a bank that is within such class or classes of banks as may be prescribed.
Exceptions to disclosure	532.3 Subject to any regulations made under section 459, no information obtained by a bank regarding any of its customers shall be disclosed or made available under subsection 532.1(1) or section 532.2
Report respecting disclosure	532.4 The Superintendent shall prepare a report, to be included in the report referred to in section 25 of the Office of the Superintendent of Financial Institutions Act, respecting the disclosure of information by banks and describing the state of progress made in enhancing the disclosure of information in the financial services industry.
	13. Section 536 of the Act is repealed.
	14. The Act is amended by adding the following after section 537:
	Disqualification from Election or Appointment
Application	537.1 (1) This section applies only in respect of a bank
	(a) that has been notified by the Superintendent that this section so applies where the bank is subject to measures requiring it to maintain or improve its safety and soundness, which measures have been specified by the Superintendent by way of
	(i) conditions or limitations in respect of the order approving the commencement and carrying on of the bank's business, or
	(ii) a written agreement or undertaking between the bank and the Superintendent; or
	(b) that is the subject of
	(i) a direction made pursuant to section 535, or
	(ii) an order made pursuant to subsection 485(3) requiring the bank to increase its capital.
Information to be provided	(2) A bank shall provide the Superintendent with the name of
	(a) each person who has been nominated for election or appointment as a member of its board of directors,
	(b) each person who has been selected by the directors of the bank for appointment as chief executive officer, secretary, treasurer, controller, or any other officer reporting directly to the bank's board of directors or chief executive officer, and
	(c) each person who is newly elected as a director of the bank at a meeting of shareholders and who was not proposed for election by anyone involved in the management of the bank,
	together with such other information about the background, business record and experience of the person as the Superintendent may require.
When information to be provided	(3) The information required by subsection (2) shall be provided to the Superintendent
	(a) at least thirty days prior to the date or proposed date of the election or appointment or within such shorter period as the Superintendent may allow; or
	(b) in the case of a person referred to in paragraph (2)(c), within fifteen days after the date of the election of the person.
Disqualifi- cation	(4) Where, in respect of a bank, the Superintendent is of the opinion that on the basis of the competence, business record, experience or character of a person referred to in
	(a) paragraph (2)(a) or (c), the person is not suitable for a position as a member of the board of directors of the bank, or
	(b) paragraph (2)(b), the person is not suitable for the discharge of the duties and responsibilities associated with the position referred to in that paragraph,
	the Superintendent may, subject to subsection (5), by order, disqualify the person from being elected or appointed to the position or, in the case of a person referred to in paragraph (2)(c), from continuing to hold office as a director.
Representa- tions may be made	(5) The Superintendent must in writing notify the bank and the person concerned of any action that the Superintendent proposes to take under subsection (4) and must afford them an opportunity within fifteen days after the date of the notice to make representations to the Superintendent in relation to the matter.
Prohibition	(6) Where an order has been made under subsection (4) disqualifying a person
	(a) from being elected or appointed to a position, the person shall not be, and the bank shall not permit the person to be, elected or appointed to the position; or
	(b) from continuing to hold office as a director, the person shall not hold, and the bank shall not permit the person to continue to hold, office as a director.
	15. Subsections 538(1) and (2) of the Act are replaced by the following:
Superin- tendent may take control	538. (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of a bank, the Superintendent may
	(a) take control, for a period not exceeding sixteen days, of the assets of the bank; or
	(b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,
	(i) take control, for a period exceeding sixteen days, of the assets of the bank,
	(ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph, or
	(iii) take control of the bank.
Circumstan- ces for taking control	(1.1) Control by the Superintendent under subsection (1) may be taken in respect of a bank where
	(a) the bank has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

Bill C-15

45 ELIZABETH II

CHAPTER 6

BANK ACT