Bill C-82

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	2nd Session, 35th Parliament, 45-46 Elizabeth II, 1996-97
	The House of Commons of Canada
	BILL C-82
	An Act to amend certain laws relating to financial institutions
	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. The portion of subsection 11(1) of the Bank Act* before paragraph (a) is replaced by the following:**
Distribution to the public	11. (1) Subject to subsection (2), for the purposes of this Act, a security of a body corporate or an unincorporated entity
	2. Section 21 of the Act is replaced by the following:
Sunset provision	21. Banks shall not carry on business after March 31, 2002, except that, if Parliament dissolves after December 31, 2001 and before April 1, 2002, banks may continue to carry on business until the day that is one hundred and eighty days after the first day of the first session of the next Parliament.
	3. (1) The portion of subsection 39(1) of the Act before paragraph (a) is replaced by the following:
Transitional	39. (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 in respect of which letters patent were issued under subsection 35(1) permission to

	(2) The portion of subsection 39(2) of the French version of the Act before paragraph (a) is replaced by the following:
Durée des exceptions	(2) L'arrêté précise la période de validité de l'autorisation, qui ne peut excéder :
	(3) Subsections 39(3) and (4) of the Act are replaced by the following:
Renewal	(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 (e) for such further period or periods as the Minister considers necessary.
Limitation	(4) The Minister shall not grant to a bank any permission
	(a) with respect to matters described in paragraph (1)(b), that purports to be effective more than ten years after the date of the approval for the bank to commence and carry on business, unless the Minister is satisfied on the basis of evidence on oath provided by an officer of the bank that the bank 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
	(b) with respect to matters described in paragraphs (1)(d) and (e), that purports to be effective more than ten years after the date of the approval for the bank to commence and carry on business.
1991, c. 46, s. 574	4. Section 39.1 of the Act is replaced by the following:
This Act ceases to apply	39.1 Where subsection 39.2(1) or 376.1(1), (2) or (5) or section 402.1 applies in respect of a bank, on the day specified in the letters patent continuing the bank as a company under subsection 33(1) or 234(1) of the Trust and Loan Companies Act, this Act ceases to apply to the bank and that Act applies to the company so continued under that Act.
Other transfer	39.2 (1) A bank may, with the approval in writing of the Minister, apply for letters patent continuing the bank as a company under subsection 33(1) of the Trust and Loan Companies Act or amalgamating and continuing the bank as a company under section 228 and subsection 234(1) of that Act.
Conditions for approval	(2) No approval referred to in subsection (1) may be given to a bank unless the Minister is satisfied that the application of the bank has been authorized by a special resolution.
1996, c. 6, s. 1	5. (1) The portion of paragraph 40(c) of the Act before subparagraph (i) is replaced by the following:
	(c) that is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, any existing
1996, c. 6, s. 1	(2) Paragraph 40(d) of the Act is replaced by the following:
	(d) that is the same as or, in the opinion of the Superintendent, substantially the same as or confusingly similar to, the known name under or by which any entity carries on business or is identified; or
	6. (1) The portion of subsection 55(1) of the Act before paragraph (a) is replaced by the following:
Permission to foreign bank subsidiary	55. (1) On the recommendation of the Superintendent, the Minister may, at the same time that an order is made approving the commencement and carrying on of business by a foreign bank subsidiary, by further order, grant the foreign bank subsidiary permission to
	(2) Subsection 55(2) of the Act is replaced by the following:
Extension of permission	(2) Permission granted to a bank by order of the Minister under subsection (1) is only for the period specified in the order. That period may not be more than two years, except that the Minister may extend the period by further order on application by the bank. The total of the period and any extensions of it may not, in any case, exceed ten years.
	7. Section 66 of the Act is amended by adding the following after subsection (2):
Exception	(3) Notwithstanding subsection (2), a bank may record in the appropriate stated capital account part of the amount of any consideration it receives for shares it issues
	(a) in exchange for
	(i) property of a person who immediately before the exchange did not deal with the bank at arm's length within the meaning of the Income Tax Act, or
	(ii) shares of a body corporate that immediately before the exchange, or because of the exchange, did not deal with the bank at arm's length within the meaning of the Income Tax Act; or
	(b) under an agreement referred to in subsection 224(1) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank.
Limit on addition to a stated capital account	(4) On the issuance of a share, a bank shall not add to the stated capital account in respect of the share an amount greater than the amount of the consideration it receives for the share.
Constraint on addition to a stated capital account	(5) Where a bank that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the bank as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 77(4).
	8. Subsection 140(2) of the Act is replaced by the following:
Notice where adjournment is longer	(2) If a meeting of shareholders is adjourned by one or more adjournments for a total of thirty days or more, notice of the continuation of the meeting shall be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than ninety days, subsection 156.04(1) does not apply.
	9. Subsection 143(2) of the Act is replaced by the following:
Management proxy	(2) A bank that solicits proxies shall, in the management proxy circular required by subsection 156.05(1), set out any proposal of a shareholder submitted for consideration at a meeting of shareholders or attach the proposal to the management proxy circular.
	10. The Act is amended by adding the following after section 156:
	Proxies
Definitions	156.01 The definitions in this section apply in this section and sections 156.02 to 156.08.
``registrant'' « courtier agréé »	``registrant'' means a securities broker or dealer required to be registered to trade or deal in securities under the laws of any jurisdiction.
``solicit'' or ``solicita- tion'' « sollici- tation »	``solicit'' or ``solicitation'' includes
	(a) a request for a proxy, whether or not accompanied by or included in a form of proxy,
	(b) a request to execute or not to execute a form of proxy or to revoke a proxy,
	(c) the sending of a form of proxy or other communication to a shareholder under circumstances reasonably calculated to result in the procurement, withholding or revocation of a proxy, and
	(d) the sending of a form of proxy to a shareholder under section 156.04,
	but does not include
	(e) the sending of a form of proxy in response to an unsolicited request made by or on behalf of a shareholder,
	(f) the performance of administrative acts or professional services on behalf of a person soliciting a proxy,
	(g) the sending by a registrant of the documents referred to in section 156.07, or
	(h) a solicitation by a person in respect of shares of which that person is the beneficial owner.
``solicita- tion by or on behalf of the management of a bank'' « sollici- tation effectuée par la direction d'une banque ou pour son compte »	``solicitation by or on behalf of the management of a bank'' means a solicitation by any person pursuant to a resolution or instruction of, or with the acquiescence of, the directors or a committee of the directors of the bank.
Appointing proxyholder	156.02 (1) A shareholder who is entitled to vote at a meeting of shareholders may, by executing a form of proxy, appoint a proxyholder or one or more alternate proxyholders, who are not required to be shareholders, to attend and act at the meeting in the manner and to the extent authorized by the proxy and with the authority conferred by the proxy.
Execution of proxy	(2) A form of proxy shall be executed by a shareholder or by a shareholder's attorney authorized in writing to do so.
Limit on authority	(3) No appointment of a proxyholder provides authority for the proxyholder to act in respect of the appointment of an auditor or the election of a director unless a nominee proposed in good faith for the appointment or election is named in the form of proxy, a management proxy circular, a dissident's proxy circular or a proposal under subsection 143(1).
Required information	(4) A form of proxy must indicate, in bold-face type, that the shareholder by whom or on whose behalf it is executed may appoint a proxyholder, other than a person designated in the form of proxy, to attend and act on the shareholder's behalf at a meeting to which the proxy relates, and must contain instructions as to the manner in which the shareholder may do so.
Validity of proxy	(5) A proxy is valid only at the meeting in respect of which it is given or at a continuation of the meeting after an adjournment.
Revocation of proxy	(6) A shareholder may revoke a proxy
	(a) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney authorized in writing to do so
	(i) at the head office of the bank at any time up to and including the last business day before the day of a meeting, or a continuation of the meeting after an adjournment, at which the proxy is to be used, or
	(ii) with the chairperson of the meeting on the day of the meeting or a continuation of the meeting after an adjournment; or
	(b) in any other manner permitted by law.
Deposit of proxies	156.03 The directors may specify, in a notice calling a meeting of shareholders or a continuation of a meeting of shareholders after an adjournment, a time before which executed forms of proxy to be used at the meeting or the continued meeting must be deposited with the bank or its transfer agent. The time specified may not be more than forty-eight hours, excluding Saturdays and holidays, before the meeting or the continued meeting.
Mandatory solicitation	156.04 (1) Subject to subsection 140(2) and subsection (2), the management of a bank shall, concurrently with giving notice of a meeting of shareholders, send a form of proxy in prescribed form to each shareholder entitled to receive notice of the meeting.
Exception	(2) If a bank has fewer than fifteen shareholders, the management of the bank is not required to send a form of proxy to the shareholders under subsection (1). For the purpose of this subsection, two or more joint shareholders are counted as one shareholder.
Soliciting proxies	156.05 (1) A person shall not solicit proxies unless
	(a) in the case of solicitation by or on behalf of the management of a bank, a management proxy circular in prescribed form, either as an appendix to, or as a separate document accompanying, the notice of the meeting, is sent to the auditor or auditors of the bank and to each shareholder whose proxy is solicited; and
	(b) in the case of any other solicitation, a dissident's proxy circular in prescribed form stating the purposes of the solicitation is sent to the auditor or auditors of the bank, to each shareholder whose proxy is solicited and to the bank.

Copy to Superin- tendent	(2) A person who sends a management proxy circular or dissident's proxy circular shall at the same time file with the Superintendent
	(a) in the case of a management proxy circular, a copy of it together with a copy of the notice of meeting, form of proxy and any other documents for use in connection with the meeting; and
	(b) in the case of a dissident's proxy circular, a copy of it together with a copy of the form of proxy and any other documents for use in connection with the meeting.
Exemption by Superin- tendent	(3) On the application of an interested person, the Superintendent may, on any terms that the Superintendent thinks fit, exempt the person from any of the requirements of subsection (1) and section 156.04, and the exemption may be given retroactive effect.
Reporting exemptions	(4) The Superintendent shall set out in a periodical available to the public the particulars of each exemption granted under subsection (3) together with the reasons for the exemption.
Attendance at meeting	156.06 (1) A person who solicits a proxy and is appointed proxyholder shall attend in person or cause an alternate proxyholder to attend the meeting in respect of which the proxy is valid, and the proxyholder or alternate proxyholder shall comply with the directions of the shareholder who executed the form of proxy.
Rights of proxyholder	(2) A proxyholder or an alternate proxyholder has the same rights as the appointing shareholder to speak at a meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and, except where a proxyholder or an alternate proxyholder has conflicting instructions from more than one shareholder, to vote at the meeting in respect of any matter by way of a show of hands.
Vote by show of hands	(3) Where the chairperson of a meeting of shareholders declares to the meeting that, if a ballot were conducted, the total number of votes attached to shares represented at the meeting by proxy required to be voted against what, to the knowledge of the chairperson, would be the decision of the meeting in relation to any matter or group of matters is less than five per cent of all the votes that might be cast at the meeting on the ballot, unless a shareholder or proxyholder demands a ballot,
	(a) the chairperson may conduct the vote in respect of that matter or group of matters by way of a show of hands; and
	(b) a proxyholder or alternate proxyholder may vote in respect of that matter or group of matters by way of a show of hands.
Duty of registrant	156.07 (1) Shares of a bank that are registered in the name of a registrant or registrant's nominee and that are not beneficially owned by the registrant shall not be voted unless the registrant sends to the beneficial owner

Bill C-82

BILL C-82

BANK ACT

Proxies