Bill C-67

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	(b) sections 559 to 566.
Guarantees and acceptances	541.1 An authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) may, in respect of its business in Canada, guarantee any securities and accept any bills of exchange that are issued by any person and intended by the issuer or any party to be sold or traded.
Payment clearing and settlement	542. Subject to section 22.1 of the Payment Clearing and Settlement Act, an authorized foreign bank may be a participant in a designated clearing and settlement system within the meaning of section 3 of that Act.
Networking	543. (1) Subject to sections 540, 546 and 549, an authorized foreign bank may, in Canada,
	(a) act as agent for any person in respect of the provision of any service that is provided by a financial institution or by a body corporate in which a bank is permitted to have a substantial investment pursuant to section 468 and may enter into an arrangement with any person in respect of the provision of that service; or
	(b) refer any person to that financial institution or body corporate.
Regulations	(2) The Governor in Council may make regulations respecting the disclosure of
	(a) the name of the principal for whom an authorized foreign bank is acting as agent pursuant to subsection (1); and
	(b) whether any commission is being earned by an authorized foreign bank when acting as agent pursuant to subsection (1).
Restriction on fiduciary activities	544. No authorized foreign bank shall act in Canada as
	(a) an executor, administrator or official guardian or a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person; or
	(b) a trustee for a trust.
Deposits that fall below $150,000	545. (1) An authorized foreign bank shall, in respect of its business in Canada, ensure that, on each day that is at least thirty days after the date of the order under subsection 534(1) made in respect of it,
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	where
	A is the sum of all amounts each of which is the sum of all the deposits held by the authorized foreign bank at the end of a day in the preceding thirty days each of which deposits is less than $150,000 and payable in Canada; and
	B is the sum of all amounts each of which is the sum of all deposits held by the authorized foreign bank at the end of a day in those preceding thirty days and payable in Canada.
Exchange rate	(2) For the purpose of subsection (1), the rate of exchange that shall be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada shall be determined in accordance with any regulations that may be made.
Meaning of ``deposit''	(3) For the purpose of subsection (1), ``deposit'' has the meaning that would be given to it by the schedule to the Canada Deposit Insurance Corporation Act for the purposes of deposit insurance if that schedule were read without reference to subsections 2(2), (5) and (6) of that schedule.
Notice before opening account	(4) Before an authorized foreign bank opens a deposit account in Canada, the bank shall, in the prescribed manner, give the person requesting the opening of the account
	(a) a notice in writing that the deposit will not be insured by the Canada Deposit Insurance Corporation; and
	(b) any other information that may be prescribed.
Other notice	(5) An authorized foreign bank shall, in accordance with any regulations that may be made,
	(a) post notices in its branches in Canada to inform the public that deposits with the authorized foreign bank are not insured by the Canada Deposit Insurance Corporation; and
	(b) include in its advertisements notices to inform the public that deposits with the authorized foreign bank are not insured by the Canada Deposit Insurance Corporation.
Regulations	(6) The Governor in Council may make regulations
	(a) respecting the determination of rates of exchange referred to in subsection (2);
	(b) prescribing the manner in which notices referred to in subsection (4) are to be given and the additional information to be contained in the notices; and
	(c) respecting notices referred to in subsection (5).
Deposits less than $150,000	546. (1) An authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) may not, in respect of its business in Canada, act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.
Meaning of ``deposit''	(2) In this section, ``deposit'' has the meaning assigned to that term by subsection 545(3).
Shared premises	547. (1) No authorized foreign bank shall carry on business in Canada on premises that are shared with those of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the authorized foreign bank.
Limitation	(2) Subsection (1) only applies in respect of premises or any portion of premises on which both the authorized foreign bank and the member institution carry on business with the public and to which the public has access.
Adjacent premises	(3) No authorized foreign bank shall carry on business in Canada on premises that are adjacent to a branch or office of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the authorized foreign bank, unless the authorized foreign bank clearly indicates to its customers that its business and the premises on which they are carried on are separate and distinct from the business and premises of the affiliated member institution.
Restriction on securities activities	548. An authorized foreign bank shall not deal in Canada in securities to the extent prohibited or restricted by any regulations that the Governor in Council may make for the purposes of this section.
Restriction on insurance business	549. (1) An authorized foreign bank shall not undertake in Canada the business of insurance except to the extent permitted by this Act or the regulations.
Restriction on acting as agent	(2) An authorized foreign bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space in any branch in Canada of the authorized foreign bank to any person engaged in the placing of insurance.
Regulations	(3) The Governor in Council may make regulations respecting the matters referred to in subsection (1) and regulations respecting relations between authorized foreign banks and
	(a) entities that undertake the business of insurance; or
	(b) insurance agents or insurance brokers.
Saving	(4) Nothing in this section precludes an authorized foreign bank from
	(a) requiring insurance to be placed by a borrower for the security of the authorized foreign bank; or
	(b) obtaining group insurance for its employees.
Annuities	(5) For the purposes of this section, the business of insurance includes the issuance of an annuity where the liability on the insurance is contingent on the death of a person.
Restriction on leasing	550. An authorized foreign bank shall not engage in Canada in any personal property leasing activity in which a financial leasing corporation within the meaning of subsection 464(1) is not permitted to engage.
Restriction on residential mortgages	551. (1) An authorized foreign bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance a loan for that purpose, if the amount of the loan, together with the amount outstanding of any mortgage having an equal or prior claim against the property, would exceed 75 per cent of the value of the property at the time of the loan.
Exception	(2) Subsection (1) does not apply in respect of
	(a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or under which a different limit on the value of property on the security of which the authorized foreign bank may make a loan is established;
	(b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;
	(c) the acquisition by the authorized foreign bank from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the authorized foreign bank to the entity against the issue of those securities; or
	(d) a loan secured by a mortgage where
	(i) the mortgage is taken back by the authorized foreign bank on a property disposed of by it, including where the disposition is by way of a realization of a security interest, and
	(ii) the mortgage secures payment of an amount payable to the authorized foreign bank for the property.
Restriction on security interests	552. (1) Subject to subsection (3), an authorized foreign bank shall not create a security interest in any of the assets in respect of its business in Canada in order to secure an obligation of the authorized foreign bank, unless
	(a) the obligation is to the Bank of Canada; or
	(b) the Superintendent has approved in writing the creation of the security interest.
Encumbered property	(2) An authorized foreign bank shall notify the Superintendent in writing of any beneficial interest in real and personal property acquired by it in respect of its business in Canada, other than by way of realization, that is subject to a security interest.
Exceptions	(3) Subsection (1) does not apply in respect of a security interest created on
	(a) any class of personal property that the Superintendent may, by order, designate; or
	(b) property having an aggregate value that is less than any amount that the Superintendent may, by order, specify.
Restriction on receivers	553. An authorized foreign bank shall not, in respect of its business in Canada, grant to a person the right to appoint a receiver or a receiver and manager of the property or of the business of the authorized foreign bank.
Restriction on partnerships	553.1 (1) Except by order of the Superintendent, an authorized foreign bank shall not, in respect of its business in Canada, be a general partner in a limited partnership or a partner in a general partnership.
Meaning of ``general partnership''	(2) For the purposes of subsection (1), ``general partnership'' means any partnership other than a limited partnership.
Definition of ``non-NAFTA country authorized foreign bank''	554. (1) In this section, ``non-NAFTA country authorized foreign bank'' means an authorized foreign bank that is not controlled by a NAFTA country resident.
Limitation on branches in Canada of non-NAFTA country authorized foreign bank	(2) No non-NAFTA country authorized foreign bank shall have any branch in Canada, other than its principal office and one branch, without the approval of the Minister.
Special security	555. Sections 425 to 436, as they exist from time to time, apply, with any modifications that the circumstances require, in respect of the carrying on of business in Canada by an authorized foreign bank as if a reference to ``bank'' in any of those provisions were a reference to ``authorized foreign bank''.
	Deposit Acceptance
Deposit acceptance	556. (1) Subject to this Part, an authorized foreign bank may, without the intervention of any other person,
	(a) accept a deposit from any person whether or not the person is qualified by law to enter into contracts; and
	(b) pay all or part of the principal of the deposit and all or part of the interest on it to or to the order of that person.
Exception	(2) Paragraph (1)(b) does not apply if, before payment, the money deposited in the authorized foreign bank pursuant to paragraph (1)(a) is claimed by some other person
	(a) in any action or proceeding to which the authorized foreign bank is a party and in respect of which service of a writ or other process originating that action or proceeding has been made on the authorized foreign bank, or
	(b) in any other action or proceeding pursuant to which an injunction or order made by the court requiring the authorized foreign bank not to make payment of that money or make payment of it to some person other than the depositor has been served on the authorized foreign bank,
	and, if a claim is made, the deposited money may be paid to the depositor with the consent of the claimant, or to the claimant with the consent of the depositor.
Execution of trust	(3) An authorized foreign bank is not bound to see to the execution of any trust, whether express or arising by operation of law, to which a deposit made under the authority of this Act is subject.

Bill C-67

Deposit Acceptance