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Bill C-15

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R.S., c. 18 (3rd Supp.), Part I

OFFICE OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS ACT

1991, c. 45, s. 557

104. Paragraph (f) of the definition ``financial institution'' in section 3 of the Office of the Superintendent of Financial Institutions Act is repealed.

105. The Act is amended by adding the following after section 3:

Purpose of Act

To ensure regulation of institutions

3.1 The purpose of this Act is to ensure that financial institutions are regulated by an office of the Government of Canada so as to contribute to public confidence in the Canadian financial system.

106. Section 4 of the Act is renumbered as subsection 4(1) and is amended by adding the following:

Objects of Office

(2) The objects of the Office are

    (a) to supervise financial institutions in order to determine whether they are in sound financial condition and are complying with their governing statute law and supervisory requirements under that law;

    (b) to promptly advise the management and board of directors of a financial institution in the event the institution is not in sound financial condition or is not complying with its governing statute law or supervisory requirements under that law and, in such a case, to take, or require the management or board to take, the necessary corrective measures or series of measures to deal with the situation in an expeditious manner;

    (c) to promote the adoption by management and boards of directors of financial institutions of policies and procedures designed to control and manage risk; and

    (d) to monitor and evaluate system-wide or sectoral events or issues that may have a negative impact on the financial condition of financial institutions.

Protection of depositors, etc.

(3) In pursuing its objects, the Office shall strive to protect the rights and interests of depositors, policyholders and creditors of financial institutions having due regard to the need to allow financial institutions to compete effectively and take reasonable risks.

Factors affecting financial institutions

(4) Notwithstanding that the regulation and supervision of financial institutions by the Office and the Superintendent can reduce the risk that financial institutions will fail, regulation and supervision must be carried out having regard to the fact that boards of directors are responsible for the management of financial institutions, financial institutions carry on business in a competitive environment that necessitates the management of risk and financial institutions can experience financial difficulties that can lead to their failure.

107. Section 8 of the Act is replaced by the following:

Appointment of Deputy Superinten-
dents

8. The Superintendent may appoint one or more officers each to be called a Deputy Superintendent of Financial Institutions.

108. Paragraph 18(1)(c) of the Act is replaced by the following:

    (c) the Chairperson of the Canada Deposit Insurance Corporation; and

1991, c. 46, s. 601(1)

109. (1) The portion of subsection 22(1) of the Act before paragraph (a) is replaced by the following:

Information is confidential

22. (1) Subject to subsection (3), all information

(2) Subsection 22(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 or any compensation association designated by order of the Minister pursuant to subsection 449(1) or 591(1) of the Insurance Companies Act, for purposes related to its operation, and

(3) Section 22 of the Act is amended by adding the following after subsection (2):

Disclosure

(3) The Superintendent shall disclose, at such times and in such manner as the Minister may determine, such information obtained by the Superintendent under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act as the Minister considers ought to be disclosed for the purposes of the analysis of the financial condition of a financial institution and that

    (a) is contained in returns filed pursuant to the Superintendent's financial regulatory reporting requirements; 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 financial institutions.

Prior consultation required

(4) The Minister shall consult with the Superintendent before making any determination under subsection (3).

Exceptions to disclosure

(5) Subject to any regulations made under a statute referred to in subsection (3) governing the use by a financial institution of any information supplied to it by its customers, no information obtained by a financial institution regarding any of its customers shall be disclosed or made available under subsection (3).

Report respecting disclosure

(6) The Superintendent shall prepare a report, to be included in the report referred to in section 25, respecting the disclosure of information by financial institutions and describing the state of progress made in enhancing the disclosure of information in the financial services industry.

1992, c. 56, s. 18(2)

110. (1) Paragraph 23(1)(a) of the Act is replaced by the following:

    (a) the total amount of expenses incurred during the immediately preceding fiscal year for or in connection with the administration of the Bank Act, the Cooperative Credit Associations Act, the Green Shield Canada Act, the Insurance Companies Act and the Trust and Loan Companies Act;

(2) Paragraph 23(1)(e) of the Act is repealed.

Transitional

(3) Notwithstanding subsections (1) and (2) and section 166, the Superintendent of Financial Institutions shall, before December 31 in the year in which this subsection comes into force, ascertain

    (a) the total amount of expenses incurred during the immediately preceding fiscal year and up to and including the date on which this subsection comes into force for or in connection with the administration of the Investment Companies Act, as that Act read immediately before the coming into force of section 166 of this Act, and

    (b) the average total assets during the calendar year 1994 of each investment company to which the Investment Companies Act applied on December 31, 1995, as that Act read immediately before the coming into force of section 166 of this Act,

and subsections 23(2), (3), (5), (6) and (7) of the Office of the Superintendent of Financial Institutions Act continue to apply, with such modifications as the circumstances require, in respect of the final assessment of each investment company that was in existence under the Investment Companies Act, as that Act read immediately before the coming into force of section 166 of this Act.

111. The schedule to the Act is amended by striking out the following:

Investment Companies Act

    Loi sur les sociétés d'investissement

1991, c. 45

TRUST AND LOAN COMPANIES ACT

112. Subsection 41(1) of the Trust and Loan Companies Act is replaced by the following:

Prohibited names

41. (1) A company 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 45 for another company or a proposed company.

113. Section 43 of the Act is replaced by the following:

Affiliated company

43. Notwithstanding section 41, a company 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.

114. Subsection 44(4) of the Act is replaced by the following:

Directions

(4) Where a company is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, by order, direct the company 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 41(1)(a) to (e).

115. Sections 46 to 48 of the Act are replaced by the following:

Directing change of name

46. (1) If through inadvertence or otherwise a company

    (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 41, the Superintendent may, by order, direct the company to change its name and the company shall comply with that direction.

Revoking name

(2) Where a company 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 company and assign to it a name and, until changed in accordance with subsection 220(1), the name of the company is thereafter the name so assigned.

Restriction re trust company name

47. (1) No entity incorporated or formed by or under an Act of Parliament other than this Act shall use the word ``fiduciaire'', ``fiduciary'', ``fiducie'', ``trust'' or ``trustco'' or any word or words of import equivalent to any of those words in its name.

Restriction re loan company name

(2) No entity incorporated or formed by or under any Act of Parliament other than this Act shall use the word ``loan'', ``loanco'' or ``prêt'' or any word or words of import equivalent to any of those words in its name.

Exception

(3) Subsections (1) and (2) do not apply to

    (a) an entity the business of which is not financial activities; or

    (b) an entity that was, on the day immediately preceding the day on which

      (i) subsection (1) comes into force, using the word ``fiduciaire'', ``fiduciary'', ``fiducie'', ``trust'' or ``trustco'' or any word or words of import equivalent to any of those words in its name, or

      (ii) subsection (2) comes into force, using the word ``loan'', ``loanco'' or ``prêt'' or any word or words of import equivalent to any of those words in its name.

Subsidiaries

48. Notwithstanding section 47 but subject to the approval in writing of the Superintendent, a subsidiary of a company that is

    (a) a trust company pursuant to subsection 57(2) may use the word ``fiduciaire'', ``fiduciary'', ``fiducie'', ``trust'' or ``trustco'' or any word or words of import equivalent to any of those words in its name; and

    (b) any other company incorporated or formed under this Act may use the word ``loan'', ``loanco'' or ``prêt'' or any word or words of import equivalent to any of those words in its name.

Definition of ``reserved name''

48.1 (1) In this section, ``reserved name'' means a name that includes as part thereof the word ``assurance'', ``assurances'', ``insurance'', ``lifeco'', ``fiduciaire'', ``fiduciary'', ``fiducie'', ``trust'', ``trustco'', ``loan'', ``loanco'' or ``prêt'' or any word or words of import equivalent to any of those words.

Termination of control required in certain cases

(2) No person, other than a financial institution, who

    (a) is carrying on business in Canada under a reserved name, and

    (b) has control or acquires control of a company,

shall control the company on the later of

    (c) one year after this section comes into force, and

    (d) one year after the date of acquisition of the control.

Prohibition

(3) No person, other than a financial institution, who

    (a) controls an entity that is not a financial institution that carries on business in Canada under a reserved name, and

    (b) has control or acquires control of a company,

shall control the company on the later of

    (c) one year after this section comes into force, and

    (d) one year after the date of the acquisition of the control.

Continuing control prohibited

(4) Notwithstanding subsection (3), where a financial institution controls an entity that

    (a) is not a financial institution,

    (b) carries on business in Canada under a reserved name, and

    (c) has control or acquires control of a company,

the entity shall not control the company on the later of

    (d) one year after this section comes into force, and

    (e) one year after the date on which the entity acquires control of the company.

Exceptions

(5) Subsections (2) to (4) do not apply with respect to a person or entity that was carrying on business in Canada under a reserved name on the day immediately preceding the day on which those subsections come into force.

116. Subsections 58(2) to (6) of the Act are repealed.

117. The Act is amended by adding the following after section 166:

Affiliated director determina-
tion

166.1 (1) Notwithstanding section 166, the Superintendent may determine that a particular director is affiliated with a company 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 company or with an affiliate of the company 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.

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