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Bill C-67

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(2) Subsection 521(1) of the Act is amended by striking out the word ``or'' at the end of paragraph (c) and by adding the following after paragraph (c):

    (c.1) acquire or hold all or substantially all of the assets of another foreign bank that is an authorized foreign bank in relation to the carrying on of business in Canada by that authorized foreign bank;

(3) Subsection 521(1) of the Act is amended by adding the word ``or'' at the end of paragraph (d) and by adding the following after that paragraph:

    (e) acquire control of a Canadian entity whose principal activity in Canada is an activity referred to in any of subparagraphs 518(3)(a)(i) to (v) with the result that the Canadian entity becomes a non-bank affiliate of the foreign bank.

(4) Section 521 of the Act is amended by adding the following after subsection (1):

Exception

(1.001) Paragraphs (1)(c) and (c.1) do not apply in respect of a foreign bank where the assets of a Canadian entity or the assets in relation to the carrying on of business in Canada by an authorized foreign bank are acquired or held by a foreign bank subsidiary of the foreign bank.

Exception

(1.002) Paragraphs (1)(c) and (c.1) do not apply in respect of an authorized foreign bank where the assets of a Canadian entity or the assets in relation to the carrying on of business in Canada by another authorized foreign bank are acquired or held by the authorized foreign bank in relation to its business in Canada.

1997, c. 15, s. 84(3)

(5) Subsections 521(1.02) to (1.04) of the Act are replaced by the following:

Terms and conditions

(1.02) The consent of the Minister under subsection (1) may be subject to any terms and conditions that the Minister may impose in the order.

Where further consent not required

(1.03) Subject to subsection (1.05), after a foreign bank obtains consent under subsection (1) to do something described in any of paragraphs (1)(a) to (e ), the foreign bank may do anything described in any of those paragraphs without seeking further consent under that subsection. This subsection applies for the purpose of determining what a foreign bank may do after August 1, 1997 even if the consent under subsection (1) was obtained before that day .

1997, c. 15, s. 84(3)

(6) Subparagraph 521(1.07)(a)(ii) of the Act is replaced by the following:

      (ii) the foreign bank is regulated as a bank in the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business; or

1997, c. 15, s. 84(3)

(7) The portion of subsection 521(2) of the Act before paragraph (a) is replaced by the following:

Exception to consent requirement

(2) Subsection (1) does not apply where a foreign bank acquires control of, or acquires or holds a substantial investment in, a Canadian entity only because the control is acquired or the substantial investment is acquired or held

1997, c. 15, s. 84(3)

(8) Subsection 521(3) of the Act is replaced by the following:

Ministerial approval

(2.1) The Minister may, in consenting to

    (a) the acquisition of shares of, or ownership interests in, or to the holding of shares of, or ownership interests in, a Canadian entity under the circumstances described in paragraph (1)(b) or (d), respectively, or

    (b) the acquisition of control of a Canadian entity under the circumstances described in paragraph (1)(e),

approve the acquisition or holding of shares of, or ownership interests in, or the acquisition of control of, as the case may be, more than one Canadian entity, if the activities carried on by the entities are substantially the same.

Exception

(2.2) Subsection (1) does not apply where

    (a) the foreign bank acquires a substantial investment in a Canadian entity only because the substantial investment is acquired, in the course of a distribution to the public of shares or ownership interests of the Canadian entity, by a securities underwriter that is a subsidiary of the foreign bank; and

    (b) the securities underwriter holds the substantial investment in the Canadian entity for a period of not more than six months.

Publication

(3) Where the Minister makes an order under subsection (1), the Minister shall publish in the Canada Gazette a notice of the making of the order.

34. (1) Section 522 of the Act is amended by adding the following after paragraph (b):

    (b.1) the establishment of a new Canadian business, within the meaning of that Act, that is the business in Canada of an authorized foreign bank;

(2) Section 522 of the Act is amended by striking out the word ``and'' at the end of paragraph (c), by adding the word ``and'' at the end of paragraph (d) and by adding the following after paragraph (d):

    (e) the acquisition or holding by a foreign bank of all or substantially all of the assets in relation to the carrying on of the business in Canada of an authorized foreign bank.

35. (1) The Act is amended by adding the following after section 522:

PART XII.1

AUTHORIZED FOREIGN BANKS

Application

Application to authorized foreign banks

523. (1) This Part applies only in respect of the business in Canada of authorized foreign banks.

Assets and liabilities

(2) The assets and liabilities of an authorized foreign bank in respect of its business in Canada, as shown by its books and records, are considered to be the assets and liabilities of the authorized foreign bank in respect of its business in Canada.

Formalities of Authorization

Order permitting carrying on of business in Canada, etc.

524. (1) On application by a foreign bank, the Minister may make an order permitting the foreign bank to establish a branch in Canada to carry on business in Canada under this Part.

Restrictions and requirements

(2) The order may be made subject to the restrictions and requirements referred to in subsections 540(1) and (2), respectively.

Reciprocal treatment

(3) The Minister may make an order only if the Minister is satisfied that

    (a) the authorized foreign bank will be capable of making a contribution to the financial system in Canada; and

    (b) treatment as favourable for banks to which this Act applies exists or will be provided in the jurisdiction in which the authorized foreign bank principally carries on business, either directly or through a subsidiary.

Consultation with Superinten-
dent

(4) The Minister may make an order only if the Minister is of the opinion, after consultation with the Superintendent, that

    (a) the applicant is a bank in the jurisdiction under whose laws it was incorporated and is regulated in a manner acceptable to the Superintendent; and

    (b) the applicant's principal activity is the provision of services that would be permitted by this Act if they were provided by a bank in Canada.

Application procedure

525. (1) An application for an order under subsection 524(1) shall be filed with the Superintendent, together with any other information, material and evidence that the Superintendent may require.

Publishing notice of intent

(2) Before filing an application, a foreign bank applicant shall, at least once a week for a period of four consecutive weeks, publish, in a form satisfactory to the Superintendent, a notice of intention to make the application in the Canada Gazette and in a newspaper in general circulation at or near the place where its principal office is to be situated.

Objections

(3) A person who objects to the proposed order may, within thirty days after the date of the last publication under subsection (2), submit the objection in writing to the Superintendent.

Minister to be informed

(4) On receipt of an objection, the Superintendent shall inform the Minister of it.

Inquiry into objection and report

(5) On receipt of an objection, and if the application for the order has been received, the Superintendent shall, if satisfied that it is necessary and in the public interest to do so, hold or cause to be held a public inquiry into the objection as it relates to the application and, on completion of the inquiry, the Superintendent shall report the findings of the inquiry to the Minister.

Report to be made available

(6) Within thirty days after receiving the report, the Minister shall make it available to the public.

Rules governing proceedings

(7) Subject to the approval of the Governor in Council, the Superintendent may make rules governing the proceedings at public inquiries held under this section.

Factors to be considered by Minister

526. Before making an order under subsection 524(1), the Minister shall take into account all matters that the Minister considers relevant to the application and, without limiting the generality of the foregoing, the Minister shall have particular regard to

    (a) the nature and sufficiency of the financial resources of the foreign bank as a source of continuing financial support for the carrying on of its business in Canada;

    (b) the soundness and feasibility of plans of the foreign bank for the future conduct and development of its business in Canada;

    (c) the business record and past performance of the foreign bank;

    (d) whether the business in Canada of the proposed authorized foreign bank will be carried on responsibly by persons who are fit as to the character, competence and experience suitable for involvement in its operations; and

    (e) the best interests of the financial system in Canada.

Contents of order

527. (1) An order made under subsection 524(1) shall set out

    (a) the name of the authorized foreign bank and, where applicable, the name under which it is permitted to carry on business in Canada;

    (b) the place in Canada where the principal office of the authorized foreign bank is to be situated;

    (c) whether the authorized foreign bank is subject to any restrictions and requirements referred to in subsection 524(2); and

    (d) the date on which the order becomes effective.

Provisions of order

(2) The Minister may set out in the order any provision not contrary to this Act that the Minister considers advisable in order to take into account the particular circumstances of the proposed authorized foreign bank with respect to the carrying on of business in Canada.

Terms and conditions

(3) The Minister may impose any terms and conditions in respect of the order that the Minister considers appropriate.

Notice of order

(4) The Superintendent shall cause to be published in the Canada Gazette a notice of the making of the order.

Amended order

528. (1) On application by an authorized foreign bank, the Minister may, by further order,

    (a) change the name under which it is permitted to carry on business in Canada or the place in Canada where its principal office is to be situated as that name or place is set out in the order made under subsection 524(1) or in any other order made under this section;

    (b) add any provision referred to in subsection 527(2) or any term or condition referred to in subsection 527(3) or change or remove any of those provisions, terms or conditions that are included in the order made under subsection 524(1) or in any other order made under this section; or

    (c) add or remove the restrictions and requirements referred to in subsection 524(2).

Notice of intention

(2) Before making an application under subsection (1), the authorized foreign bank must publish a notice of intention to make the application at least once a week for a period of four consecutive weeks in the Canada Gazette and in a newspaper of general circulation at or near the place where its principal office is situated.

Transitional

529. (1) Subject to this section but notwithstanding any other provision of this Act or the regulations, the Minister may, on the recommendation of the Superintendent, by order, grant an authorized foreign bank permission to

    (a) engage in a business activity specified in the order that an authorized foreign bank is not otherwise permitted by this Part to engage in;

    (b) have liabilities that an authorized foreign bank is not otherwise permitted by this Part to have, if the authorized foreign bank or an affiliate of the authorized foreign bank had those liabilities at the time an application for an order under subsection 524(1) was made;

    (c) hold assets that an authorized foreign bank is not otherwise permitted by this Part to hold, if the assets were held, at the time an application for an order under subsection 524(1) was made, by the authorized foreign bank or an affiliate of the authorized foreign bank;

    (d) acquire and hold assets that an authorized foreign bank is not otherwise permitted by this Part to acquire or hold if the authorized foreign bank was obliged, at the time an application for an order under subsection 524(1) was made, to acquire those assets;

    (e) in the case of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2), continue to hold a substantial investment in

      (i) a foreign bank subsidiary, where the Minister has approved an application for voluntary liquidation and dissolution made by the foreign bank subsidiary pursuant to section 344, or

      (ii) a company to which the Trust and Loan Companies Act applies, where the Minister has approved an application for voluntary liquidation and dissolution made by the company pursuant to section 349 of that Act;

    (f) in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), carry on business in Canada without having to deposit assets having a value of at least ten million dollars, as required by subparagraph 534(3)(a)(ii) and subparagraph 582(1)(b)(i), where the authorized foreign bank continues to hold a substantial investment in

      (i) a foreign bank subsidiary and the Minister has approved an application for voluntary liquidation and dissolution made by the foreign bank subsidiary pursuant to section 344, or

      (ii) a company to which the Trust and Loan Companies Act applies and the Minister has approved an application for voluntary liquidation and dissolution made by the company pursuant to section 349 of that Act; or

    (g) maintain outside Canada any records or registers required by this Act to be maintained in Canada and maintain and process outside Canada information and data relating to the preparation and maintenance of those records or registers.

Restriction

(2) An order under subsection (1) may not be made if the effect of the order would be to permit an authorized foreign bank to

    (a) contravene section 545, in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2); or

    (b) have deposit liabilities so as to cause the authorized foreign bank to be in contravention of section 540, in the case of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2).

Duration

(3) Permission granted under subsection (1) shall be expressed to be granted for a period specified in the order not exceeding

    (a) with respect to any activity described in paragraph (1)(a), thirty days after the day on which an order made under subsection 524(1) becomes effective in respect of the authorized foreign bank or, where the activity is conducted pursuant to an agreement existing on that day, on the expiration of the agreement;

    (b) with respect to any matter described in paragraph (1)(b), ten years; and

    (c) with respect to any matter described in any of paragraphs (1)(c) to (g), two years.

Renewal

(4) Subject to subsection (5), the Minister may, on the recommendation of the Superintendent, by order, renew permission granted under subsection (1) with respect to any matter described in paragraphs (1)(b) to (f) for any further period or periods that the Minister considers necessary.

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