Bill C-67

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Contacting Superinten- dent	574. (1) An authorized foreign bank shall, in the prescribed manner, provide its customers who have complaints with respect to their deposit accounts or payment, credit or charge cards or the disclosure of or manner of calculating the cost of borrowing in respect of a loan with prescribed information on how they may contact the Office of the Superintendent of Financial Institutions.
Report	(2) 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 complaints referred to in subsection (1) of customers who have exhausted the complaint procedures established by authorized foreign banks pursuant to paragraph 573(1)(a) and who have contacted the Superintendent with respect to their complaints.
Contents of report	(3) The report shall include information respecting the complaint procedures established by authorized foreign banks under paragraph 573(1)(a), the role of the Superintendent respecting complaints and the number, nature and disposition of the complaints.
	Miscellaneous
Prepayment protected	575. (1) An authorized foreign bank shall not make a loan to a natural person that is repayable in Canada, the terms of which prohibit prepayment of the money advanced or any instalment on the money advanced before its due date.
Minimum balance	(2) Except by express agreement between the authorized foreign bank and the borrower, the making in Canada of a loan or advance by an authorized foreign bank to a borrower shall not be subject to a condition that the borrower maintain a minimum credit balance with the authorized foreign bank.
Non-applicati on of subsection (1)	(3) Subsection (1) does not apply in respect of a loan
	(a) that is secured by a mortgage on real property; or
	(b) the principal amount of which is in excess of one hundred thousand dollars or any other amount that may be prescribed.
Government cheques	(4) An authorized foreign bank shall not make a charge
	(a) for cashing a cheque or other instrument drawn on the Receiver General or on the Receiver General's account in the Bank of Canada, or in any bank or other deposit-taking Canadian financial institution incorporated by or under an Act of Parliament or in any authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), in respect of its business in Canada;
	(b) for cashing any other instrument issued as authority for the payment of money out of the Consolidated Revenue Fund; or
	(c) in respect of any cheque or other instrument that is
	(i) drawn in favour of the Receiver General, the Government of Canada or any department of the Government of Canada or any public officer acting in the capacity of a public officer, and
	(ii) tendered for deposit to the credit of the Receiver General.
Deposits of Government of Canada	(5) Nothing in subsection (4) precludes any arrangement between the Government of Canada and an authorized foreign bank concerning
	(a) compensation for services performed by the authorized foreign bank for the Government of Canada; or
	(b) interest to be paid on any or all deposits of the Government of Canada with the authorized foreign bank.
Regulations re customer information	576. The Governor in Council may make regulations
	(a) requiring an authorized foreign bank to establish procedures regarding the collection, retention, use and disclosure of information about its customers or any class of its customers;
	(b) requiring an authorized foreign bank to establish procedures for dealing with complaints made by a customer about the collection, retention, use or disclosure of information about the customer;
	(c) respecting the disclosure by an authorized foreign bank of information relating to the procedures referred to in paragraphs (a) and (b);
	(d) requiring an authorized foreign bank to designate officers and employees in Canada of the authorized foreign bank who are responsible for
	(i) implementing the procedures referred to in paragraph (b), and
	(ii) receiving and dealing with complaints made by a customer of the authorized foreign bank about the collection, retention, use or disclosure of information about the customer;
	(e) requiring an authorized foreign bank to report information relating to
	(i) complaints made by its customers about the collection, retention, use or disclosure of information, and
	(ii) the actions taken by the authorized foreign bank to deal with the complaints; and
	(f) defining ``information'', ``collection'' and ``retention'' for the purposes of paragraphs (a) to (e) and the regulations made under those paragraphs.
Restriction on tied selling	576.1 (1) An authorized foreign bank shall not impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the authorized foreign bank and any of its affiliates, as a condition for obtaining a loan from the authorized foreign bank.
Favourable loan tied to other sale	(2) For greater certainty, an authorized foreign bank may offer to make a loan to a person on more favourable terms or conditions than the authorized foreign bank would otherwise offer to a borrower, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from any particular person.
Favourable other sale tied to loan	(3) For greater certainty, an authorized foreign bank or one of its affiliates may offer a product or service to a person on more favourable terms or conditions than the authorized foreign bank or affiliate would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain a loan from the authorized foreign bank.
Approval	(4) An authorized foreign bank may require that a product or service obtained by a borrower from a particular person as security for a loan from the authorized foreign bank meet with the authorized foreign bank's approval. The approval shall not be unreasonably withheld.
Regulations	(5) The Governor in Council may make regulations
	(a) specifying types of conduct or transactions that shall be considered undue pressure or coercion for the purpose of subsection (1); and
	(b) specifying types of conduct or transactions that shall be considered not to be undue pressure or coercion for the purpose of subsection (1).
Transmission in case of death	577. (1) Where the transmission of a debt owing by an authorized foreign bank by reason of a deposit, of property held by an authorized foreign bank as security or for safe-keeping or of rights with respect to a safety deposit box and property deposited in it takes place because of the death of a person, the delivery to the authorized foreign bank of the following is sufficient justification and authority for giving effect to the transmission in accordance with the claim:
	(a) an affidavit or declaration in writing in form satisfactory to the authorized foreign bank signed by or on behalf of a person claiming by virtue of the transmission stating the nature and effect of the transmission; and
	(b) one of the following, namely,
	(i) if the claim is based on a will or other testamentary instrument or on a grant of probate of a will or testamentary instrument or on such a grant and letters testamentary or other document of like import or on a grant of letters of administration or other document of like import, purporting to be issued by any court or authority in Canada or elsewhere, an authenticated copy or certificate of the document under the seal of the court or authority without proof of the authenticity of the seal or other proof, or
	(ii) if the claim is based on a notarial will, an authenticated copy of the notarial will.

Evidence of transmission	(2) Nothing in subsection (1) shall be construed to prevent an authorized foreign bank from refusing to give effect to a transmission until there has been delivered to the authorized foreign bank any documentary or other evidence of or in connection with the transmission that it may consider necessary.
Branch of account with respect to deposits	578. (1) For the purposes of this Act, the branch of account with respect to a deposit account is
	(a) the branch the address or name of which appears on the specimen signature card or other signing authority signed by a depositor with respect to the deposit account or that is designated by agreement between the authorized foreign bank and the depositor at the time of opening of the deposit account; or
	(b) if no branch has been identified or agreed on as provided in paragraph (a), the branch that is designated as the branch of account with respect to the deposit account by the authorized foreign bank by notice in writing to the depositor.
Where debt payable	(2) The amount of any debt owing by an authorized foreign bank by reason of a deposit in a deposit account in the authorized foreign bank is payable to the person entitled to the amount only at the branch of account and the person is not entitled to demand payment or to be paid at any other branch of the authorized foreign bank.
Exception where authorization	(3) Notwithstanding subsection (2), an authorized foreign bank may permit either occasionally or as a regular practice, the person to whom it is indebted by reason of a deposit in a deposit account in the authorized foreign bank to withdraw money owing by reason of the deposit at a branch of the authorized foreign bank other than the branch of account or to draw cheques or other orders for the payment of the money at a branch other than the branch of account.
Situs of indebtedness	(4) The indebtedness of an authorized foreign bank by reason of a deposit in a deposit account in the authorized foreign bank is deemed for all purposes to be situated at the place where the branch of account is situated.
Non-applicati on of subsection (2)	(5) Subsection (2) does not apply where the business in Canada of the authorized foreign bank is being wound up under the Winding-up and Restructuring Act.
Effect of writ, etc.	579. (1) A writ or process originating a legal proceeding or issued in, or in pursuance of, a legal proceeding, or an order or injunction made by a court or a notice by any person purporting to assign, perfect or otherwise dispose of an interest in any property or in any deposit account affects and binds only property in the possession of an authorized foreign bank belonging to a person at the branch where the writ, process, order, injunction or notice or notice of any of those documents is served and, in the case of a deposit account in an authorized foreign bank, affects only money owing to a person by reason of the deposit account if the branch on which the writ, process, order, injunction or notice or notice of any of those documents is served is the branch of account in respect of the deposit account.
Notices	(2) Any notification sent to an authorized foreign bank with respect to a customer of the authorized foreign bank, other than a document referred to in subsection (1), constitutes notice to the authorized foreign bank and fixes it with knowledge of the contents of the notification only if sent to and received at the branch of the authorized foreign bank that is the branch of account of an account held by the authorized foreign bank in the name of that customer.
Deemed loan	580. For the purposes of sections 425 to 436, as incorporated by section 555, where an authorized foreign bank accepts a bill of exchange drawn on it and not payable on demand or pays or makes money available for the payment of such a bill of exchange, or issues a guarantee, or otherwise makes a promise to effect a payment, the authorized foreign bank is deemed to lend money or make an advance.
Investment standards	581. An authorized foreign bank shall establish and adhere to investment and lending policies, standards and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and obtain a reasonable return.
	Deposit Requirements
Requirement to maintain assets on deposit	582. (1) An authorized foreign bank shall maintain on deposit in Canada with a Canadian financial institution approved by the Superintendent unencumbered assets of a type approved by the Superintendent the total value of which determined in accordance with the accounting principles referred to in subsection 308(4) shall equal
	(a) in the case of an authorized foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2), one hundred thousand dollars; and
	(b) in any other case, the greater of
	(i) ten million dollars, and
	(ii) five per cent of the liabilities of the authorized foreign bank in respect of its business in Canada.
Deposit agreement	(2) The assets referred to in subsection (1) shall be kept with the Canadian financial institution pursuant to a deposit agreement entered into with the prior approval of the Superintendent.
	Financial Year
Financial year	583. (1) The financial year of an authorized foreign bank in respect of its business in Canada may end on any of March 31, June 30, September 30 or December 31.
First financial year	(2) If the first financial year of an authorized foreign bank would end less than four months after the authorized foreign bank has obtained an order under subsection 534(1) approving the commencement and carrying on of business in Canada, the first financial year of the authorized foreign bank ends on March 31, June 30, September 30 or December 31, as the case may be, in the next calendar year.
	Auditors
	Interpretation
Definitions	584. In sections 585 to 596, the expressions ``firm of accountants'' and ``member'' have the meanings assigned to those expressions by section 313.
	Appointment
Appointment of auditor	585. (1) An authorized foreign bank shall appoint a firm of accountants as auditor for its business in Canada and shall notify the Superintendent in writing of the name and address and date of appointment of the auditor without delay after making the appointment.
Qualification of auditor	(2) A firm of accountants is qualified to be an auditor if
	(a) two or more of its members are accountants who
	(i) are members in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,
	(ii) have at least five years experience at a senior level in performing audits of a financial institution,
	(iii) are ordinarily resident in Canada, and
	(iv) are independent of the authorized foreign bank; and
	(b) the member of the firm jointly designated by the firm and the authorized foreign bank to conduct the audit of the authorized foreign bank on behalf of the firm is qualified in accordance with paragraph (a).
Independence	(3) For the purposes of subsection (2),
	(a) independence is a question of fact; and
	(b) a member of a firm of accountants is deemed not to be independent of an authorized foreign bank if that member, the firm or any other member of the firm
	(i) is a director, officer or employee of the authorized foreign bank or of any of its affiliates or is a business partner of any of those directors, officers or employees,
	(ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the authorized foreign bank or of any of its affiliates, or
	(iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the authorized foreign bank within the two years immediately preceding the proposed appointment of the firm of accountants as auditor, other than an affiliate that is a subsidiary of the authorized foreign bank acquired pursuant to subsection 519(2).
Notice of designation	(4) Within fifteen days after the appointment of a firm of accountants as auditor, the authorized foreign bank and the firm shall jointly designate a member of the firm who meets the qualifications described in paragraph (2)(a) to conduct an audit under subsection 592(1) on behalf of the firm and shall without delay notify the Superintendent in writing of the designation.
New designation	(5) Where for any reason the member designated under subsection (4) to conduct an audit ceases to conduct the audit, the authorized foreign bank and the firm of accountants may jointly designate another member of the same firm who meets the qualifications described in paragraph (2)(a) to conduct the audit and the authorized foreign bank shall without delay notify the Superintendent in writing of the designation.
Deemed vacancy	(6) In any case where subsection (5) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit, there shall be deemed to be a vacancy in the office of auditor of the authorized foreign bank.

Bill C-67

Miscellaneous

Deposit Requirements

Financial Year

Auditors