Bill C-38

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First Reading

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Filing	(2) A bank shall, in the manner and at the time prescribed, file a copy of the statement with the Commissioner.
Provision of statement to public	(3) A bank shall, in the manner and at the time prescribed, disclose the statement to its customers and to the public.
Regulations	(4) The Governor in Council may make regulations prescribing
	(a) the name, contents and form of the statement referred to in subsection (1) and the time within which it must be prepared;
	(b) affiliates of a bank referred to in subsection (1);
	(c) the manner and time in which a statement must be filed under subsection (2); and
	(d) the manner and time in which a statement mentioned in subsection (3) is to be disclosed, respectively, to a bank's customers and to the public.
Regulations re disclosure	459.4 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by banks or any prescribed class of banks, including regulations respecting
	(a) the information that must be disclosed, including information relating to
	(i) any product or service or prescribed class of products or services offered by them,
	(ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services,
	(iii) anything they are required to do or to refrain from doing under a consumer provision, and
	(iv) any other matter that may affect their dealings with customers or the public;
	(b) the manner, place and time in which and the persons to whom information is to be disclosed; and
	(c) the content and form of any advertisement by banks or any prescribed class of banks relating to any matter referred to in paragraph (a).
Affiliates	459.5 A bank shall not enter into any arrangement or otherwise cooperate with any of its affiliates that is controlled by a bank or a bank holding company and that is a finance entity as defined in subsection 464(1) or other prescribed entity to sell or further the sale of a product or service of the bank or the affiliate unless the affiliate complies with the following provisions as if it were a bank:
	(a) sections 449 to 455, subsections 455.1(2), 458(1) and (3) and section 459.1; and
	(b) section 456 to the extent that it is applicable to the activities of the affiliate.
	120. Section 462 of the Act is replaced by the following:
Effect of writ, etc.	462. (1) Subject to subsections (3) and (4), the following documents are binding on property belonging to a person and in the possession of a bank, or on money owing to a person by reason of a deposit account in a bank, only where the document or a notice of it is served at the branch of the bank that has possession of the property or that is the branch of account in respect of the deposit account, as the case may be:
	(a) a writ or process originating a legal proceeding or issued in or pursuant to a legal proceeding;
	(b) an order or injunction made by a court;
	(c) an instrument purporting to assign, perfect or otherwise dispose of an interest in the property or the deposit account; or
	(d) a notice of a support order or support provision.
Notices	(2) Any notification sent to a bank with respect to a customer of the bank, other than a document referred to in subsection (1) or (3) , constitutes notice to the bank and fixes the bank with knowledge of its contents only if sent to and received at the branch of the bank that is the branch of account of an account held in the name of that customer.
Support orders and support provisions	(3) A notice of a support order or support provision may be served at an office of a bank designated by the regulations in respect of a province if the order or provision can be enforced under the laws of that province.
Effect of service	(4) A notice of a support order or support provision served under subsection (3) at a designated office of a bank in a province does not have effect until the second day following the day of service.
Regulations	(5) The Governor in Council may make regulations
	(a) designating, in relation to any bank, a place in any province for the service of notices of support orders and support provisions under subsection (3);
	(b) prescribing the manner in which a bank shall publicize the locations of designated offices of the bank; and
	(c) respecting the information that must accompany notices of support orders and support provisions.
Definitions	(6) The definitions in this subsection apply in this section.
``designa- ted office'' « bureau désigné »	``designated office'' means a place designated under subsection (3);
``support order'' « ordonnance alimentaire »	``support order'' means an order or judgment or interim order or judgment for family financial support, or any process under the laws of a province for the enforcement of any such order or judgment;
``support provision'' « disposition alimentaire »	``support provision'' means a provision of an agreement relating to the payment of maintenance or family financial support.
1991, c. 46, s. 603; 1993, c. 34, s. 9(F); 1997, c. 15, ss. 56 to 66; 1999, c. 28, s. 26	121. Sections 464 to 484 of the Act are replaced by the following:
Definitions	464. (1) The definitions in this subsection apply in this Part.
``factoring entity'' « entité s'occupant d'affactu- rage »	``factoring entity'' means a factoring entity as defined in the regulations.
``finance entity'' « entité s'occupant de financement »	``finance entity'' means a finance entity as defined in the regulations.
``financial leasing entity'' « entité s'occupant de crédit-bail »	``financial leasing entity'' means an entity
	(a) the activities of which are limited to the financial leasing of personal property and such related activities as are prescribed and whose activities conform to such restrictions and limitations thereon as are prescribed; and
	(b) that, in conducting the activities referred to in paragraph (a) in Canada, does not
	(i) direct its customers or potential customers to particular dealers in the leased property or the property to be leased,
	(ii) enter into lease agreements with persons in respect of any motor vehicle having a gross vehicle weight, as that expression is defined by the regulations, of less than twenty-one tonnes, or
	(iii) enter into lease agreements with natural persons in respect of personal household property, as that expression is defined by the regulations.
``loan'' « prêt » ou « emprunt »	``loan'' includes an acceptance, endorsement or other guarantee, a deposit, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit but does not include investments in securities.
``motor vehicle'' « véhicule à moteur »	``motor vehicle'' means a motorized vehicle designed to be used primarily on a public highway for the transportation of persons or things, but does not include
	(a) a fire-engine, bus, ambulance or utility truck; or
	(b) any other special purpose motorized vehicle that contains significant special features that make it suitable for a specific purpose.
``mutual fund distribution entity'' « courtier de fonds mutuels »	``mutual fund distribution entity'' means an entity whose principal activity is acting as a selling agent of units, shares or other interests in a mutual fund and acting as a collecting agent in the collection of payments for any such interests if
	(a) the proceeds of the sales of any such interests, less any sales commissions and service fees, are paid to the mutual fund; and
	(b) the existence of a sales commission and service fee in respect of the sale of any such interest is disclosed to the purchaser of the interest before the purchase of the interest.
``mutual fund entity'' « entité s'occupant de fonds mutuels »	``mutual fund entity'' means an entity
	(a) whose activities are limited to the investing of the funds of the entity so as to provide investment diversification and professional investment management to the holders of its securities; and
	(b) whose securities entitle their holders to receive, on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the whole or in a part of its net assets, including a separate fund or trust account of the entity.
``participating share'' « action partici- pante »	``participating share'' means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution.
``permitted entity'' « entité admissible »	``permitted entity'' means an entity in which a bank is permitted to acquire a substantial investment under section 468.
``prescribed subsidiary'' « filiale réglementai- re »	``prescribed subsidiary'' means a subsidiary that is one of a prescribed class of subsidiaries.
``real property brokerage entity'' « courtier immobilier »	``real property brokerage entity'' means an entity that is primarily engaged in
	(a) acting as an agent for vendors, purchasers, mortgagors, mortgagees, lessors or lessees of real property; and
	(b) the provision of consulting or appraisal services in respect of real property.
``specialized financing entity'' « entité s'occupant de financement spécial »	``specialized financing entity'' means a specialized financing entity as defined in the regulations.
Members of a bank's group	(2) For the purpose of this Part, a member of a bank's group is any of the following:
	(a) an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank;
	(b) a subsidiary of the bank or of an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank;
	(c) an entity in which the bank, or an entity referred to in any of paragraphs 468(1)(a) to (f) that controls the bank, has a substantial investment; or
	(d) a prescribed entity in relation to the bank.
Non-applicati on of Part	(3) This Part does not apply in respect of
	(a) the holding of a security interest in real property, unless the security interest is prescribed under paragraph 479 (a) to be an interest in real property; or
	(b) the holding of a security interest in securities of an entity.
	General Constraints on Investments
Investment standards	465. The directors of a bank shall establish and the bank shall 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.
Restriction on control and substantial investments	466. (1) Subject to subsections (2) to (4) , no bank shall acquire control of , or hold, acquire or increase a substantial investment in, any entity other than a permitted entity.
Exception: indirect investments	(2) A bank may acquire control of , or acquire or increase a substantial investment in, an entity other than a permitted entity by way of
	(a) an acquisition of control of an entity referred to in any of paragraphs 468(1)(a) to (j), or of a prescribed entity, that controls or has a substantial investment in the entity ; or
	(b) an acquisition of shares or ownership interests in the entity by
	(i) an entity referred to in any of paragraphs 468(1)(a) to (j), or a prescribed entity , that is controlled by the bank, or
	(ii) an entity controlled by an entity referred to in any of paragraphs 468(1)(a) to (j), or a prescribed entity , that is controlled by the bank.
Exception: temporary investments, realizations and loan workouts	(3) A bank may acquire control of , or acquire or increase a substantial investment in, an entity by way of
	(a) a temporary investment permitted by section 471;
	(b) an acquisition of shares of a body corporate or of ownership interests in an unincorporated entity permitted by section 472; or
	(c) a realization of security permitted by section 473.
Exception: specialized financing regulations	(4) A bank may acquire control of , or hold, acquire or increase a substantial investment in, an entity other than a permitted entity if it does so in accordance with regulations made under paragraph 467(d) concerning specialized financing.
Exception: uncontrolled event	(5) A bank is deemed not to contravene subsection (1) if the bank acquires control of, or acquires or increases a substantial investment in, an entity solely as the result of an event not within the control of the bank.
Regulations re limits	467. The Governor in Council may make regulations
	(a) respecting the determination of the amount or value of loans, investments and interests for the purposes of this Part;
	(b) respecting the loans and investments, and the maximum aggregate amount of all loans and investments, that may be made or acquired by a bank and its prescribed subsidiaries to or in a person and any persons connected with that person;
	(c) specifying the classes of persons who are connected with any person for the purposes of paragraph (b); and
	(d) concerning specialized financing for the purposes of subsection 466(4).

Bill C-38

General Constraints on Investments