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Bill C-38

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Transitional

Transitional

522.1 (1) An order that was made, and not revoked, by the Minister under subsection 507(4) of the Act as it read immediately before the coming into force of this section, continues in force subject to variation or revocation by further order of the Minister.

Transitional

(2) A variation or revocation takes effect three months after the date the further order is made unless the Minister and the entity to which it relates agree that the variation or revocation shall take effect at another time.

Transitional

(3) The Minister shall publish in the Canada Gazette a notice of an order of revocation made under this section.

Transitional

522.2 A foreign bank is deemed to be the subject of an order under section 507.1 if, immediately before the coming into force of that section, the foreign bank had received consent under subsection 521(1), the consent had not been revoked and the foreign bank or an entity associated with it was not designated under subsection 521(1.06), as those subsections read immediately before the coming into force of section 507.1.

Transitional

522.3 The Minister may, by order, revoke or vary an order made under paragraph 518(3)(b) or subsection 521(1), as it read immediately before the coming into force of this section.

Transitional

522.4 (1) Notwithstanding subsections 518(1) and (2), but subject to subsection (2), where a foreign bank or an entity associated with a foreign bank received consent under subsection 521(1), as that subsection read immediately before the coming into force of this section, to acquire or hold control of, or a substantial investment in, a Canadian entity whose businesses or activities include any business or activity referred to in subsection 518(5) and an activity referred to in any of paragraphs 518(6)(a) to (d), and the consent has not been revoked, the foreign bank or entity associated with a foreign bank may continue to hold control of, or a substantial investment in, the Canadian entity.

Transitional

(2) Subsection (1) applies so long as

    (a) the Canadian entity restricts its businesses and activities in accordance with any terms and conditions in the consent under subsection 521(1), as that subsection read immediately before the coming into force of this section, or in an undertaking to the Minister or Superintendent, other than a term or condition that limits the size of the Canadian entity's assets; and

    (b) neither the foreign bank nor any entity associated with the foreign bank

      (i) is an authorized foreign bank, or

      (ii) controls or is a major shareholder of a bank or a bank holding company.

Transitional

(3) Notwithstanding subsections 518(1) and (2), a foreign bank or an entity associated with a foreign bank may hold control of, or a substantial investment in, a Canadian entity referred to in any of paragraphs 468(1)(g) to (i), or a Canadian entity referred to in subsection 518(5) whose business does not include any business or activity referred to in subsection 518(6), and the foreign bank or entity associated with a foreign bank is deemed to have received any required approvals under paragraphs 518.2(1)(a) to (e) in respect of that Canadian entity, if

    (a) it received the consent under subsection 521(1), as that subsection read immediately before the coming into force of this section, to acquire or hold control of, or a substantial investment in, the Canadian entity and the consent has not been revoked, or

    (b) it holds control of, or a substantial investment in, the Canadian entity by virtue of paragraph 518(3)(b), as that paragraph read immediately before the coming into force of this section, and any approval of the Minister has not been revoked,

and, within one year after the coming into force of this section, the foreign bank or entity associated with a foreign bank discloses to the Minister the nature of its businesses and activities on the date on which a bill was introduced in the House of Commons during the 2nd session of the 36th Parliament entitled An Act to establish the Financial Consumer Agency of Canada and to amend certain Acts in relation to financial institutions.

Transitional

(4) Notwithstanding subsections 518(1) and (2), but subject to subsection (5), where a foreign bank or an entity associated with a foreign bank holds, by virtue of paragraph 518(3)(b), as that paragraph read immediately before the coming into force of this section, control of, or a substantial investment in, a Canadian entity that is not a Canadian entity referred to in subsection 518(5), and any approval of the Minister under that paragraph has not been revoked, the foreign bank or an entity associated with a foreign bank may continue to hold control of, or a substantial investment in, the Canadian entity after the repeal of that paragraph.

Transitional

(5) Subsection (4) applies so long as

    (a) the Canadian entity restricts its businesses and activities in accordance with any terms or conditions in the Minister's approval under paragraph 518(3)(b), as that paragraph read immediately before the coming into force of this section, or in an undertaking to the Minister or Superintendent;

    (b) within one year after the coming into force of this section, the foreign bank or entity associated with a foreign bank discloses to the Minister the nature of its businesses and activities on the date on which a bill was introduced in the House of Commons during the 2nd session of the 36th Parliament entitled An Act to establish the Financial Consumer Agency of Canada and to amend certain Acts in relation to financial institutions;

    (c) after the coming into force of this section, the Canadian entity does not change the nature of its businesses and activities as of the date referred to in paragraph (b), and its businesses and activities remain in conformity with paragraph 518(3)(a), as that paragraph read immediately before the coming into force of this section; and

    (d) the Canadian entity does not engage in personal property leasing activities that a financial leasing entity is prohibited from engaging in.

Transitional

(6) Notwithstanding subsections 518(1) and (2), but subject to subsection (7), where a foreign bank or an entity associated with a foreign bank, on the coming into force of this section, holds control of, or a substantial investment in, a Canadian entity that is not referred to in subsection 518(5) and that is not held by virtue of paragraph 518(3)(b), as that paragraph read immediately before the coming into force of this section, the foreign bank or the entity associated with a foreign bank may continue to hold control of, or substantial investment in, the Canadian entity.

Transitional

(7) Subsection (6) applies so long as

    (a) within one year after the coming into force of this section, the foreign bank or entity associated with a foreign bank discloses to the Minister the nature of its businesses and activities on the date on which a bill was introduced in the House of Commons during the 2nd Session of the 36th Parliament entitled An Act to establish the Financial Consumer Agency of Canada and to amend certain Acts in relation to financial institutions;

    (b) after the coming into force of this section, the Canadian entity does not change the nature of its businesses and activities as of the date referred to in paragraph (a), and its businesses and activities remain in conformity with paragraph 518(3)(a), as it read immediately before the coming into force of this section;

    (c) the Canadian entity does not engage in personal property leasing activities that a financial leasing entity is prohibited from engaging in; and

    (d) where the foreign bank, or any entity associated with the foreign bank, is referred to in subsection 518(2), neither the foreign bank nor any entity associated with the foreign bank

      (i) is an authorized foreign bank, or

      (ii) controls or is a major shareholder of a bank or a bank holding company.

Transitional

(8) Paragraphs 508(1)(a) and (b) do not apply to a Canadian entity referred to in any of subsections (1), (3), (4) and (6).

1999, c. 28, ss. 35(1) and (2)

128. Subsection 524(3) of the Act is replaced by the following:

Reciprocal treatment

(3) The Minister may make an order only if the Minister is satisfied that, if the application is made by a non-WTO Member foreign bank, 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.

129. The Act is amended by adding the following after section 524:

Restriction

524.1 Despite subsection 524(1), the Minister shall not make an order permitting a foreign bank to establish a branch in Canada to carry on business in Canada if the foreign bank or an entity affiliated with the foreign bank

    (a) has control of or has a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in; or

    (b) engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in.

Prohibition

524.2 No authorized foreign bank and no entity affiliated with an authorized foreign bank may

    (a) control or have a substantial investment in an entity that engages in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in; or

    (b) engage in Canada in any personal property leasing activity that a financial leasing entity as defined in subsection 464(1) is prohibited from engaging in.

1999, c. 28, s. 35(1)

130. Section 526 of the Act is replaced by the following:

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, including

    (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) the reputation of the foreign bank for being operated in a manner that is consistent with the standards of good character and integrity;

    (e) whether the proposed authorized foreign bank will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;

    (f) the impact of any integration of the businesses and operations in Canada of the authorized foreign bank with those of its affiliates in Canada on the conduct of those businesses and operations; and

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

1999, c. 28, s. 35(1)

131. (1) Paragraphs 529(1)(e) and (f) of the Act are replaced by the following:

    (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 five million dollars, as required by subparagraphs 534(3)(a)(ii) and 582(1)(b)(i), where the authorized foreign bank continues to hold a substantial investment in

      (i) a bank that is a subsidiary of the foreign bank and the Minister has approved an application for voluntary liquidation and dissolution made by the subsidiary under 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 under section 349 of that Act; or

1999, c. 28, s. 35(1)

(2) Paragraph 529(5)(c) of the Act is replaced by the following:

(c) with respect to matters described in paragraph (1)(f), that purports to be effective more than seven years after the day on which an order made under subsection 534(1) becomes effective in respect of the authorized foreign bank.

1999, c. 28, s. 35(1)

132. Paragraph 530(1)(e) of the Act is replaced by the following:

    (e) reserved under section 43 for an existing or proposed bank or for an existing or proposed authorized foreign bank or under section 697 for an existing or proposed bank holding company.

1999, c. 28, s. 35(1)

133. Subparagraph 534(3)(a)(ii) of the Act is replaced by the following:

      (ii) in any other case, five million dollars or any greater amount that the Superintendent specifies;

1999, c. 28, s. 35(1)

134. (1) The portion of subsection 539(1) of the English version of the Act before paragraph (a) is replaced by the following:

Additional activities

539. (1) In addition, an authorized foreign bank may, in Canada,

1999, c. 28, s. 35(1)

(2) Paragraph 539(1)(b) of the Act is replaced by the following;

    (b) provide prescribed bank-related data processing services;

    (b.1) with the prior written approval of the Minister, engage in any of the following activities, namely,

      (i) collecting, manipulating and transmitting

        (A) information that is primarily financial or economic in nature,

        (B) information that relates to the business of a permitted entity, as defined in subsection 507(1), or

        (C) any other prescribed information,

      (ii) providing advisory or other services in the design, development or implementation of information management systems,

      (iii) designing, developing or marketing computer software, and

      (iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the authorized foreign bank is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services;

    (b.2) with the prior written approval of the Minister, develop, design, hold, manage or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used

      (i) to provide information that is primarily financial or economic in nature,

      (ii) to provide information that relates to the business of a permitted entity, as defined in subsection 507(1), or

      (iii) for a prescribed purpose or in prescribed circumstances;

    (b.3) engage in prescribed specialized business management or advisory services;

1999, c. 28, s. 35(1)

(3) Paragraphs 539(3)(a) and (b) of the Act are replaced by the following:

(a) respecting what an authorized foreign bank may or may not do with respect to the carrying on of the activities referred to in paragraphs (1)(b.1) to (b.3) ; and

    (b) imposing terms and conditions in respect of

      (i) the provision of financial services referred to in paragraph 538(2)(a) that are financial planning services,

      (ii) the provision of services referred to in paragraph 538(2)(c), and

      (iii) the carrying on of the activities referred to in any of paragraphs (1)(b.1) to (b.3) .

135. The Act is amended by adding the following after section 539:

Regulations apply

539.1 Regulations made for the purpose of any of sections 409 to 411 apply in respect of authorized foreign banks with any modifications that the circumstances require unless regulations made under subsection 539(3) provide otherwise.

1999, c. 28, s. 35(1)

135.1 Subparagraph 540(4)(a)(ii) of the Act is replaced by the following:

      (ii) a foreign bank that meets the conditions described in subparagraph 517(1)(a)(i) or (ii) ,

1999, c. 28, s. 35(1)

135.2 Paragraph 543(1)(a) of the Act is replaced by the following:

    (a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 507(1) or a prescribed entity and may enter into an arrangement with any person in respect of the provision of that service; or

1999, c. 28, s. 35(1)

136. Section 550 of the Act is replaced by the following:

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