Bill C-38

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First Reading

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	(a.2) to the Canada Deposit Insurance Corporation for purposes related to its operation, and
	316. The Act is amended by adding the following after section 435.1:
Publication	435.2 The Superintendent shall cause to be published in the Canada Gazette the information contained in each of the returns made under sections 431.1 and 431.2 within sixty days after the expiration of the time provided by this Act for providing the return.
1996, c. 6, s. 57	317. Section 436.3 of the Act is replaced by the following:
Report respecting disclosure	436.3 The Superintendent shall prepare a report, to be included in the report referred to in section 40 of the Office of the Superintendent of Financial Institutions Act, respecting the disclosure of information by associations and describing the state of progress made in enhancing the disclosure of information in the financial services industry.
	318. Subsection 437(1) of the Act is replaced by the following:
Examination of associations	437. (1) The Superintendent, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry into the business and affairs of each association that the Superintendent considers to be necessary or expedient to determine whether the association is complying with the provisions of this Act and whether the association is in a sound financial condition and, after the conclusion of each examination and inquiry, shall report on it to the Minister.
	*319. The Act is amended by adding the following after the heading ``Remedial Powers'' after section 438:*
	Prudential Agreements
Prudential agreement	438.1 The Superintendent may enter into an agreement, called a ``prudential agreement'', with an association for the purposes of implementing any measure designed to maintain or improve its safety and soundness.
	320. Subsection 441(1) of the Act is replaced by the following:
Court enforcement	441. (1) Where an association or person
	(a) is contravening or has failed to comply with a prudential agreement entered into under section 438.1 or a direction of the Superintendent issued to the association or person pursuant to subsection 439(1) or (3),
	(b) is contravening this Act, or
	(c) has omitted to do any thing under this Act that is required to be done by or on the part of the association or person,
	the Superintendent may, in addition to any other action that may be taken under this Act, apply to a court for an order requiring the association or person to comply with the prudential agreement or the direction, cease the contravention or do any thing that is required to be done, and on such application the court may so order and make any other order it thinks fit.
1996, c. 6, s. 59	321. The heading before section 441.1 of the Act is replaced by the following:
	Disqualification and Removal of Directors or Senior Officers
Meaning of ``senior officer''	441.01 In sections 441.1 and 441.2, ``senior officer'' means the chief executive officer, secretary, treasurer, controller of an association or any other officer reporting directly to the association's board of directors or chief executive officer.
1996, c. 6, s. 59	322. (1) Paragraphs 441.1(1)(a) and (b) of the Act are replaced by the following:
	(a) that has been notified by the Superintendent that this section applies to it where the association is subject to measures designed to maintain or improve its safety and soundness, which measures
	(i) have been specified by the Superintendent by way of conditions or limitations in respect of the order approving the commencement and carrying on of the association's business, or
	(ii) are contained in a prudential agreement entered into under section 438.1 or an undertaking given by the association to the Superintendent; or
	(b) that is the subject of a direction made under section 439 or an order made under subsection 409(3).
1996, c. 6, s. 59	(2) Paragraph 441.1(2)(b) of the Act is replaced by the following:
	(b) each person who has been selected by the association for appointment as a senior officer ,
1996, c. 6, s. 59	(3) The portion of subsection 441.1(2) of the French version of the Act after paragraph (b) is replaced by the following:
	Elle lui communique également les renseignements personnels qui les concernent et les renseignements sur leur expérience et leur dossier professionnel qu'il peut exiger .
1996, c. 6, s. 59	(4) Subsections 441.1(4) and (5) of the Act are replaced by the following:
Disqualifi- cation	(4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold that position, the Superintendent may, by order, disqualify the person from being elected or appointed as a director of an association or from being appointed as a senior officer .
Risk of prejudice	(4.1) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the depositors and creditors of the association would likely be prejudiced if the person were to take office or continue to hold office, as the case may be.
Representa- tions may be made	(5) The Superintendent must in writing notify the person concerned and the association of any action that the Superintendent proposes to take under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows , to make representations to the Superintendent in relation to the matter.
	323. The Act is amended by adding the following after section 441.1:
Removal of directors or senior officers	441.2 (1) The Superintendent may, by order, remove a person from office as a director or senior officer of an association if the Superintendent is of the opinion that the person is not suitable to hold that office
	(a) on the basis of the competence, business record, experience, conduct or character of the person; or
	(b) because the person has contravened or, by action or negligence, has contributed to the contravention of
	(i) this Act or the regulations made under it,
	(ii) a direction made under section 439,
	(iii) an order made under subsection 409(3),
	(iv) a condition or limitation in respect of the order approving the commencement and carrying on of the association's business, or
	(v) a prudential agreement entered into under section 438.1 or an undertaking given by the association to the Superintendent.
Risk of prejudice	(2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors and creditors of the association have been or are likely to be prejudiced by the person's holding office as a director or senior officer.
Representa- tions may be made	(3) The Superintendent must in writing notify the person concerned and the association of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.
Suspension	(4) If the Superintendent is of the opinion that the public interest may be prejudiced by the director or senior officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the director or senior officer. The suspension may not extend beyond 10 days after the expiration of that period.
Notice of order	(5) The Superintendent shall, without delay, notify the director or senior officer, as the case may be, and the association of a removal order or suspension order.
Consequences of removal order	(6) The director or senior officer, as the case may be, ceases to hold that office as of the date the removal order is made or any later date specified in the order.
Appeal	(7) The director or senior officer, as the case may be, or the association may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.
Powers of Federal Court	(8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.
Order not stayed by appeal	(9) A removal order is not stayed by an appeal.
1996, c. 6, s. 60	324. (1) Paragraphs 442(1.1)(b) to (f) of the Act are replaced by the following:
	(c) the assets of the association are not, in the opinion of the Superintendent, sufficient to give adequate protection to its depositors and creditors;
	(d) any asset appearing on the books or records of the association or held under the administration of the association is not, in the opinion of the Superintendent, satisfactorily accounted for;
	(e) the regulatory capital of the association has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its depositors and creditors;
	(f) the association has failed to comply with an order of the Superintendent under paragraph 409(3)(a);
	(g) in the case of a retail association, the association's deposit insurance has been terminated by the Canada Deposit Insurance Corporation; or
	(h) in the opinion of the Superintendent, any other state of affairs exists in respect of the association that may be materially prejudicial to the interests of the depositors or creditors of the association or to those of the owners of any assets under the association's administration.
	(2) Subsection 442(2) of the Act is replaced by the following:
Objectives of Superinten- dent	(2) If , pursuant to subsection (1), the Superintendent has control of the assets of an association referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the association.
	325. The Act is amended by adding the following after section 452:
	PART XIII.1
	REGULATION OF RETAIL ASSOCIATIONS - COMMISSIONER
Required information	452.1 A retail association shall provide the Commissioner with the information at the times and in the form that the Commissioner may require for the purposes of the administration of the consumer provisions.
Confidential information	452.2 (1) Subject to subsection (2), information regarding the business or affairs of a retail association or regarding persons dealing with one that is obtained by the Commissioner or by any person acting under the direction of the Commissioner, in the course of the exercise or performance of powers, duties and functions referred to in subsection 5(1) of the Financial Consumer Agency of Canada Act, and any information prepared from that information, is confidential and shall be treated accordingly.
Disclosure permitted	(2) If the Commissioner is satisfied that the information will be treated as confidential by the agency, body or person to whom it is disclosed, subsection (1) does not prevent the Commissioner from disclosing it
	(a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;
	(b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;
	(c) to the Canada Deposit Insurance Corporation for purposes related to its operation; and
	(d) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions.
Examination	452.3 (1) The Commissioner, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry that the Commissioner considers necessary for the purposes of satisfying the Commissioner that the applicable consumer provisions are being complied with and, after the conclusion of each examination and inquiry, shall report on it to the Minister.
Access to records of retail association	(2) The Commissioner or a person acting under the Commissioner's direction in carrying out his or her duties under subsection (1)
	(a) has a right of access to any records, including electronic records, of a retail association; and
	(b) may require the directors or officers of a retail association to provide information and explanations, to the extent that they are reasonably able to do so, in respect of any matter subject to examination or inquiry under subsection (1).
Power of Commissioner on inquiry	452.4 The Commissioner, in carrying out his or her duties in relation to consumer provisions, has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Commissioner's direction.
Compliance agreement	452.5 The Commissioner may enter into an agreement, called a ``compliance agreement'', with a retail association for the purposes of implementing any measure designed to further compliance by it with the consumer provisions.
	326. The Act is amended by adding the following after section 459.1:

Bill C-38

PART XIII.1

REGULATION OF RETAIL ASSOCIATIONS - COMMISSIONER