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Bill C-38

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Appeals

Appeal to Federal Court

1020. (1) An appeal lies to the Federal Court from any direction of the Minister made under subsection 432(1) or 956(1) .

Powers

(2) The Federal Court may, in an appeal under subsection (1),

    (a) dismiss the appeal;

    (b) set aside the direction or decision; or

    (c) set aside the direction or decision and refer the matter back for re-determination.

Certificate

(3) For the purposes of an appeal under subsection (1), the Minister shall, at the request of the company, society, foreign company, provincial company, insurance holding company or person making the appeal, provide the company, society, foreign company, provincial company, insurance holding company or person with a certificate in writing setting out the direction or decision appealed from and the reasons why the direction or decision was made.

Regulations

Power to make regulations

1021. The Governor in Council may make regulations

    (a) prescribing anything that is required or authorized by this Act to be prescribed;

    (b) prescribing the way in which anything that is required or authorized by this Act to be prescribed is to be determined;

    (c) defining words and expressions to be defined for the purposes of this Act;

    (d) requiring the payment of a fee in respect of the filing, examining or issuing of any document or in respect of any action that the Superintendent is required or authorized to take under this Act, and fixing the amount of the fee or the manner of determining its amount;

    (e) respecting the regulatory capital and total assets of a company, a society, a provincial company or an insurance holding company ;

    (f) respecting the standards of sound business and financial practices for companies, societies, provincial companies and foreign companies;

    (g) respecting the retention, in Canada, of assets of a company, a society or an insurance holding company ;

    (h) respecting the value of assets of a company, a society or an insurance holding company to be held in Canada and the manner in which those assets are to be held;

    (i) respecting the protection and maintenance of assets of a company, a society or an insurance holding company , including regulations respecting the bonding of directors, officers and employees of a company, a society or an insurance holding company ;

    (j) respecting the holding of shares and ownership interests for the purposes of sections 74, 78 or 753 ;

    (k) respecting information, in addition to the information required by section 670 or 996 , to be maintained in the register referred to in that section; and

    (l) generally for carrying out the purposes and provisions of this Act.

Delegation

Delegation

1022. The Minister may delegate any of the Minister's powers, duties and functions under this Act to any Minister of State appointed under the Ministries and Ministers of State Act to assist the Minister.

PART XIX

SANCTIONS

Offence

1023. Every person who, without reasonable cause, contravenes any provision of this Act or the regulations is guilty of an offence.

Undue preference to creditor

1024. Every director, officer or employee of a company or a society who wilfully gives or concurs in giving to any creditor of the company or society any fraudulent, undue or unfair preference over other creditors, by giving security to the creditor, by changing the nature of the creditor's claim or otherwise, is guilty of an offence.

Failure to provide information

1025. Every person who, without reasonable cause, refuses or fails to comply with a requirement made under paragraph 674(3)(b) or 1000(3)(b) is guilty of an offence.

Use of name

1026. Except to the extent permitted by the regulations, every person who uses the name of a company or of an insurance holding company in a prospectus, offering memorandum, takeover bid circular, advertisement for a transaction related to securities or in any other document in connection with a transaction related to securities is guilty of an offence.

Punishment

1027. (1) Every person who is guilty of an offence under any of sections 1023 to 1026 is

    (a) in the case of a natural person, liable

      (i) on summary conviction, to a fine of not more than $100,000 or to imprisonment for a term of not more than twelve months, or to both, or

      (ii) on conviction on indictment, to a fine of not more than $500,000 or to imprisonment for a term of not more than five years, or to both; and

    (b) in the case of an entity, liable

      (i) on summary conviction, to a fine of not more than $500,000, or

      (ii) on conviction on indictment, to a fine of not more than $5,000,000.

Order to comply

(2) If a person has been convicted of an offence under this Act, the court may, in addition to any punishment it may otherwise impose, order the person to comply with the provisions of this Act or the regulations in respect of which the person was convicted.

Additional fine

(3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or to the spouse or other dependant of the convicted person, order the convicted person to pay, notwithstanding the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to the court's estimation of the amount of those monetary benefits.

Liability of officers, directors, etc.

1028. If an entity commits an offence under this Act, any officer, director or agent of the entity who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and liable on summary conviction or on conviction on indictment to the punishment provided under paragraph 1027(1)(a) for the offence, whether or not the entity has been prosecuted or convicted.

Limitation period

1029. (1) Proceedings by way of summary conviction in respect of an offence under a provision of this Act may be commenced at any time within, but not later than, two years after the day on which the subject-matter of the proceedings became known, in the case of an offence under a consumer provision, to the Commissioner and, in any other case, to the Superintendent.

Certificate of Superinten-
dent or Commissioner

(2) A document appearing to have been issued by the Superintendent or Commissioner, as the case may be, certifying the day on which the subject-matter of any proceedings became known to the Superintendent or Commissioner is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it.

Effect of offence on contracts

1030. Unless otherwise expressly provided in this Act, a contravention of any provision of this Act or the regulations does not invalidate any contract entered into in contravention of the provision.

Compliance or restraining order

1031. (1) If a company, a society, a foreign company, a provincial company or an insurance holding company or any director, officer, employee or agent of one does not comply with any provision of this Act or the regulations other than a consumer provision , or, in the case of a company, a society or an insurance holding company , of the incorporating instrument or any by-law of the company, society or insurance holding company , the Superintendent, any complainant or any creditor of the company, society or insurance holding company may, in addition to any other right that person has, apply to a court for an order directing the company, society, foreign company, provincial company, insurance holding company , director, officer, employee or agent to comply with - or restraining the company, society, foreign company, provincial company, insurance holding company , director, officer, employee or agent from acting in breach of - the provision and, on the application, the court may so order and make any further order it thinks fit.

Compliance or restraining order - consumer provisions

(2) If a company or a foreign company or any director, officer, employee or agent of one does not comply with any applicable consumer provision, the Commissioner or any complainant may, in addition to any other right that person has, apply to a court for an order directing the company, foreign company, director, officer, employee or agent to comply with - or restraining the company, foreign company, director, officer, employee or agent from acting in breach of - the consumer provision and, on the application, the court may so order and make any further order it thinks fit.

Appeals

1032. Any decision or order of a court under this Act may be appealed to the court of appeal.

Recovery and application of fines

1033. All fines payable under this Act are recoverable and enforceable, with costs, at the suit of Her Majesty in right of Canada, instituted by the Attorney General of Canada, and, when recovered, belong to Her Majesty in right of Canada.

Bill C-23

450. If Bill C-23, introduced in the 2nd session of the 36th Parliament and entitled the Modernization of Benefits and Obligations Act, receives royal assent, then on the later of the coming into force of section 157 of that Act and subsection 1027(3) of the Insurance Companies Act, as enacted by section 449 of this Act, subsection 1027(3) of the Insurance Companies Act is replaced by the following:

Additional fine

(3) If a person has been convicted of an offence under this Act, the court may, if it is satisfied that as a result of the commission of the offence the convicted person acquired any monetary benefits or that monetary benefits accrued to the convicted person or to the spouse, common-law partner or other dependant of the convicted person, order the convicted person to pay, notwithstanding the maximum amount of any fine that may otherwise be imposed under this Act, an additional fine in an amount equal to the court's estimation of the amount of those monetary benefits.

R.S., c. 18 (3rd Supp.), Part I

Office of the Superintendent of Financial Institutions Act

1991, c. 45, s. 557

451. (1) Paragraph (c) of the definition ``financial institution'' in section 3 of the Office of the Superintendent of Financial Institutions Act is replaced by the following:

      (c) an association incorporated or formed under the Cooperative Credit Associations Act or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act,

(2) Section 3 of the Act is amended by adding the following in alphabetical order:

``bank holding company''
« société de portefeuille bancaire »

``bank holding company'' means a bank holding company as defined in section 2 of the Bank Act;

``insurance holding company''
« société de portefeuille d'assuran-
ces »

``insurance holding company'' means an insurance holding company as defined in subsection 2(1) of the Insurance Companies Act;

1997, c. 15, s. 334

452. Subsection 6(1) of the Act is replaced by the following:

Duties, powers and functions of the Superinten-
dent

6. (1) The Superintendent has the powers, duties and functions assigned to the Superintendent by the Acts referred to in the schedule to this Part and shall examine into and report to the Minister from time to time on all matters connected with the administration of the provisions of those Acts except those that are consumer provisions as defined in section 2 of the Financial Consumer Agency of Canada Act .

1997, c. 15, s. 336

453. Section 10 of the Act and the heading before it are replaced by the following:

Exercise of Powers, Duties and Functions

Exercise by personnel

10. Except as otherwise provided by the Superintendent and subject to any terms and conditions that may be specified by the Superintendent, a person who is an officer or employee of the Office may exercise any of the powers and perform any of the duties and functions of the Superintendent under this Act if the person is appointed to serve in the Office in a capacity appropriate to the exercise of the power or performance of the duty or function .

454. (1) Subsection 18(1) of the Act is amended by adding the following after paragraph (a):

    (a.1) the Commissioner of the Financial Consumer Agency of Canada;

(2) Subsection 18(3) of the Act is replaced by the following:

Purpose of committee

(3) The purpose of the committee is to facilitate consultations and the exchange of information among its members on all matters relating directly to the supervision of financial institutions, bank holding companies or insurance holding companies .

(3) Subsection 18(4) of the English version of the Act is replaced by the following:

Access to information

(4) Every member of the committee is entitled to any information on matters relating directly to the supervision of financial institutions, bank holding companies or insurance holding companies that is in the possession or under the control of any other member and any member requested by another member to provide any such information shall forthwith provide it.

455. Section 19 of the Act is replaced by the following:

Ownership

19. No member of the committee referred to in section 18, person appointed under subsection 5(5) or Deputy Superintendent shall beneficially own, directly or indirectly, any shares of any financial institution, bank holding company, insurance holding company or of any other body corporate , however created, carrying on any business in Canada that is substantially similar to any business carried on by any financial institution.

456. (1) Subsection 21(1) of the Act is replaced by the following:

No grant or gratuity to be made

21. (1) The Superintendent, a person appointed under subsection 5(5), a Deputy Superintendent or a person appointed under section 11 shall not accept or receive, directly or indirectly, any grant or gratuity from a financial institution, bank holding company or insurance holding company , or from a director, officer or employee of any of them , and no such financial institution, bank holding company, insurance holding company , director, officer or employee shall make or give any such grant or gratuity.

(2) The portion of subsection 21(2) of the Act before paragraph (b) is replaced by the following:

Offence and punishment

(2) Every person, financial institution, bank holding company or insurance holding company that contravenes subsection (1) is guilty of an offence and liable

    (a) on summary conviction, to a fine not exceeding two thousand dollars or to imprisonment for a term not exceeding six months or to both; or

1991, c. 46, s. 601; 1996, c. 6, s. 109(1)

457. (1) Subsection 22(1) of the Act is replaced by the following:

Information is confidential

22. (1) Subject to subsection (3), the following information, and any information prepared from it , is confidential and shall be treated accordingly:

    (a) information regarding the business or affairs of a financial institution, foreign bank, bank holding company or insurance holding company or regarding persons dealing with any of them that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament;

    (b) information received by any member of the committee established by subsection 18(1), or by any person referred to in subsection 18(5) designated by any member of that committee , in the course of an exchange of information permitted by subsection 18(3); and

    (c) information furnished to the Superintendent pursuant to section 521.1 of the Bank Act.

1999, c. 28, s. 129

(2) Subsection 22(2.1) of the Act is replaced by the following:

Regulations

(2.1) The Governor in Council may make regulations prohibiting, limiting or restricting the disclosure by financial institutions, bank holding companies or insurance holding companies of prescribed supervisory information.

1996, c. 6, s. 109(3)

(3) Subsection 22(6) of the Act is replaced by the following:

Report respecting disclosure

(6) The Superintendent shall prepare a report, to be included in the report referred to in section 40 , respecting the disclosure of information by financial institutions, and describing the state of progress made in enhancing the disclosure of information in the financial services industry.

458. (1) If this section comes into force before section 23 of the Act, as enacted by section 339 of An Act to amend certain laws relating to financial institutions, being chapter 15 of the Statutes of Canada, 1997, comes into force,

    (a) subsection 23(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (d) and by adding the following after paragraph (f):

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