Bill S-5

1st Session, 41st Parliament,

60 Elizabeth II, 2011

senate of canada

BILL S-5

An Act to amend the law governing financial institutions and to provide for related and consequential matters

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

SHORT TITLE

1. This Act may be cited as the Financial System Review Act.

PART 1

BANK ACT

2. (1) The definition “consumer provision” in section 2 of the Bank Act is replaced by the following:

“consumer provision” means a provision referred to in paragraph (a) or (a.1) of the definition “consumer provision” in section 2 of the Financial Consumer Agency of Canada Act;

(2) The portion of the definition “banque étrangère” in section 2 of the French version of the Act after paragraph (g) is replaced by the following:

3. Section 21 of the Act is replaced by the following:

21. (1) Subject to subsections (2) and (4), banks shall not carry on business, and authorized foreign banks shall not carry on business in Canada, after the day that is the fifth anniversary of the day on which this section comes into force.

(2) The Governor in Council may, by order, extend by up to six months the time during which banks may continue to carry on business and authorized foreign banks may continue to carry on business in Canada. No more than one order may be made under this subsection.

(3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.

(4) If Parliament dissolves on the fifth anniversary of the day on which this section comes into force, on any day within the six-month period before that anniversary or on any day within an extension under subsection (2), banks may continue to carry on business, and authorized foreign banks may continue to carry on business in Canada, until the end of 180 days after the first day of the first session of the next Parliament.

4. Subsection 60(3) of the Act is repealed.

5. Subsection 138(1.1) of the Act is replaced by the following:

(1.1) A bank with equity of twelve billion dollars or more shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining those shareholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.

6. Subsection 156.09(2) of the Act is replaced by the following:

(2) At a meeting of shareholders of a bank with equity of twelve billion dollars or more, no person and no entity controlled by any person may, in respect of any vote of shareholders or holders of any class or series of shares of the bank, cast votes in respect of any shares beneficially owned by the person or the entity that are, in aggregate, more than 20 per cent of the eligible votes that may be cast in respect of that vote.

7. Subsection 168(3.1) of the Act is replaced by the following:

(3.1) Subsection (2) does not apply to a widely held bank with equity of twelve billion dollars or more or to a bank in respect of which subsection 378(1) applies.

8. The portion of subsection 223(3) of the Act before paragraph (a) is replaced by the following:

(3) Despite subsection (1), if the amalgamated bank would be a bank with equity of twelve billion dollars or more, the Minister shall not issue letters patent referred to in that subsection unless the amalgamated bank is

9. (1) Subsection 273(1) of the Act is replaced by the following:

273. (1) No person, including a bank, shall distribute securities of a bank that is not a federal credit union except in accordance with the regulations made under subsection (2).

(2) The portion of subsection 273(2) of the Act before paragraph (b) is replaced by the following:

(2) The Governor in Council may make regulations respecting the distribution of securities of a bank that is not a federal credit union, including

(a) respecting the information that is to be disclosed by such a bank before the distribution of any of its securities, including the information that is to be included in a prospectus;

10. The Act is amended by adding the following after section 273:

273.1 (1) No person, including a bank, shall distribute securities of a federal credit union except in accordance with the regulations made under subsection (2).

(2) The Governor in Council may make regulations respecting the distribution of securities of a federal credit union, including

(a) respecting the information that is to be disclosed by a federal credit union before the distribution of any of its securities, including the information that is to be included in a prospectus;

(b) respecting the manner of disclosure and the form of the information that is to be disclosed; and

(c) exempting any class of distribution of securities from the application of subsection (1).

11. Subsection 274(1) of the Act is replaced by the following:

274. (1) On application by a bank or any person proposing to make a distribution, the Superintendent may, by order, exempt that distribution from the application of any regulations made under subsection 273(2) or 273.1(2) if the Superintendent is satisfied that the bank or federal credit union, as the case may be, has disclosed or is about to disclose, in compliance with the laws of the relevant jurisdiction, information relating to the distribution that in form and content substantially complies with the requirements of those regulations.

12. (1) Subsection 374(1) of the Act is replaced by the following:

374. (1) No person may be a major shareholder of a bank with equity of twelve billion dollars or more.

(2) Subsection 374(2) of the Act is replaced by the following:

(2) Subsection (1) does not apply to a widely held bank that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if it controlled, within the meaning of those paragraphs, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank since that day.

(3) The portion of subsection 374(3) of the Act before paragraph (b) is replaced by the following:

(3) Subsection (1) does not apply to a widely held bank holding company that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if

(a) the bank holding company controlled, within the meaning of those paragraphs, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank since that day;

(4) The portion of subsection 374(4) of the Act before paragraph (a) is replaced by the following:

(4) Subsection (1) does not apply to any of the following that controls, within the meaning of paragraph 3(1)(d), the bank with equity of twelve billion dollars or more if it controlled, within the meaning of that paragraph, the bank on the day the bank’s equity reached twelve billion dollars and it has controlled, within the meaning of that paragraph, the bank since that day:

(5) Subsection 374(5) of the Act is replaced by the following:

(5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank with equity of twelve billion dollars or more if the entity is controlled, within the meaning of those paragraphs, by a widely held bank to which subsection (2) applies, or a widely held bank holding company to which subsection (3) applies, that controls the bank.

(6) The portion of subsection 374(6) of the Act before paragraph (a) is replaced by the following:

(6) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the bank with equity of twelve billion dollars or more if the entity is controlled, within the meaning of that paragraph, by

13. Subsection 374.1(1) of the Act is replaced by the following:

374.1 (1) Despite section 374, if a bank with equity of twelve billion dollars or more was formed as the result of an amalgamation, a person who is a major shareholder of the bank on the effective date of the letters patent of amalgamation shall do all things necessary to ensure that the person is no longer a major shareholder of the bank on the day that is one year after that day or on the day that is after any shorter period specified by the Minister.

14. Subsection 375(1) of the Act is replaced by the following:

375. (1) If a person is a major shareholder of a bank with equity of less than twelve billion dollars and the bank’s equity reaches twelve billion dollars or more, the person shall do all things necessary to ensure that the person is not a major shareholder of the bank on the day that is three years after the day the bank’s equity reached twelve billion dollars.

15. The portion of subsection 376(1) of the Act before paragraph (a) is replaced by the following:

376. (1) If a widely held bank with equity of twelve billion dollars or more controls another bank and a person becomes a major shareholder of the other bank or of any entity that also controls the other bank, the widely held bank must do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the other bank or entity that controls the other bank,

16. The portion of subsection 376.01(1) of the Act before paragraph (a) is replaced by the following:

376.01 (1) Despite subsection 376(1), if a widely held bank with equity of twelve billion dollars or more controls a bank (in this subsection referred to as the “other bank”) in respect of which that subsection does not apply by reason of subsection 376(2) and the equity of the other bank reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the other bank reaches two hundred and fifty million dollars or more, or the prescribed amount, as the case may be, a person is a major shareholder of the other bank or of any entity that also controls the other bank, the widely held bank must do all things necessary to ensure that, on the day that is three years after that day,

17. Section 376.1 of the Act is replaced by the following:

376.1 No person who has a significant interest in any class of shares of a widely held bank with equity of twelve billion dollars or more may have a significant interest in any class of shares of a subsidiary of the widely held bank that is a bank or a bank holding company.

18. Section 376.2 of the Act is replaced by the following:

376.2 No person who has a significant interest in any class of shares of a bank may have a significant interest in any class of shares of any widely held bank with equity of twelve billion dollars or more, or of any widely held bank holding company with equity of twelve billion dollars or more, that controls the bank.

19. Subsection 377(1) of the Act is replaced by the following:

377. (1) No person shall control, within the meaning of paragraph 3(1)(d), a bank with equity of twelve billion dollars or more.

20. Section 377.1 of the Act is replaced by the following:

377.1 (1) No person shall, without the approval of the Minister, acquire control, within the meaning of paragraph 3(1)(d), of a bank with equity of less than twelve billion dollars.

(2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), a bank with equity of less than twelve billion dollars, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the bank through an acquisition for which the approval of the Minister is required under subsection (1).

21. (1) Subsection 378(1) of the Act is replaced by the following:

378. (1) A bank that was named in Schedule I as that Schedule read immediately before October 24, 2001 and that had equity of less than five billion dollars on that day is deemed, for the purposes of sections 138, 156.09, 374, 376, 376.01, 376.1, 376.2, 377, 380 and 382, subsection 383(2), section 385 and subsection 396(2), to be a bank with equity of twelve billion dollars or more.

(2) Subsection 378(3) of the Act is replaced by the following:

(3) Subsection (1) ceases to apply to a bank with equity of less than twelve billion dollars if the Minister specifies that it no longer applies to the bank.

22. Section 380 of the Act is replaced by the following:

380. On application by a bank, other than a bank with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank from the application of sections 373 and 379.

23. Subsection 382(1) of the Act is replaced by the following:

382. (1) Despite sections 373 and 379, the approval of the Minister is not required in respect of a bank with equity of less than twelve billion dollars if a person with a significant interest in a class of shares of the bank, or an entity controlled by a person with a significant interest in a class of shares of the bank, purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the bank to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

24. Subsection 383(2) of the Act is replaced by the following:

(2) Paragraph (1)(a) does not apply in respect of a bank with equity of twelve billion dollars or more.

25. (1) The portion of subsection 385(1) of the Act before paragraph (a) is replaced by the following:

385. (1) Every bank with equity of two billion dollars or more but less than twelve billion dollars shall, from and after the day determined under this section in respect of that bank, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the bank and that are

(2) Paragraph 385(2)(a) of the Act is replaced by the following:

(a) if the bank had equity of two billion dollars or more but less than twelve billion dollars on the day the bank came into existence, the day that is three years after that day; and

26. Section 385.1 of the Act is replaced by the following:

385.1 If a bank to which section 385 applies becomes a bank with equity of twelve billion dollars or more, that section continues to apply to the bank until no person is a major shareholder of the bank, other than a person to whom subsections 374(2) to (6) apply.

27. Section 387 of the Act is replaced by the following:

387. If the Superintendent has, by order, directed a bank with equity of two billion dollars or more but less than twelve billion dollars to increase its capital and shares of the bank are issued and acquired in accordance with any terms and conditions that may be specified in the order, section 385 does not apply in respect of the bank until the time that the Superintendent may, by order, specify.

28. Subsection 393(1) of the Act is replaced by the following:

393. (1) Despite sections 374 and 377, a widely held bank or a widely held bank holding company may be a major shareholder of a bank with equity of twelve billion dollars or more and cease to control, within the meaning of paragraphs 3(1)(a) and (d), the bank if it has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the bank on the expiration of the day specified in the agreement.

29. Subsection 393.1(1) of the Act is replaced by the following:

393.1 (1) Despite sections 374 and 377, an eligible foreign institution, an eligible Canadian financial institution, other than a bank, or a widely held insurance holding company may be a major shareholder of a bank with equity of twelve billion dollars or more and cease to control, within the meaning of paragraph 3(1)(d), the bank if it has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the bank on the expiration of the day specified in the agreement.

30. The portion of subsection 394(1) of the Act before paragraph (a) is replaced by the following:

394. (1) If a body corporate that is an eligible financial institution other than a bank controls, within the meaning of paragraph 3(1)(d), a bank with equity of twelve billion dollars or more and the body corporate subsequently ceases to be an eligible financial institution, the body corporate must do all things necessary to ensure that, on the day that is one year after the day it ceased to be an eligible financial institution,

31. Paragraph 396(2)(a) of the Act is replaced by the following:

(a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of a widely held bank with equity of twelve billion dollars or more; or

32. Subsection 401.2(2) of the Act is replaced by the following:

(2) Despite subsection (1), a bank may record in its securities register a transfer or issue of any share of the bank to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share that is transferred or issued is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

33. Subsection 401.3(2) of the Act is replaced by the following:

(2) Subsection (1) does not apply to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share referred to in subsection (1) is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

34. (1) The portion of subsection 413.1(1) of the Act before paragraph (a) is replaced by the following:

413.1 (1) Before a bank referred to in paragraph 413(1)(b) or (c) opens a deposit account in Canada or provides in Canada a prescribed product that relates to a deposit, the bank shall, at the prescribed time and place and in the prescribed form and manner, give the person requesting the opening of the account or the provision of the product

(2) The portion of subsection 413.1(2) of the Act before paragraph (a) is replaced by the following:

(2) A bank referred to in paragraph 413(1)(b) or (c) shall, in accordance with the regulations,

(3) Paragraph 413.1(3)(a) of the Act is replaced by the following:

(a) prescribing the time and place at which and the form and manner in which notices referred to in subsection (1) are to be given and the other information to be contained in the notices; and

35. Paragraph 418.1(3)(b) of the English version of the Act is replaced by the following:

(b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

36. Subsection 425(1) of the Act is amended by adding the following in alphabetical order:

“unperfected”, in relation to a security interest, means that the security interest has not been registered in a public register maintained under the law under which the security interest is created, or has not been perfected or published by any other means recognized by that law, where the registration or other means of perfection or publication would have made the security interest effective against third parties or would have determined priorities in rank in respect of rights in, on or in respect of the property that is subject to the security interest;

37. Subsection 426(7) of the Act is replaced by the following:

(7) Subject to subsections (8), (9) and (10), all the rights and powers of a bank in respect of the property covered by security given under this section have priority over all rights subsequently acquired in, on or in respect of the property and also over the claim of any mechanics’ lien holder, of any unpaid vendor of equipment or casing or of any person who had a security interest in that property that was unperfected at the time the bank acquired its security in the property.

(7.1) The priority referred to in subsection (7) does not extend over the claim of any unpaid vendor who had a lien on the equipment or casing, or of any person who has a security interest in the property that was unperfected at the time the bank acquired its security in the property, if the bank acquired its security with knowledge of that unpaid vendor’s lien or that other person’s security interest.

38. Subsections 428(1) and (2) of the Act are replaced by the following:

428. (1) All the rights and powers of a bank in respect of the property mentioned in or covered by a warehouse receipt or bill of lading acquired and held by the bank, and the rights and powers of the bank in respect of the property covered by security given to the bank under section 427 that are the same as if the bank had acquired a warehouse receipt or bill of lading in which that property was described, have, subject to subsection 427(4) and subsections (3) to (6) of this section, priority over all rights subsequently acquired in, on or in respect of that property, and also over the claim of any unpaid vendor or of any person who has a security interest in that property that was unperfected at the time the bank acquired its security in the property.

(1.1) If security is given to the bank under paragraph 427(1)(c) or (m) consisting of aquacultural equipment, under paragraph 427(1)(d) or (n) consisting of agricultural equipment, under paragraph 427(1)(k) consisting of aquacultural equipment or an aquacultural electric system, under paragraph 427(1)(l) consisting of agricultural equipment or a farm electric system or under paragraph 427(1)(p) consisting of forestry equipment, the priority referred to in subsection (1) exists even if the property is or becomes affixed to real property.

(2) The priority referred to in subsection (1) does not extend over the claim of any unpaid vendor who had a lien on the property, or of any person who has a security interest in the property that was unperfected at the time the bank acquired its warehouse receipt, bill of lading or security, if the bank acquired it with knowledge of that unpaid vendor’s lien or that other person’s security interest.

39. The portion of paragraph 443(a) of the Act before subparagraph (i) is replaced by the following:

(a) the time and place at which and the form and manner in which disclosure is to be made by a bank of

40. Sections 446 and 447 of the Act are replaced by the following:

446. A bank shall disclose to its customers and to the public, at the prescribed time and place and in the prescribed form and manner, the charges applicable to deposit accounts with the bank and the usual amount, if any, charged by the bank for services normally provided by the bank to its customers and to the public.

447. (1) A bank shall not increase any charge applicable to a personal deposit account with the bank or introduce any new charge applicable to a personal deposit account with the bank unless the bank discloses the charge at the prescribed time and place and in the prescribed form and manner to the customer in whose name the account is kept.

(2) With respect to prescribed services in relation to deposit accounts, other than personal deposit accounts, a bank shall not increase any charge for any such service in relation to a deposit account with the bank or introduce any new charge for any such service in relation to a deposit account with the bank unless the bank discloses the charge at the prescribed time and place and in the prescribed form and manner to the customer in whose name the account is kept.

41. Subsection 450(1) of the Act is replaced by the following:

450. (1) A bank shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 451, and other prescribed information have been disclosed by the bank to the borrower at the prescribed time and place and in the prescribed form and manner.

42. (1) Paragraph 452(1)(c) of the Act is replaced by the following:

(c) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement;

(2) Paragraph 452(1)(e) of the Act is replaced by the following:

(e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

(3) Subsection 452(1.1) of the Act is replaced by the following:

(1.1) A bank shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards and provide prescribed information to any person applying to it for a credit, payment or charge card.

(4) Paragraphs 452(2)(d) and (e) of the Act are replaced by the following:

(d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and

(e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

(5) Paragraphs 452(3)(d) and (e) of the Act are replaced by the following:

(d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing under the arrangement; and

(e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

43. Sections 452.1 and 453 of the Act are replaced by the following:

452.1 If a bank makes a loan in respect of which the disclosure requirements of section 450 apply and the loan is secured by a mortgage on real property, the bank shall disclose to the borrower, at the prescribed time and place and in the prescribed form and manner, any information that is prescribed respecting the renewal of the loan.

453. No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 452(3), loans, credit cards, payment cards or charge cards, offered to natural persons by a bank, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner.

44. (1) The portion of paragraph 454(a) of the Act before subparagraph (i) is replaced by the following:

(a) respecting the time and place at which, and the form and manner in which, a bank is to disclose to a borrower

(2) Paragraph 454(f) of the Act is replaced by the following:

(f) respecting the time and place at which, and the form and manner in which, any rights, obligations, charges or penalties referred to in sections 449.1 to 453 are to be disclosed;

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

456. (1) A bank shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide a person requesting or receiving a product or service from it with prescribed information on how to contact the Agency if the person has a complaint about a deposit account, an arrangement referred to in subsection 452(3), a payment, credit or charge card, the disclosure of or manner of calculating the cost of borrowing in respect of a loan or about any other obligation of the bank under a consumer provision.

46. (1) The portion of subsection 458.1(1) of the Act before paragraph (a) is replaced by the following:

458.1 (1) Subject to regulations made under subsection (2), a member bank shall, at any branch in Canada at which it, through a natural person, opens retail deposit accounts and disburses cash to customers, cash a cheque or other instrument for any individual, if

(2) Subsection 458.1(2) of the Act is amended by adding “and” at the end of paragraph (b), by striking out “and” at the end of paragraph (c) and by repealing paragraph (d).

47. (1) The portion of section 458.3 of the Act before paragraph (a) is replaced by the following:

458.3 The Governor in Council may make regulations respecting any matters involving a bank’s dealings, or its employees’, representatives’, agents’ or other intermediaries’ dealings, with customers or the public, including

(2) Paragraph 458.3(b) of the Act is replaced by the following:

(b) the time and place at which and the form and manner in which any of those activities are to be carried out or any of those services are to be provided.

48. Subsections 459.1(4.1) and (4.2) of the Act are replaced by the following:

(4.1) A bank shall, in accordance with the regulations, disclose the prohibition on coercive tied selling set out in subsection (1) in a statement in plain language that is clear and concise, displayed and available to customers and the public at all of its branches where products or services are offered in Canada, on all of its websites through which products or services are offered in Canada and at all prescribed points of service in Canada.

(4.2) The Governor in Council may make regulations for the purposes of subsection (4.1)

(a) respecting the time and place at which, and the form and manner in which, the prohibition on coercive tied selling set out in subsection (1) is to be disclosed, displayed and made available;

(b) defining “point of service”; and

(c) prescribing points of service.

49. Paragraphs 459.2(5)(a) and (b) of the Act are replaced by the following:

(a) the time and place at which and the form and manner in which notice shall be given under subsection (1), the persons to whom it shall be given and the information to be included, with those times, places, forms and manners being permitted to vary according to circumstances specified in the regulations;

(b) circumstances in which a member bank is not required to give notice under subsection (1), circumstances in which the Commissioner may exempt a member bank from the requirement to give notice under that subsection, and circumstances in which the Commissioner may vary the time and place at which and the form and manner in which notice is required to be given under any regulation made under paragraph (a); and

50. (1) Subsections 459.3(2) and (3) of the Act are replaced by the following:

(2) A bank shall, at the prescribed time and place and in the prescribed form and manner, file a copy of the statement with the Commissioner.

(3) A bank shall, at the prescribed time and place and in the prescribed form and manner, disclose the statement to its customers and to the public.

(2) Paragraph 459.3(4)(a) of the Act is replaced by the following:

(a) the name, contents and form of the statement referred to in subsection (1) and the time within which, the place at which and the manner in which it must be prepared;

(3) Paragraphs 459.3(4)(c) and (d) of the Act are replaced by the following:

(c) the time and place at which and the form and manner in which a statement must be filed under subsection (2); and

(d) the time and place at which and the form and manner in which a statement mentioned in subsection (3) is to be disclosed, respectively, to a bank’s customers and to the public.

51. (1) Subparagraph 459.4(a)(iv) of the Act is replaced by the following:

(iv) any other matter that may affect their dealings, or their employees’, representatives’, agents’ or other intermediaries’ dealings, with customers or the public;

(2) Paragraph 459.4(b) of the Act is replaced by the following:

(b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

52. Section 459.5 of the Act is replaced by the following:

459.5 A bank shall not enter into any arrangement or otherwise cooperate with any of its representatives, agents or other intermediaries, 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 or with any of the representatives, agents or other intermediaries of such an affiliate, to sell or further the sale of a product or service of the bank or the affiliate unless

(a) the affiliate or the representative, agent or other intermediary of the bank or the affiliate, as the case may be, complies, with respect to the product or service, with the consumer provisions that apply to banks — other than section 455.1 — as if they were a bank, to the extent that those provisions are applicable to their activities; and

(b) the persons who request or receive the product or service have access to the bank’s procedures for dealing with complaints established under this Act.

53. (1) Subsection 468(3.1) of the Act is replaced by the following:

(3.1) Despite paragraph (3)(a), a bank may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied:

(a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and

(b) if the entity engages in other business, that business is limited to engaging in one or more of the following:

(i) the activities of a mutual fund distribution entity,

(ii) any activity that a bank is permitted to engage in under paragraph 410(1)(c.2), and

(iii) the provision of investment counselling services and portfolio management services.

(2) Subsection 468(5) of the Act is amended by adding the following after paragraph (b):

(b.1) acquire control of an entity referred to in paragraph (1)(j) if the bank is a bank with equity of two billion dollars or more and

A + B > C

where

A      is the value of the entity’s consolidated assets, as it would have been reported in the entity’s annual financial statements if those statements had been prepared immediately before the acquisition,

B      is the aggregate of the values of the consolidated assets of all other entities referred to in paragraph (1)(j) that the bank has acquired control of within the preceding 12 months, as the value for each entity would have been reported in its annual financial statements if those statements had been prepared immediately before the acquisition of control of that entity, and

C      is 10% of the value of the bank’s consolidated assets, as shown in the bank’s last annual statement that was prepared before its first acquisition of control of an entity referred to in paragraph (1)(j) within the preceding 12 months;

(3) Section 468 of the Act is amended by adding the following after subsection (5):

(5.1) In addition to any matters or conditions provided for in this Act that are relevant to the granting of an approval, the Minister may, in considering whether to grant the approval under paragraph (5)(b.1), take into account all matters that he or she considers relevant in the circumstances, including

(a) the stability of the financial system in Canada; and

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

54. (1) Section 507 of the Act is amended by adding the following after subsection (1):

(1.1) For the purposes of this Part, “foreign bank” means a foreign bank as defined in section 2 but without regard to the portion of that definition after paragraph (g).

(2) Subsection 507(15) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) is a subsidiary of a federal financial institution.

(3) Subsection 507(16) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) is a subsidiary of a federal financial institution.

55. Subsection 522.08(2.1) of the Act is replaced by the following:

(2.1) Despite paragraph (2)(a), a foreign bank or an entity associated with a foreign bank may acquire or hold control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied:

(a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and

(b) if the entity engages in other business, that business is limited to engaging in one or more of the following:

(i) the activities of a mutual fund distribution entity,

(ii) any activity that a bank is permitted to engage in under paragraph 410(1)(c.2), and

(iii) the provision of investment counselling services and portfolio management services.

56. Section 522.09 of the Act is amended by adding the following after subsection (3):

(4) Subsections (1) to (3) do not apply to a foreign bank — or an entity associated with a foreign bank — that is a subsidiary of a federal financial institution.

57. Section 522.19 of the Act is amended by adding the following after subsection (2):

(3) Subsection (1) does not apply to a foreign bank — or an entity associated with a foreign bank — that is a subsidiary of a federal financial institution.

58. Subsection 522.21(2) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) is a subsidiary of a federal financial institution.

59. Subsection 522.211(2) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) is a subsidiary of a federal financial institution.

60. The portion of subsection 540(2) of the Act before paragraph (a) is replaced by the following:

(2) If subsection 524(2) applies, the authorized foreign bank shall, in accordance with the regulations,

61. (1) The portion of subsection 545(4) of the Act before paragraph (a) is replaced by the following:

(4) Before an authorized foreign bank opens a deposit account in Canada or provides in Canada any prescribed product that relates to a deposit, the authorized foreign bank shall, at the prescribed time and place and in the prescribed form and manner, give the person requesting the opening of the account or the provision of the product

(2) The portion of subsection 545(5) of the Act before paragraph (a) is replaced by the following:

(5) An authorized foreign bank shall, in accordance with the regulations,

(3) Paragraph 545(6)(b) of the Act is replaced by the following:

(b) prescribing the time and place at which and the form and manner in which notices referred to in subsection (4) are to be given and the other information to be contained in the notices; and

62. Paragraph 552(3)(b) of the English version of the Act is replaced by the following:

(b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

63. The portion of paragraph 562(a) of the Act before subparagraph (i) is replaced by the following:

(a) the time and place at which and the form and manner in which disclosure is to be made by an authorized foreign bank of

64. Sections 565 and 566 of the Act are replaced by the following:

565. An authorized foreign bank shall disclose, at the prescribed time and place and in the prescribed form and manner, to its customers and to the public, the charges applicable to deposit accounts with the authorized foreign bank and the usual amount, if any, charged by it for services normally provided to its customers and to the public.

566. (1) An authorized foreign bank shall not increase any charge applicable to a personal deposit account with the authorized foreign bank or introduce any new charge applicable to a personal deposit account with the authorized foreign bank unless it discloses the charge at the prescribed time and place and in the prescribed form and manner to the customer in whose name the account is kept.

(2) An authorized foreign bank shall not increase any charge for any service that is prescribed in relation to a deposit account, other than a personal deposit account, with the authorized foreign bank, or introduce any new charge for any of those services unless the authorized foreign bank discloses the charge at the prescribed time and place and in the prescribed form and manner to the customer in whose name the account is kept.

65. Subsection 568(1) of the Act is replaced by the following:

568. (1) An authorized foreign bank shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 569, and other prescribed information have been disclosed by the authorized foreign bank to the borrower at the prescribed time and place and in the prescribed form and manner.

66. (1) Paragraph 570(1)(c) of the Act is replaced by the following:

(c) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement;

(2) Paragraph 570(1)(e) of the Act is replaced by the following:

(e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

(3) Subsection 570(1.1) of the Act is replaced by the following:

(1.1) An authorized foreign bank shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application form or related document that it prepares for the issuance of credit, payment or charge cards and provide prescribed information to any person applying to it for a credit, payment or charge card.

(4) Paragraphs 570(2)(d) and (e) of the Act are replaced by the following:

(d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and

(e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

(5) Paragraphs 570(3)(d) and (e) of the Act are replaced by the following:

(d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing under the arrangement; and

(e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

67. Sections 570.1 and 571 of the Act are replaced by the following:

570.1 If an authorized foreign bank makes a loan in respect of which the disclosure requirements of section 568 apply and the loan is secured by a mortgage on real property, the authorized foreign bank shall disclose to the borrower, at the prescribed time and place and in the prescribed form and manner, any information that is prescribed respecting the renewal of the loan.

571. No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 570(3), loans, credit cards, payment cards or charge cards, offered to natural persons by an authorized foreign bank, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner.

68. (1) The portion of paragraph 572(a) of the Act before subparagraph (i) is replaced by the following:

(a) respecting the time and place at which, and the form and manner in which, an authorized foreign bank shall disclose to a borrower

(2) Paragraph 572(f) of the Act is replaced by the following:

(f) respecting the time and place at which, and the form and manner in which, any rights, obligations, charges or penalties referred to in sections 567.1 to 571 are to be disclosed;

69. Subsection 574(1) of the Act is replaced by the following:

574. (1) An authorized foreign bank shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide a person requesting or receiving a product or service from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 570(3), a payment, credit or charge card, the disclosure of or manner of calculating the cost of borrowing in respect of a loan, or about any other obligation of the authorized foreign bank under a consumer provision.

70. (1) The portion of section 575.1 of the Act before paragraph (a) is replaced by the following:

575.1 The Governor in Council may make regulations respecting any matters involving an authorized foreign bank’s dealings, or its employees’, representatives’, agents’ or other intermediaries’ dealings, with customers or the public, including

(2) Paragraph 575.1(b) of the Act is replaced by the following:

(b) the time and place at which and the form and manner in which any of those activities are to be carried out or any of those services are to be provided.

71. Subsections 576.1(4.1) and (4.2) of the Act are replaced by the following:

(4.1) An authorized foreign bank shall, in accordance with the regulations, disclose the prohibition on coercive tied selling set out in subsection (1) in a statement in plain language that is clear and concise, displayed and available to customers and the public at all of its branches where products or services are offered in Canada, on all of its websites through which products or services are offered in Canada and at all prescribed points of service in Canada.

(4.2) The Governor in Council may make regulations for the purposes of subsection (4.1)

(a) respecting the time and place at which, and the form and manner in which, the prohibition on coercive tied selling set out in subsection (1) is to be disclosed, displayed and made available;

(b) defining “point of service”; and

(c) prescribing points of service.

72. (1) Subparagraph 576.2(a)(iv) of the Act is replaced by the following:

(iv) any other matter that may affect their dealings, or their employees’, representatives’, agents’ or other intermediaries’ dealings, with customers or the public;

(2) Paragraph 576.2(b) of the Act is replaced by the following:

(b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

73. The Act is amended by adding the following after section 576.2:

576.3 An authorized foreign bank shall not enter into any arrangement or otherwise cooperate with any of its representatives, agents or other intermediaries, with any of its affiliates that is controlled by an authorized foreign bank and that is a finance entity as defined in subsection 464(1) or other prescribed entity or with any of the representatives, agents or other intermediaries of such an affiliate, to sell or further the sale of a product or service of the authorized foreign bank or the affiliate in Canada unless

(a) the affiliate or the representative, agent or other intermediary of the authorized foreign bank or the affiliate, as the case may be, complies, with respect to the product or service, with the consumer provisions that apply to authorized foreign banks — other than section 573.1 — as if they were an authorized foreign bank, to the extent that those provisions are applicable to their activities; and

(b) the persons who request or receive the product or service have access to the authorized foreign bank’s procedures for dealing with complaints established under this Act.

74. Paragraph 613(2)(a) of the Act is replaced by the following:

(a) has a right of access to any records, cash, assets and security held by or on behalf of an authorized foreign bank; and

75. The Act is amended by adding the following after section 634:

634.1 On the application of a bank that has been incorporated by a special Act of Parliament, the Superintendent may issue a certificate stating that the bank was incorporated by a special Act of Parliament, and may include with the certificate any information in the Superintendent’s possession that relates to the bank’s incorporation.

76. Paragraph 643(2)(a) of the Act is replaced by the following:

(a) has a right of access to any records, cash, assets and security held by or on behalf of a bank; and

77. Section 670 of the Act is replaced by the following:

670. (1) Subject to subsections (2) and (4), bank holding companies shall not carry on business after the day that is the fifth anniversary of the day on which this section comes into force.

(2) The Governor in Council may, by order, extend by up to six months the time during which bank holding companies may continue to carry on business. No more than one order may be made under this subsection.

(3) The order is not a regulation for the purposes of the Statutory Instruments Act. However, it shall be published in Part II of the Canada Gazette.

(4) If Parliament dissolves on the fifth anniversary of the day on which this section comes into force, on any day within the six-month period before that anniversary or on any day within an extension under subsection (2), bank holding companies may continue to carry on business until the end of 180 days after the first day of the first session of the next Parliament.

78. Subsection 727(2) of the Act is replaced by the following:

(2) A bank holding company with equity of twelve billion dollars or more shall set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining those shareholders entitled to receive the notice of meeting, or if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.

79. Subsection 756(4) of the Act is replaced by the following:

(4) Subsection (2) does not apply to a widely held bank holding company with equity of twelve billion dollars or more or to a widely held bank holding company that controls a bank to which subsection 378(1) applies.

80. The portion of subsection 803(3) of the Act before paragraph (a) is replaced by the following:

(3) Despite subsection (1), if the amalgamated bank holding company would be a bank holding company with equity of twelve billion dollars or more, the Minister shall not issue letters patent referred to in that subsection unless the amalgamated bank holding company is

81. Section 876 of the Act is replaced by the following:

876. (1) No person may be a major shareholder of a bank holding company with equity of twelve billion dollars or more.

(2) Subsection (1) does not apply to a widely held bank that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company with equity of twelve billion dollars or more if it controlled, within the meaning of those paragraphs, the bank holding company on the day the bank holding company’s equity reached twelve billion dollars and it has controlled, within the meaning of those paragraphs, the bank holding company since that day.

(3) Subsection (1) does not apply to a widely held bank holding company that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company with equity of twelve billion dollars or more if the widely held bank holding company controlled, within the meaning of those paragraphs, the bank holding company on the day the bank holding company’s equity reached twelve billion dollars and the widely held bank holding company has controlled, within the meaning of those paragraphs, the bank holding company since that day.

(4) Subsection (1) does not apply to any of the following that controls, within the meaning of paragraph 3(1)(d), the bank holding company with equity of twelve billion dollars or more if it controlled, within the meaning of that paragraph, the bank holding company on the day the bank holding company’s equity reached twelve billion dollars and it has controlled, within the meaning of that paragraph, the bank holding company since that day:

(a) a widely held insurance holding company;

(b) an eligible Canadian financial institution, other than a bank; or

(c) an eligible foreign institution.

(5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company with equity of twelve billion dollars or more if the entity is controlled, within the meaning of those paragraphs, by a widely held bank to which subsection (2) applies, or a widely held bank holding company to which subsection (3) applies, that controls the bank holding company.

(6) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the bank holding company with equity of twelve billion dollars or more if the entity is controlled, within the meaning of that paragraph, by

(a) a widely held insurance holding company to which subsection (4) applies that controls the bank holding company;

(b) an eligible Canadian financial institution, other than a bank, to which subsection (4) applies that controls the bank holding company; or

(c) an eligible foreign institution to which subsection (4) applies that controls the bank holding company.

82. Subsection 877(1) of the Act is replaced by the following:

877. (1) Despite section 876, if a bank holding company with equity of twelve billion dollars or more was formed as the result of an amalgamation, a person who is a major shareholder of the bank holding company on the effective date of the letters patent of amalgamation shall do all things necessary to ensure that the person is no longer a major shareholder of the bank holding company on the day that is one year after that day or on the day that is after any shorter period specified by the Minister.

83. Subsection 878(1) of the Act is replaced by the following:

878. (1) If a person is a major shareholder of a bank holding company with equity of less than twelve billion dollars and the bank holding company’s equity reaches twelve billion dollars or more, the person shall do all things necessary to ensure that the person is not a major shareholder of the bank holding company on the day that is three years after the day the bank holding company’s equity reached twelve billion dollars.

84. The portion of subsection 879(1) of the Act before paragraph (a) is replaced by the following:

879. (1) If a widely held bank holding company with equity of twelve billion dollars or more controls a bank and a person becomes a major shareholder of the bank or of any entity that also controls the bank, the widely held bank holding company must do all things necessary to ensure that, on the day that is one year after the person became a major shareholder of the bank or entity that controls it,

85. The portion of subsection 879.1(1) of the Act before paragraph (a) is replaced by the following:

879.1 (1) Despite subsection 879(1), if a widely held bank holding company with equity of twelve billion dollars or more controls a bank in respect of which that subsection does not apply by reason of subsection 879(2) and the equity of the bank reaches two hundred and fifty million dollars or more or any other amount that is prescribed and on the day the equity of the bank reaches two hundred and fifty million dollars or more or the prescribed amount, as the case may be, a person is a major shareholder of the bank or of any entity that also controls the bank, the widely held bank holding company must do all things necessary to ensure that, on the day that is three years after that day,

86. Sections 880 and 881 of the Act are replaced by the following:

880. No person who has a significant interest in any class of shares of a widely held bank holding company with equity of twelve billion dollars or more may have a significant interest in any class of shares of a subsidiary of the widely held bank holding company that is a bank or a bank holding company.

881. No person who has a significant interest in any class of shares of a bank holding company may have a significant interest in any class of shares of any widely held bank with equity of twelve billion dollars or more, or of any widely held bank holding company with equity of twelve billion dollars or more, that controls the bank holding company.

87. Subsection 882(1) of the Act is replaced by the following:

882. (1) No person shall control, within the meaning of paragraph 3(1)(d), a bank holding company with equity of twelve billion dollars or more.

88. Sections 883 and 884 of the Act are replaced by the following:

883. (1) No person shall, without the approval of the Minister, acquire control, within the meaning of paragraph 3(1)(d), of a bank holding company with equity of less than twelve billion dollars.

(2) If the entity that would result from an amalgamation, a merger or a reorganization would control, within the meaning of paragraph 3(1)(d), a bank holding company with equity of less than twelve billion dollars, the entity is deemed to be acquiring control, within the meaning of that paragraph, of the bank holding company through an acquisition for which the approval of the Minister is required under subsection (1).

884. A bank holding company with equity of less than twelve billion dollars that controls a bank to which subsection 378(1) applies is deemed, for the purposes of sections 156.09, 727, 876, 879, 879.1, 880, 881, 882, 888 and 890, subsection 891(2), section 893 and subsection 906(2), to be a bank holding company with equity of twelve billion dollars or more.

89. Section 888 of the Act is replaced by the following:

888. On application by a bank holding company, other than a bank holding company with equity of twelve billion dollars or more, the Superintendent may exempt any class of non-voting shares of the bank holding company the aggregate book value of which is not more than 30 per cent of the aggregate book value of all the outstanding shares of the bank holding company from the application of sections 875 and 887.

90. Subsection 890(1) of the Act is replaced by the following:

890. (1) Despite sections 875 and 887, the approval of the Minister is not required in respect of a bank holding company with equity of less than twelve billion dollars if a person with a significant interest in a class of shares of the bank holding company, or an entity controlled by a person with a significant interest in a class of shares of the bank holding company, purchases or otherwise acquires shares of that class, or acquires control of any entity that holds any share of that class, and the number of shares of that class purchased or otherwise acquired, or the acquisition of control of the entity, as the case may be, would not increase the significant interest of the person in that class of shares of the bank holding company to a percentage that is greater than the percentage referred to in subsection (2) or (3), whichever is applicable.

91. Subsection 891(2) of the Act is replaced by the following:

(2) Paragraph (1)(a) does not apply in respect of a bank holding company with equity of twelve billion dollars or more.

92. (1) The portion of subsection 893(1) of the Act before paragraph (a) is replaced by the following:

893. (1) Every bank holding company with equity of two billion dollars or more but less than twelve billion dollars shall, from and after the day determined under this section in respect of that bank holding company, have, and continue to have, voting shares that carry at least 35 per cent of the voting rights attached to all of the outstanding voting shares of the bank holding company and that are

(2) Paragraph 893(2)(a) of the Act is replaced by the following:

(a) if the bank holding company had equity of two billion dollars or more but less than twelve billion dollars on the day the bank holding company was formed or came into existence, the day that is three years after that day; and

93. Section 894 of the Act is replaced by the following:

894. If a bank holding company to which section 893 applies becomes a bank holding company with equity of twelve billion dollars or more, that section continues to apply to the bank holding company until no person is a major shareholder of the bank holding company, other than a person in respect of whom subsections 876(2) to (6) applies.

94. Section 896 of the Act is replaced by the following:

896. If the Superintendent has, by order, directed a bank holding company with equity of two billion dollars or more but less than twelve billion dollars to increase its capital and shares of the bank holding company are issued and acquired in accordance with any terms and conditions that may be specified in the order, section 893 does not apply in respect of the bank holding company until the time that the Superintendent may, by order, specify.

95. Subsection 902(1) of the Act is replaced by the following:

902. (1) Despite sections 876 and 882, a widely held bank or a widely held bank holding company may be a major shareholder of a bank holding company with equity of twelve billion dollars or more and cease to control, within the meaning of paragraphs 3(1)(a) and (d), the bank holding company if it has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the bank holding company on the expiration of the day specified in the agreement.

96. Subsection 903(1) of the Act is replaced by the following:

903. (1) Despite sections 876 and 882, an eligible foreign institution, an eligible Canadian financial institution, other than a bank, or a widely held insurance holding company may be a major shareholder of a bank holding company with equity of twelve billion dollars or more and cease to control, within the meaning of paragraph 3(1)(d), the bank holding company if it has entered into an agreement with the Minister to do all things necessary to ensure that it is not a major shareholder of the bank holding company on the expiration of the day specified in the agreement.

97. The portion of subsection 904(1) of the Act before paragraph (a) is replaced by the following:

904. (1) If a body corporate that is an eligible financial institution other than a bank controls, within the meaning of paragraph 3(1)(d), a bank holding company with equity of twelve billion dollars or more and the body corporate subsequently ceases to be an eligible financial institution, the body corporate must do all things necessary to ensure that, on the day that is one year after the day it ceased to be an eligible financial institution,

98. Paragraph 906(2)(a) of the Act is replaced by the following:

(a) more than 10 per cent but no more than 20 per cent of any class of the outstanding voting shares of a widely held bank holding company with equity of twelve billion dollars or more; or

99. Subsection 913(2) of the Act is replaced by the following:

(2) Despite subsection (1), a bank holding company may record in its securities register a transfer or issue of any share of the bank holding company to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share that is transferred or issued is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

100. Subsection 914(2) of the Act is replaced by the following:

(2) Subsection (1) does not apply to a foreign bank, or to a foreign institution, that is controlled by the government of a foreign country or any political subdivision of a foreign country, or by any agent or agency of a foreign government, if the share referred to in subsection (1) is beneficially owned by the foreign bank or foreign institution or by an entity controlled by the foreign bank or foreign institution.

101. (1) Subsection 930(3.1) of the Act is replaced by the following:

(3.1) Despite paragraph (3)(a), a bank holding company may acquire control of, or acquire or increase a substantial investment in, any entity that acts as a trustee for a trust if the entity has been permitted under the laws of a province to act as a trustee for a trust and the following conditions are satisfied:

(a) the entity acts as a trustee only with respect to a closed-end fund or mutual fund entity; and

(b) if the entity engages in other business, that business is limited to engaging in one or more of the following:

(i) the activities of a mutual fund distribution entity,

(ii) any activity that a bank is permitted to engage in under paragraph 410(1)(c.2), and

(iii) the provision of investment counselling services and portfolio management services.

(2) Subsection 930(5) of the Act is amended by adding the following after paragraph (b):

(b.1) acquire control of an entity referred to in paragraph (1)(j) if the bank holding company is a bank holding company with equity of two billion dollars or more and

A + B > C

where

A      is the value of the entity’s consolidated assets, as it would have been reported in the entity’s annual financial statements if those statements had been prepared immediately before the acquisition,

B      is the aggregate of the values of the consolidated assets of all other entities referred to in paragraph (1)(j) that the bank holding company has acquired control of within the preceding 12 months, as the value for each entity would have been reported in its annual financial statements if those statements had been prepared immediately before the acquisition of control of that entity, and

C      is 10% of the value of the bank holding company’s consolidated assets, as shown in the bank holding company’s last annual statement that was prepared before its first acquisition of control of an entity referred to in paragraph (1)(j) within the preceding 12 months;

(3) Section 930 of the Act is amended by adding the following after subsection (5):

(5.1) In addition to any matters or conditions provided for in this Act that are relevant to the granting of an approval, the Minister may, in considering whether to grant the approval under paragraph (5)(b.1), take into account all matters that he or she considers relevant in the circumstances, including

(a) the stability of the financial system in Canada; and

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

102. The Act is amended by adding the following after section 973.06:

Exceptions to Generally Accepted Accounting Principles

973.07 (1) If, as a result of a change to the accounting principles referred to in subsections 308(4) and 840(4) — whether the change is made before or after this section comes into force — the Superintendent considers, given any prudential considerations that he or she considers relevant, that any amount, calculation or valuation under this Act or the regulations is not appropriate, the Superintendent may specify the amount that is to be used or the calculation or valuation that is to be performed instead.

(2) The Superintendent shall cause a notice of the specification to be published in the Canada Gazette within 60 days after the day on which the specification has effect.

(3) The specification ceases to have effect on the day indicated in the notice, which may be no later than five years after the day on which the specification is made.

103. (1) Paragraph 976.1(1)(b) of the Act is replaced by the following:

(b) paragraphs 468(5)(b.1), (c), (d) and (d.1);

(2) Paragraph 976.1(1)(e) of the Act is replaced by the following:

(e) paragraphs 930(5)(b.1), (c), (d) and (d.1).

PART 2