Bank Act (S.C. 1991, c. 46)

Marginal note:Associates

• 371 (1) For the purpose of determining ownership of a bank, if two persons who each beneficially own shares or membership shares of a bank are associated with each other, those persons are deemed to be a single person who beneficially owns the aggregate number of shares and membership shares of the bank beneficially owned by them.

• Marginal note:Associates

  (2) For the purposes of subsection (1), a person who beneficially owns shares or membership shares of a bank is associated with another person who beneficially owns shares or membership shares of the bank if

  • (a) one person is Her Majesty in right of Canada and the other person is Her Majesty in right of a province or one person is Her Majesty in right of a province and the other person is Her Majesty in right of another province;

  • (b) each person is an agent of Her Majesty in right of Canada or in right of a province;

  • (c) each person is an official, a trustee or an entity referred to in subparagraphs (a)(ii) and (iii) of the definition agent in subsection 370(1);

  • (d) each person is an entity owned or controlled by Her Majesty in right of Canada or in right of a province that is not an agent of Her Majesty and is not empowered to perform a function or duty on behalf of Her Majesty;

  • (e) both persons are trustees of any trusts for the administration of funds to which Her Majesty in right of Canada contributes and of which no official or entity that is an agent of Her Majesty in such right is a trustee;

  • (f) both persons are trustees of any trusts for the administration of funds to which Her Majesty in right of a particular province contributes and of which no official or entity that is an agent of Her Majesty in right of that province is a trustee;

  • (g) one person is a local cooperative credit society and the other person is a central cooperative credit society of which the first person is a member;

  • (h) both persons are local cooperative credit societies that are members of the same central cooperative credit society;

  • (i) one person is a central cooperative credit society, the other person is a federation of cooperative credit societies of which the first is a member, and both persons are incorporated or organized by or pursuant to legislation enacted by the same legislative body;

  • (j) both persons are central cooperative credit societies that are members of the same federation of cooperative credit societies, and both persons and the federation of cooperative credit societies are incorporated or organized by or pursuant to legislation enacted by the same legislative body; or

  • (k) both persons are associated within the meaning of paragraphs (a) to (j) with the same person.

Marginal note:Associates

• 371.1 (1) Despite section 371, for the purpose of determining ownership of a bank by an eligible agent, where two persons, at least one of whom is an eligible agent, are associated with each other, those persons are deemed to be a single eligible agent who beneficially owns the aggregate number of shares of the bank beneficially owned by them.

• Marginal note:Associates

  (2) For the purposes of subsection (1), a person is associated with another person if

  • (a) each person is an agent or agency of Her Majesty in right of Canada;

  • (b) each person is an agent or agency of Her Majesty in right of the same province;

  • (c) each person is an agent or agency of a government of the same foreign country or a political subdivision of the same foreign country;

  • (d) one person is Her Majesty in right of Canada and the other person is an agent or agency of Her Majesty in that right;

  • (e) one person is Her Majesty in right of a province and the other person is an agent or agency of Her Majesty in right of that province; or

  • (f) one person is a government of a foreign country or any political subdivision of a foreign country and the other person is its agent or agency.

DIVISION IIOwnership of Banks

Constraints on Ownership

Marginal note:Significant interest

372 Except as permitted by this Part, no person shall have a significant interest in any class of shares, or in membership shares, of a bank.

372.1 [Repealed, 2001, c. 9, s. 98]

Marginal note:Acquisition of significant interest

• 373 (1) Subject to this Part, no person, or entity controlled by a person, shall, without the approval of the Minister, purchase or otherwise acquire any share or membership share of a bank or purchase or otherwise acquire control of any entity that holds any share or membership share of a bank if

  • (a) the acquisition would cause the person to have a significant interest in any class of shares or in membership shares of the bank, as the case may be; or

  • (b) where the person has a significant interest in a class of shares or in membership shares of the bank, the acquisition would increase the significant interest of the person in that class or in the membership shares, as the case may be.

• Marginal note:Amalgamation, etc., constitutes acquisition

  (2) If the entity that would result from an amalgamation, a merger or a reorganization would have a significant interest in a class of shares or in membership shares of a bank, the entity is deemed to be acquiring a significant interest in that class of shares or in membership shares, as the case may be, through an acquisition for which the approval of the Minister is required under subsection (1).

373.1 [Repealed, 1999, c. 28, s. 18]

Marginal note:Limitations on share holdings

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

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who is a major shareholder of a federal credit union.

• Marginal note:Exception — widely held bank

  (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.

• Marginal note:Exception — widely held bank holding company

  (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;

  • (b) the bank holding company acquired control, within the meaning of those paragraphs, of the bank under section 677 or 678 and the bank holding company has continued to control, within the meaning of those paragraphs, the bank since the day the bank holding company acquired control; or

  • (c) the bank was a subsidiary of another bank that was continued under section 684 as the bank holding company and the bank holding company has continued to control, within the meaning of those paragraphs, the bank since the day it came into existence as a bank holding company.

• Marginal note:Exception — insurance holding companies and certain institutions

  (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:

  • (a) a widely held insurance holding company;

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

  • (c) an eligible foreign institution.

• Marginal note:Exception — other entities

  (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.

• Marginal note:Exception — other entities

  (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

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

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

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

Marginal note:Exception

• 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.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who is a major shareholder of a federal credit union.

• Marginal note:Exception — widely held banks and bank holding companies

  (2) Subsection (1) does not apply to a widely held bank or a widely held bank holding company that controlled, within the meaning of paragraphs 3(1)(a) and (d), one of the applicants for the letters patent of amalgamation and that has controlled, within the meaning of those paragraphs, the amalgamated bank since the effective date of those letters patent.

• Marginal note:Exception — insurance holding companies and certain institutions

  (3) Subsection (1) does not apply to any of the following that controlled, within the meaning of paragraph 3(1)(d), one of the applicants for the letters patent of amalgamation if it has controlled, within the meaning of that paragraph, the amalgamated bank since the effective date of those letters patent:

  • (a) a widely held insurance holding company;

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

  • (c) an eligible foreign institution.

• Marginal note:Exception — other entities

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

• Marginal note:Exception — other entities

  (5) Subsection (1) does not apply to an entity that controls, within the meaning of paragraph 3(1)(d), the amalgamated bank if the entity is controlled, within the meaning of that paragraph, by any of the following:

  • (a) a widely held insurance holding company to which subsection (3) applies that controls the amalgamated bank;

  • (b) an eligible Canadian financial institution to which subsection (3) applies, other than a bank, that controls the amalgamated bank; or

  • (c) an eligible foreign institution to which subsection (3) applies that controls the amalgamated bank.

• Marginal note:Extension

  (6) If general market conditions so warrant and the Minister is satisfied that the person has used the person’s best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which the person must comply with that subsection.

Marginal note:Limitation on share holdings

• 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.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a person who is a major shareholder of a federal credit union.

• Marginal note:Exception

  (2) Subsection (1) does not apply if any of subsections 374(2) to (6) applies to the person in respect of the bank.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the person has used the person’s best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which the person must comply with that subsection.

Marginal note:Obligation of widely held bank

• 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,

  • (a) the widely held bank no longer controls the other bank; or

  • (b) the other bank or the entity that controls the other bank does not have any major shareholder other than the widely held bank or any entity that the widely held bank controls.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a federal credit union that controls a bank.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of a bank with equity of less than two hundred and fifty million dollars or any other amount that is prescribed.

• Marginal note:Extension

  (3) If general market conditions so warrant and the Minister is satisfied that the widely held bank has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.

Marginal note:Obligation of widely held bank

• 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,

  • (a) the widely held bank no longer controls the other bank; or

  • (b) the other bank or the entity that controls the other bank does not have any major shareholder other than the widely held bank or any entity that the widely held bank controls.

• Marginal note:Exception — federal credit union

  (1.1) Subsection (1) does not apply in respect of a federal credit union that controls a bank.

• Marginal note:Extension

  (2) If general market conditions so warrant and the Minister is satisfied that the widely held bank has used its best efforts to be in compliance with subsection (1) on the required day, the Minister may specify a later day as the day from and after which it must comply with that subsection.