Bill C-8

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Non-applicati on re federal institutions associated with a foreign bank	509.1 Subsection 510(1) does not apply to
	(a) an entity referred to in any of paragraphs 468(1)(a) to (f) that is an entity associated with a foreign bank; or
	(b) a Canadian entity that an entity referred to in paragraph (a) controls, or in which such an entity has a substantial investment.
	DIVISION 2
	GENERAL PROHIBITIONS AND EXCEPTIONS
Prohibited activities	510. (1) Except as permitted by this Part, a foreign bank or an entity associated with a foreign bank shall not
	(a) in Canada, engage in or carry on
	(i) any business that a bank is permitted to engage in or carry on under this Act, or
	(ii) any other business;
	(b) maintain a branch in Canada for any purpose;
	(c) establish, maintain or acquire for use in Canada an automated banking machine, a remote service unit or a similar automated service, or in Canada accept data from such a machine, unit or service; or
	(d) acquire or hold control of, or a substantial investment in, a Canadian entity.
Deeming re acts of agent, etc. - foreign banks	(2) For the purposes of this Part, a foreign bank is deemed to be carrying out or to have carried out anything prohibited by subsection (1) if it is carried out by a nominee or agent of the foreign bank acting as such.
Deeming re acts of agent, etc. - associated entities	(3) For the purposes of this Part, an entity associated with a foreign bank is deemed to be carrying out or to have carried out anything prohibited by subsection (1) if it is carried out by a nominee or agent of the entity associated with the foreign bank acting as such.
Exception re accessing accounts	511. Nothing in paragraphs 510(1)(a) to (c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from entering into an arrangement with one or more Canadian financial institutions by which customers of the foreign bank or the entity who are natural persons not ordinarily resident in Canada may access in Canada their accounts located outside Canada through the use of automated banking machines located in Canada and operated by the Canadian financial institution or institutions.
Exception re quotations	512. Nothing in paragraphs 510(1)(a) to (c) is to be construed as prohibiting a foreign bank or an entity associated with a foreign bank from establishing, maintaining or using a private telephone service or similar facility for the purpose of quoting to customers in Canada, or entering with customers in Canada into verbal agreements relating to, foreign exchange, deposit or loan rates if there is no accounting or information processing involved in the private telephone service or similar facility.
Exception re automated services	513. (1) A foreign bank, or an entity associated with a foreign bank, that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of dealing in securities or the business of a cooperative credit society may
	(a) if it is a foreign securities dealer that has also received the approval of the Minister under paragraph 522.22(1)(i), engage in the activities referred to in paragraph 510(1)(c) so long as they relate to its business of dealing in securities engaged in or carried on by it in accordance with provincial laws relating to securities dealing; and
	(b) if it is a foreign cooperative credit society, engage in the activities referred to in paragraph 510(1)(c) so long as they relate to its business as a cooperative credit society engaged in or carried on by it in accordance with provincial laws relating to cooperative credit societies.
Non-applicati on	(2) Paragraph 510(1)(c) does not apply to
	(a) a Canadian entity referred to in any of paragraphs 468(1)(g) to (i);
	(b) a prescribed Canadian entity, other than a permitted Canadian entity, that is controlled by a Canadian entity referred to in paragraph (a); or
	(c) any other Canadian entity, other than a limited commercial entity, that is acquired or held by a foreign bank or an entity associated with a foreign bank in accordance with Divisions 4 and 5, and that has received the approval of the Minister under paragraph 522.22(1)(i).
Exception re real property holding and management	514. Except as may be prescribed, paragraphs 510(1)(a) and (b) do not apply in respect of the holding, managing and other dealing with real property in Canada by a foreign bank or an entity associated with a foreign bank.
Non-applicati on re Canadian entity associated with a foreign bank	515. Paragraphs 510(1)(a) and (b) do not apply to a Canadian entity that is an entity associated with a foreign bank and that is held or acquired in accordance with this Part.
Change of status	516. (1) If a foreign bank maintains a branch or engages in or carries on business in Canada that it maintained or engaged in or carried on before becoming a foreign bank and that branch or business is not permitted by or under this Part, the foreign bank may continue to maintain that branch or engage in or carry on that business for a period of six months from the time it became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Change of status	(2) If a foreign bank holds control of or holds a substantial investment in a Canadian entity and it did so before becoming a foreign bank and that holding is not permitted by or under this Part, the foreign bank may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months from the time it became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Change of status	517. (1) If an entity associated with a foreign bank maintains a branch or engages in or carries on business in Canada that it maintained or engaged in or carried on before the foreign bank became a foreign bank and that branch or business is not permitted by or under this Part, the entity may continue to maintain that branch or engage in or carry on that business for a period of six months from the time the foreign bank became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Change of status	(2) If an entity associated with a foreign bank holds control of or holds a substantial investment in a Canadian entity and it did so before the foreign bank became a foreign bank and that holding is not permitted by or under this Part, the entity may continue to hold control of, or a substantial investment in, the Canadian entity for a period of six months from the time the foreign bank became a foreign bank or for any other shorter period that may be specified or approved by the Minister.
Restriction	517.1 If an order has been made under subsection 973.1(1) in respect of a foreign bank or an entity associated with a foreign bank and section 516 applies to the foreign bank or section 517 applies to the entity, as the case may be, the period under section 516 or 517 may not extend beyond the expiry of the period referred to in the order made under subsection 973.1(1).
Prohibition re guarantee and acceptance of securities and bills	518. (1) Subject to subsections (2) to (4),
	(a) a foreign bank shall not guarantee any securities or accept any bills of exchange or depository bills that are issued by a person resident in Canada and that are intended by the issuer or by any party to the security or bill to be sold or traded in Canada; and
	(b) no person shall participate in any arrangement in connection with a guarantee or acceptance prohibited by paragraph (a).
Exception	(2) Subsection (1) does not apply in respect of the guarantee or acceptance by a foreign bank of securities, bills of exchange or depository bills that are issued by
	(a) a non-bank affiliate of the foreign bank;
	(b) any other person resident in Canada and guaranteed or accepted by
	(i) a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank,
	(ii) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i) in which a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank, holds a substantial investment,
	(iii) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i) that is controlled by a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank,
	(iv) a Canadian entity referred to in any of paragraphs 468(1)(b) to (i) that is a non-bank affiliate of the foreign bank, or
	(v) a prescribed entity;
	(c) a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank;
	(d) a Canadian entity in which a bank that is a subsidiary of the foreign bank, or of an entity associated with the foreign bank, holds a substantial investment;
	(e) a Canadian entity controlled by a bank that is a subsidiary of the foreign bank or of an entity associated with the foreign bank; or
	(f) a prescribed entity.
Exception	(3) Subsection (1) does not apply in respect of
	(a) the business in Canada of an authorized foreign bank; or
	(b) a foreign insurance company in relation to its insurance business in Canada.
Exception	(4) Despite subsection (1), a foreign bank, or an entity associated with a foreign bank, that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of dealing in securities or the business of a cooperative credit society may
	(a) if it is a foreign securities dealer, guarantee any securities or accept any bills of exchange or depository bills in relation to its business of dealing in securities engaged in or carried on by it in accordance with provincial laws relating to securities dealing; and
	(b) if it is a foreign cooperative credit society, guarantee any securities or accept any bills of exchange or depository bills in relation to its business as a cooperative credit society engaged in or carried on by it in accordance with provincial laws relating to cooperative credit societies.
Prohibited activities - non-bank affiliates	519. (1) Despite anything in this Part, but subject to subsection (5) and section 509, a non-bank affiliate of a foreign bank shall not, in Canada,
	(a) engage in the business of accepting deposit liabilities;
	(b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank, other than for
	(i) an authorized foreign bank,
	(ii) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society, or
	(iii) an entity referred to in any of paragraphs 468(1)(a), (c), (d) and (h) or a trust or loan corporation referred to in paragraph 468(1)(g); or
	(c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.
Disclosure of status	(2) Despite anything in this Part, but subject to subsections (4) to (6) and section 509, a non-bank affiliate of a foreign bank that carries on as part of its business the provision of financial services shall not borrow money in Canada from the public without disclosing that
	(a) the non-bank affiliate is not a member institution of the Canada Deposit Insurance Corporation;
	(b) the liability incurred by the non-bank affiliate through the borrowing is not a deposit; and
	(c) the non-bank affiliate is not regulated as a financial institution in Canada.
Manner of disclosure	(3) The disclosure shall be
	(a) in a prospectus, information circular or other offering document or a similar document related to the borrowing or, if there is no such document, in a statement delivered to the lender; or
	(b) in any other manner that may be prescribed.
Exception for certain borrowing	(4) Subsection (2) does not apply
	(a) to a borrowing of a prescribed class or type or to a borrowing in prescribed circumstances or in a prescribed manner; or
	(b) except as may be provided in any regulations, to a borrowing
	(i) from a person in an amount of $150,000 or more, or
	(ii) through the issue of instruments in denominations of $150,000 or more.
Exception - deposit-taking institutions	(5) Subsections (1) and (2) do not apply to a non-bank affiliate that is
	(a) a trust or loan corporation incorporated under an Act of Parliament or of the legislature of a province;
	(b) a Canadian entity referred to in paragraph 468(1)(d) or (h); or
	(c) a prescribed entity.
Exception - insurance company or securities dealer	(6) Subsection (2) does not apply if the non-bank affiliate is
	(a) an insurance company incorporated under an Act of Parliament or of the legislature of a province;
	(b) a bank holding company or an insurance holding company;
	(c) an entity controlled by a bank holding company or an insurance holding company or in which a bank holding company or an insurance holding company has a substantial investment;
	(d) a financial institution referred to in paragraph (g) of the definition ``financial institution'' in section 2; or
	(e) a prescribed entity.
Prohibition re deposits	520. (1) Despite anything in this Part, but subject to subsection (5) and section 509, a foreign bank - or an entity that is associated with a foreign bank and that is incorporated or formed otherwise than by or under an Act of Parliament or of the legislature of a province - shall not, as part of its business in Canada,
	(a) engage in the business of accepting deposit liabilities;
	(b) engage in the business of acting as an agent for the acceptance of deposit liabilities for a foreign bank or an entity associated with a foreign bank, other than for
	(i) an authorized foreign bank,
	(ii) a foreign cooperative credit society that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or carry on the business of a cooperative credit society, or
	(iii) an entity referred to in any of paragraphs 468(1)(a), (c), (d) and (h) or a trust or loan corporation referred to in paragraph 468(1)(g); or
	(c) represent to the public that any instrument issued by it is a deposit or that any liability incurred by it is a deposit.
Disclosure of status	(2) Despite anything in this Part, but subject to subsections (4) to (6) and section 509, a foreign bank or entity referred to in subsection (1) that carries on, as part of its business in Canada, the provision of financial services shall not borrow money in Canada from the public without disclosing that
	(a) the foreign bank or entity is not a member institution of the Canada Deposit Insurance Corporation;
	(b) the liability incurred through the borrowing is not a deposit; and
	(c) the foreign bank or entity is not regulated as a financial institution in Canada.

Bill C-8

DIVISION 2

GENERAL PROHIBITIONS AND EXCEPTIONS