Bill C-9

Liability, Exculpation and Indemnification

207. (1) Directors of a bank who vote for or consent to a resolution of the directors authorizing the issue of a share contrary to subsection 65(1), the issue of a membership share contrary to subsection 79.1(2) or the issue of subordinated indebtedness contrary to section 80 for a consideration other than money are jointly and severally, or solidarily, liable to the bank to make good any amount by which the consideration received is less than the fair equivalent of the money that the bank would have received if the share, membership share or subordinated indebtedness had been issued for money on the date of the resolution.

(2) Directors of a bank who vote for or consent to a resolution of the directors authorizing any of the following are jointly and severally, or solidarily, liable to restore to the bank any amounts so distributed or paid and not otherwise recovered by the bank and any amounts in relation to any loss suffered by the bank:

(a) a redemption or purchase of shares or membership shares contrary to section 71;

(b) a reduction of capital contrary to section 75;

(c) a payment of a dividend or patronage allocation contrary to section 79;

(d) a payment of an indemnity contrary to section 212; or

(e) any transaction contrary to Part XI.

1993. (1) The portion of subsection 208(2) of the Act before paragraph (a) is replaced by the following:

(2) A director who is liable under section 207 is entitled to apply to a court for an order compelling a shareholder, member or other person to pay or deliver to the director

(2) Paragraph 208(2)(a) of the English version of the Act is replaced by the following:

(a) any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212; or

(3) Paragraph 208(3)(a) of the English version of the Act is replaced by the following:

(a) order a shareholder, member or other person to pay or deliver to a director any money or property that was paid or distributed to the shareholder, member or other person contrary to section 71, 75, 79 or 212 or any amount referred to in paragraph (2)(b);

(4) Paragraph 208(3)(b) of the Act is replaced by the following:

(b) order a bank to return or issue shares or membership shares to a person from whom the bank has purchased, redeemed or otherwise acquired shares or membership shares; or

1994. The heading “Amendments” before section 215 of the Act is replaced by the following:

Amendments — Letters Patent

1995. The Act is amended by adding the following after section 216:

1996. The portion of subsection 217(1) of the Act before paragraph (a) is replaced by the following:

217. (1) The directors of a bank that is not a federal credit union may make, amend or repeal any by-laws, in the manner set out in subsections (2) and (3) and sections 218 to 222, to

1997. Subsection 223(1) of the Act is replaced by the following:

223. (1) On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including banks that are not federal credit unions and bank holding companies, the Minister may issue letters patent amalgamating and continuing the applicants as one bank, other than a federal credit union.

1998. (1) Subsection 224(2) of the Act is amended by adding the following after paragraph (a):

(2) Paragraphs 224(2)(c) and (d) of the Act are replaced by the following:

(c) the manner in which the shares or membership shares of each applicant are to be converted into shares or other securities, or into membership shares, of the amalgamated bank;

(d) if any shares or membership shares of an applicant are not to be converted into shares or other securities, or into membership shares, of the amalgamated bank, the amount of money or securities that the holders of those shares are to receive in addition to or in lieu of shares or other securities, or membership shares, of the amalgamated bank;

(3) Subsection 224(3) of the Act is replaced by the following:

(3) If shares or membership shares of one of the applicants are held by or on behalf of another of the applicants, other than shares or membership shares held in the capacity of a personal representative or by way of security, the amalgamation agreement must provide for the cancellation of those shares or membership shares when the amalgamation becomes effective without any repayment of capital in respect of them, and no provision may be made in the agreement for the conversion of those shares or membership shares into shares or membership shares of the amalgamated bank.

1999. Section 225 of the English version of the Act is replaced by the following:

225. An amalgamation agreement must be submitted to the Superintendent for approval, and any approval of the agreement under subsection 226(4) by the holders of any class or series of shares of an applicant, and, if applicable, by the members, is invalid unless, before the date of the approval, the Superintendent has approved the agreement in writing.

2000. (1) Subsection 226(1) of the Act is replaced by the following:

226. (1) The directors of each applicant must submit an amalgamation agreement for approval to a meeting of the shareholders of the applicant — or, if the applicant is a federal credit union, to a meeting of its members and to a meeting of its shareholders, if any.

(2) Subsections 226(4) and (5) of the Act are replaced by the following:

(4) Subject to subsection (3), an amalgamation agreement is approved when the shareholders of each applicant bank or body corporate have approved the amalgamation by special resolution or, if an applicant bank is a federal credit union, the members and shareholders, if any, have approved the amalgamation by separate special resolutions.

(5) An amalgamation agreement may provide that, at any time before the issue of letters patent of amalgamation, the agreement may be terminated by the directors of an applicant even if the agreement has been approved by the shareholders — or the members and shareholders, if any — of all or any of the applicant banks or bodies corporate.

2001. The Act is amended by adding the following after section 226:

2002. (1) The portion of subsection 227(1) of the Act before paragraph (a) is replaced by the following:

227. (1) A bank, other than a federal credit union, may, without complying with sections 224 to 226, amalgamate with one or more bodies corporate that are incorporated by or under an Act of Parliament if the body or bodies corporate, as the case may be, are wholly-owned subsidiaries of the bank and

(2) The portion of subsection 227(2) of the Act before paragraph (a) is replaced by the following:

(2) Two or more bodies corporate incorporated by or under an Act of Parliament, none of which is a federal credit union, may amalgamate and continue as one bank, without complying with sections 224 to 226 if

2003. Subsection 228(4) of the Act is amended by striking out “and” at the end of paragraph (g) and by replacing paragraph (h) with the following:

(i) the best interests of the financial system in Canada, including, if the amalgamated bank will be a federal credit union, the best interests of the cooperative financial system in Canada.

2004. Section 233 of the Act is replaced by the following:

233. A sale agreement must be sent to the Superintendent before it is submitted to shareholders or to members and shareholders, as the case may be, of the selling bank under subsection 234(1).

2005. (1) Subsection 234(1) of the Act is replaced by the following:

234. (1) The directors of a selling bank must submit a sale agreement for approval to a meeting of shareholders, or, if the bank is a federal credit union, to a meeting of members and shareholders of the bank and, subject to subsection (3), to the holders of each class or series of shares of the bank.

(2) Subsection 234(4) of the Act is replaced by the following:

(4) A sale agreement is approved when the shareholders and the holders of each class or series of shares entitled to vote separately as a class or series under subsection (3) of the selling bank have approved the sale by special resolution and, if the selling bank is a federal credit union, the members have also approved the sale by a separate special resolution.

2006. Section 235 of the Act is replaced by the following:

235. If a special resolution approving a sale under subsection 234(4) so states, the directors of a selling bank may, subject to the rights of third parties, abandon the sale without further approval of the shareholders or the members and shareholders, as the case may be.

2007. (1) Paragraph 238(1)(b) of the Act is replaced by the following:

(b) minutes of meetings and resolutions of shareholders and members;

(2) Paragraph 238(2)(c) of the Act is replaced by the following:

(c) records showing, for each customer of the bank, on a daily basis, particulars of the transactions between the bank and that customer and the balance owing to or by the bank in respect of that customer and, if the bank is a federal credit union, whether the customer is a member of the federal credit union.

2008. (1) Subsection 239(5) of the Act is replaced by the following:

(5) Shareholders, members and creditors of a bank and their personal representatives may examine the records referred to in subsection 238(1) during the usual business hours of the bank and may take extracts from them free of charge or have copies of them made on payment of a reasonable fee. If the bank is a distributing bank, any other person may on payment of a reasonable fee examine those records during the usual business hours of the bank and take extracts from them or have copies of them made.

(2) Subsection 239(6) of the Act is replaced by the following:

(6) Every shareholder and every member of a bank is entitled, on request made not more frequently than once in each calendar year, to receive, free of charge, one copy of the by-laws of the bank.

2009. (1) Subsection 240(1) of the Act is replaced by the following:

240. (1) A person who is entitled to a basic list of shareholders or members of a bank (in this section referred to as the “applicant”) may request the bank to furnish the applicant with a basic list within ten days after receipt by the bank of the affidavit referred to in subsection (2) and, on payment of a reasonable fee by the applicant, the bank must comply with the request.

(2) Subsections 240(3) and (4) of the Act are replaced by the following:

(3) A shareholder, member or creditor of a bank or their personal representative — or, if the bank is a distributing bank, any person — is entitled to a basic list of shareholders or members of the bank.

(4) A basic list of shareholders or members of a bank consists of a list of shareholders or members that is made up to a date not more than ten days before the receipt of the affidavit referred to in subsection (2) and that sets out

(a) the names of the shareholders or members, as the case may be, of the bank;

(b) the number of shares owned by each shareholder, or the number of membership shares owned by each member, as the case may be; and

(c) the address of each shareholder or member as shown in the records of the bank.

(3) Subsection 240(5) of the English version of the Act is replaced by the following:

(5) A person requiring a bank to supply a basic list may, if the person states in the accompanying affidavit that supplemental lists are required, request the bank or its agent, on payment of a reasonable fee, to provide supplemental lists of shareholders or members setting out any changes from the basic list in the names and addresses of the shareholders or members, as the case may be, and the number of shares owned by each shareholder, or the number of membership shares owned by each member, as the case may be, for each business day following the date to which the basic list is made up.

2010. Section 241 of the English version of the Act is replaced by the following:

241. A person requiring a bank to supply a basic list or a supplemental list of shareholders or members may also require the bank to include in that list the name and address of any known holder of an option or right to acquire shares of the bank.

2011. The portion of section 242 of the Act before paragraph (b) is replaced by the following:

242. No person shall use a list of shareholders or members obtained under section 240 except in connection with

(a) an effort to influence the voting of shareholders or members of the bank;

2012. Subsection 245(1) of the Act is replaced by the following:

245. (1) If the Superintendent is of the opinion that it is incompatible with the fulfilment of the Superintendent’s responsibilities under this Act for a bank to maintain, in another country, copies of records referred to in section 238 or of its central securities register or members register or for a bank to process, in another country, information or data relating to the preparation and maintenance of those records or of its central securities register or members register — or if the Superintendent is advised by the Minister that, in the opinion of the Minister, it is not in the national interest for a bank to do any of those activities in another country — the Superintendent must direct the bank to not maintain those copies, or to not process the information or data, as the case may be, in that other country or to maintain those copies or to process the information or data only in Canada.

2013. Subsection 246(1) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

2014. Subsection 248(3) of the Act is replaced by the following:

(3) Shareholders and creditors of a bank and their personal representatives — and, if the bank is a federal credit union, its members and their personal representatives — may examine the central securities register during the usual business hours of the bank and may take extracts from it free of charge or have copies of it made on payment of a reasonable fee. If the bank is a distributing bank, any other person may, on payment of a reasonable fee, examine the central securities register during the usual business hours of the bank and take extracts from it or have copies of it made.

2015. The Act is amended by adding the following after section 254:

2016. The definition “share” in subsection 265(1) of the Act is amended by striking out “and” at the end of paragraph (a) by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

2017. (1) Section 271 of the Act is amended by adding the following after subsection (1):

(2) Paragraph 271(2)(a) of the Act is replaced by the following:

(a.1) a put, call, option or other right or obligation to purchase or sell a security of the bank; and

2018. (1) The portion of subsection 308(1) of the Act before paragraph (a) is replaced by the following:

308. (1) The directors of a bank must place before the shareholders or members, as the case may be, at every annual meeting

(2) Paragraph 308(1)(c) of the Act is replaced by the following:

(c) any further information respecting the financial position of the bank and the results of its operations required by the by-laws of the bank to be placed before the shareholders or members at the annual meeting.

(3) Paragraph 308(2)(d) of the Act is replaced by the following:

(d) a statement of changes in shareholders’ equity for the financial year, if the bank is not a federal credit union, or a statement of changes in the members’ and shareholders’ equity of the bank for the financial year, if it is a federal credit union,

(4) Subsection 308(3) of the Act is amended by striking out “and” at the end of paragraph (a) any by adding the following after paragraph (a):

2019. Subsection 310(2) of the Act is replaced by the following:

(2) Subject to this section, the shareholders and members of a bank and their personal representatives may, on request, examine the statements referred to in subsection (1) during the usual business hours of the bank and may take extracts from those statements free of charge.

2020. Subsections 311(1) and (2) of the Act are replaced by the following:

311. (1) A bank must, not later than 21 days before the date of each annual meeting or before the signing of a resolution under paragraph 152(1)(b) in lieu of the annual meeting, send to each shareholder or, in the case of a federal credit union, to each member and shareholder, if any, at their recorded address a copy of the documents referred to in subsections 308(1) and (3), unless that time period is waived by the shareholder or member, as the case may be.

(2) A bank is not required to comply with subsection (1) with respect to a person who has informed the bank, in writing, that the person does not wish to receive the annual statement.

2021. (1) Subsection 312(1) of the English version of the Act is replaced by the following:

312. (1) Subject to subsection (2), a bank must send to the Superintendent a copy of the documents referred to in subsections 308(1) and (3) not later than 21 days before the date of each annual meeting of shareholders or members of the bank.

(2) Subsection 312(2) of the Act is replaced by the following:

(2) If a bank’s shareholders or members sign a resolution under paragraph 152(1)(b) in lieu of an annual meeting, the bank must send a copy of the documents referred to in subsections 308(1) and (3) to the Superintendent not later than 30 days after the signing of the resolution.

2022. Section 314 of the Act is replaced by the following:

314. (1) The shareholders of a bank, or the members of a federal credit union, must, by ordinary resolution at the first meeting of shareholders or members, as the case may be, and at each succeeding annual meeting, appoint a firm of accountants to be the auditor of the bank until the close of the next annual meeting.

(2) The shareholders of a bank, or the members of a federal credit union, may, by ordinary resolution at the first meeting of shareholders or members, as the case may be, and at each succeeding annual meeting, appoint two firms of accountants to be the auditors of the bank until the close of the next annual meeting.

(3) The remuneration of the auditor or auditors may be fixed by ordinary resolution of the shareholders or members of the federal credit union but, if not so fixed, must be fixed by the directors.

2023. Subparagraph 315(2)(b)(ii) of the Act is replaced by the following:

(ii) beneficially owns or controls, directly or indirectly, a material interest in the shares or membership shares of the bank or of any affiliate of the bank, or

2024. Subsection 317(1) of the Act is replaced by the following:

317. (1) The shareholders of a bank or the members of a federal credit union may, by ordinary resolution at a special meeting, revoke the appointment of an auditor.

2025. Paragraph 318(1)(b) of the Act is replaced by the following:

(b) the appointment of the auditor is revoked by the Superintendent or by the shareholders or, if the bank is a federal credit union, by the members.

2026. Subsections 320(1) to (3) of the Act are replaced by the following:

320. (1) The auditor or auditors of a bank are entitled to receive notice of every meeting of shareholders and, if the bank is a federal credit union, every meeting of its members and, at the expense of the bank, to attend and be heard at the meeting on matters relating to the duties of the auditor or auditors.

(2) If a director, shareholder or member of a bank, whether or not that person is entitled to vote at the meeting, gives written notice, not less than 10 days before the meeting, to an auditor or former auditor of the bank that the director, member or shareholder wishes the auditor’s attendance at the meeting, the auditor or former auditor must attend the meeting, at the expense of the bank, and answer questions relating to the auditor’s or former auditor’s duties as auditor.

(3) The person who gives notice under subsection (2) must send concurrently a copy of the notice to the bank and the bank must, without delay, send a copy of it to the Superintendent.

2027. (1) Paragraphs 321(1)(b) and (c) of the Act are replaced by the following:

(b) receives a notice or otherwise learns of a meeting of shareholders, or, if the bank is a federal credit union, of a meeting of members, called for the purpose of revoking the appointment of the auditor, or

(c) receives a notice or otherwise learns of a meeting of directors or shareholders, or, if the bank is a federal credit union, of a meeting of members, at which another firm of accountants is to be appointed in its stead, whether because of the auditor’s resignation or revocation of appointment or because the auditor’s term of office has expired or is about to expire,

(2) Subsection 321(2) of the Act is replaced by the following:

(2) The bank must send a copy of the statements referred to in subsections (1) and (1.1) without delay to every shareholder, or, if the bank is a federal credit union, to every member, entitled to vote at the annual meeting of shareholders or of members and to the Superintendent.

2028. Subsection 323(1) of the Act is replaced by the following:

323. (1) The auditor or auditors of a bank must make any examination that the auditor or auditors consider necessary to enable the auditor or auditors to report on the annual statement and on other financial statements required by this Act to be placed before the shareholders or, if the bank is a federal credit union, the members, except any annual statements or parts of those statements that relate to the period referred to in subparagraph 308(1)(a)(ii).

2029. Subsection 325(2) of the Act is replaced by the following:

(2) The Superintendent may, in writing, require that the auditor or auditors of a bank make a particular examination relating to the adequacy of the procedures adopted by the bank for the safety of its creditors and shareholders and, if the bank is a federal credit union, for the safety of its members, or any other examination as, in the Superintendent’s opinion, the public interest may require, and report to the Superintendent.

2030. Subsection 326(1) of the Act is replaced by the following:

326. (1) The auditor or auditors must, not less than 21 days before the date of the annual meeting of the shareholders of the bank or, if the bank is a federal credit union, of the annual meeting of the members, make a report in writing to the shareholders or members, as the case may be, on the annual statement referred to in subsection 308(1).

2031. Section 327 of the Act is replaced by the following:

327. (1) The auditor or auditors of a bank must, if required by the shareholders or, if the bank is a federal credit union, by the members or shareholders, if any, audit and report to the shareholders or members, as the case may be, on any financial statement submitted by the directors to the shareholders or members, and the report must state whether, in their opinion, the financial statement presents fairly the information required by the shareholders or members.

(2) A report of the auditor or auditors made under subsection (1) must be attached to the financial statement to which it relates and a copy of the statement and report must be sent by the directors to the Superintendent, to every shareholder and, if the bank is a federal credit union, to every member and shareholder, if any.

2032. Paragraph 332(3)(b) of the Act is replaced by the following:

(b) otherwise inform the shareholders, and, if the bank is a federal credit union, its members, and the Superintendent of the error or misstatement.

2033. Paragraph 335(1)(c) of the Act is replaced by the following:

(c) an order directing that any amount adjudged payable by a defendant in the action be paid, in whole or in part, directly to the following instead of to the bank or the subsidiary:

(i) if the bank is not a federal credit union, former and present security holders of the bank or subsidiary, or

2034. Subsection 336(1) of the Act is replaced by the following:

336. (1) An application made or an action brought or intervened in under subsection 334(1) or section 338 need not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to the bank or its subsidiary has been or might be approved by the shareholders or members of the bank, or by the shareholders of the subsidiary, but evidence of approval by the shareholders or the members, as the case may be, may be taken into account by the court in making an order under section 335.

2035. (1) Subsection 338(1) of the Act is replaced by the following:

338. (1) If the name of a person is alleged to be or to have been wrongly entered or retained in, or wrongly deleted or omitted from, the securities register, the members register or any other record of a bank, the bank, a security holder of the bank, a member of the bank or any aggrieved person may apply to a court for an order that the register or record be rectified.

(2) Subsection 338(3) of the Act is replaced by the following:

(3) In connection with an application under this section, the court may make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order requiring the register or other record of the bank to be rectified;

(b) an order restraining a bank from calling or holding a meeting of shareholders or members, or paying a dividend or patronage allocation, before the rectification;

(c) an order determining the right of a party to the proceedings to have the party’s name entered or retained in, or deleted or omitted from, the register or records of the bank, whether the issue arises between two or more security holders or alleged security holders, or two or more members or alleged members, or between the bank and any security holder or alleged security holder or member or alleged member; and

(d) an order compensating a party who has incurred a loss.

2036. Subsection 342(1) of the Act is replaced by the following:

342. (1) A bank that has no property and no liabilities may apply to the Minister for letters patent dissolving the bank if it is authorized by

(a) in the case of a bank that is not a federal credit union, a special resolution of the shareholders or, if there are no shareholders, by a resolution of all the directors; or

2037. (1) Subsection 343(1) of the Act is amended by striking out “or” at the end of paragraph (a) and by replacing paragraph (b) with the following:

(b) may, if the bank is not a federal credit union, be initiated by way of a proposal made by a shareholder who is entitled to vote at an annual meeting of shareholders in accordance with sections 143 and 144; or

(2) Subsection 343(2) of the English version of the Act is replaced by the following:

(2) A notice of any meeting at which the voluntary liquidation and dissolution of a bank is to be proposed must set out the terms of the proposal.

2038. Section 344 of the Act is replaced by the following:

344. If the voluntary liquidation and dissolution of a bank is proposed, the bank may apply to the Minister for letters patent dissolving the bank

(a) if, in the case of a bank that is not a federal credit union, it is authorized by a special resolution of the shareholders or, if the bank has issued more than one class of shares, by special resolution of each class of shareholders whether or not those shareholders are otherwise entitled to vote; or

2039. Paragraphs 345(4)(c) and (d) of the Act are replaced by the following:

(c) proceed to collect its property, dispose of property that is not to be distributed in kind to its shareholders or members, as the case may be, discharge all its obligations and do all other acts required to liquidate its business; and

(d) after giving the notice required under paragraphs (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, among its shareholders, according to their respective rights, or its members, as the case may be.

2040. (1) The portion of paragraph 349(g) of the Act before subparagraph (i) is replaced by the following:

(g) an order determining and enforcing the duty or liability of any present or former director, officer, shareholder or member

(2) Paragraphs 349(l) and (m) of the Act are replaced by the following:

(l) subject to sections 356 to 358, an order approving any proposed, interim or final distribution to shareholders or members, as the case may be, or incorporators, in money or in property;

(m) an order disposing of any property belonging to creditors, shareholders, members and incorporators who cannot be found;

(3) The portion of paragraph 349(n) of the Act before subparagraph (i) is replaced by the following:

(n) on the application of any director, officer, shareholder, member, incorporator, creditor or the liquidator,

2041. (1) Paragraph 350(1)(b) of the Act is replaced by the following:

(b) the powers of the directors, shareholders and members are vested in the liquidator and cease to be vested in the directors, shareholders and members, except as specifically authorized by the court.

(2) Subsection 350(2) of the Act is replaced by the following:

(2) A liquidator may delegate any of the powers vested by paragraph (1)(b) to the directors, shareholders or members, if any.

2042. Section 351 of the Act is replaced by the following:

351. When making an order for the liquidation of a bank, or at any later time, the court may appoint any person, including a director, an officer, a shareholder or a member of the bank or any other bank, as liquidator of the bank.

2043. (1) Paragraph 353(1)(f) of the Act is replaced by the following:

(f) maintain separate lists of members and of each class of creditors, shareholders and other persons having claims against the bank;

(2) Paragraph 353(1)(i) of the Act is replaced by the following:

(i) after the final accounts are approved by the court, distribute any remaining property of the bank among the shareholders, incorporators or members, according to their respective rights.

2044. (1) Paragraph 357(1)(a) of the Act is replaced by the following:

(a) for approval of the final accounts of the liquidator and for an order permitting the distribution, in money or in kind, of the remaining property of the bank to its shareholders, or members, if any, or to the incorporators, according to their respective rights; or

(2) Subsections 357(2) and (3) of the Act are replaced by the following:

(2) If a liquidator fails to make the application required by subsection (1), a shareholder of the bank or, if there are no shareholders of the bank, an incorporator — or, if the bank is a federal credit union, a member or shareholder of the federal credit union or, if there are no members or shareholders, an incorporator — may apply to the court for an order for the liquidator to show cause why a final accounting and distribution should not be made.

(3) A liquidator must give notice of their intention to make an application under subsection (1) to the Superintendent, to each inspector appointed under section 349, to each shareholder of the bank or, if there are no shareholders, to each incorporator and to any person who provided a security or fidelity bond for the liquidation. If the bank is a federal credit union, the liquidator must also give the notice to each member of the federal credit union.

2045. Section 359 of the Act is replaced by the following:

359. (1) If in the course of the liquidation of a bank that is not a federal credit union the shareholders resolve, or the liquidator proposes, to exchange all or substantially all of the remaining property of the bank for securities of another entity that are to be distributed to the shareholders or to the incorporators — or to distribute all or part of the remaining property of the bank to the shareholders or to the incorporators in kind — a shareholder or incorporator may apply to the court for an order requiring the distribution of the remaining property of the bank to be in money.

(3) On an application under subsection (1) or (2) , the court may order

(a) all of the remaining property of the bank to be converted into and distributed in money; or

(b) the claim of any person applying under this section to be satisfied by a distribution in money.

(4) If an order is made by a court under paragraph (3)(b), the court

(a) must fix a fair value on the share of the property of the bank attributable to the person;

(b) may in its discretion appoint one or more appraisers to assist the court in fixing a fair value in accordance with paragraph (a); and

(c) must render a final order against the bank in favour of the person for the amount of the share of the bank’s property attributable to the person.

2046. Section 361 of the Act is replaced by the following:

361. In sections 363 and 364, “shareholder”, “member” and “incorporator” include the heirs and personal representatives of a shareholder, member or incorporator, respectively.

2047. (1) Subsection 363(1) of the Act is replaced by the following:

363. (1) Despite the dissolution of a bank, a shareholder, member or incorporator to whom any of its property has been distributed is liable to any person claiming under subsection 362(1) to the extent of the amount received by that shareholder, member or incorporator on the distribution.

(2) Subsection 363(3) of the Act is replaced by the following:

(3) A court may order an action referred to in subsections (1) and (2) to be brought against the persons who were shareholders, members or incorporators as a class, subject to any conditions that the court thinks fit.

(3) Paragraphs 363(4)(a) and (b) of the Act are replaced by the following:

(a) add as a party to the proceedings each person found by the plaintiff to have been a shareholder, member or incorporator;

(b) determine, subject to subsection (1), the amount that each person who was a shareholder, member or incorporator must contribute towards satisfaction of the plaintiff’s claim; and

2048. Section 364 of the Act is replaced by the following:

364. If a creditor, shareholder, member or incorporator to whom property is to be distributed on the dissolution of a bank cannot be found, the portion of the property to be distributed to that creditor, shareholder, member or incorporator is to be converted into money and paid in accordance with section 366.

2049. Subsections 366(1) and (2) of the Act are replaced by the following:

366. (1) Despite the Winding-up and Restructuring Act, if the business of a bank is being wound up, the liquidator or the bank must pay to the Minister on demand and in any event before the final winding-up of that business any amount that is payable by the liquidator or the bank to a creditor, shareholder, member or incorporator of the bank to whom payment of that amount has not, for any reason, been made.

(2) If a liquidator or a bank makes a payment to the Minister under subsection (1) with respect to a creditor, shareholder, member or incorporator, the liquidator or bank must concurrently forward to the Minister all documents, records and registers in the possession of the liquidator or bank that relate to the entitlement of the creditor, shareholder, member or incorporator.

2050. (1) Subsection 371(1) of the Act is replaced by the following:

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.

(2) The portion of subsection 371(2) of the Act before paragraph (a) is replaced by the following:

(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

2051. Sections 372 and 373 of the Act are replaced by the following:

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.

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.

(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).

2052. Section 374 of the Act is amended by adding the following after subsection (1):

2053. Section 374.1 of the Act is amended by adding the following after subsection (1):

2054. Section 375 of the Act is amended by adding the following after subsection (1):

2055. Section 376 of the Act is amended by adding the following after subsection (1):

2056. Section 376.01 of the Act is amended by adding the following after subsection (1):

2057. Section 376.1 of the Act is renumbered as subsection 376.1(1) and is amended by adding the following:

2058. Section 376.2 of the Act is renumbered as subsection 376.2(1) and is amended by adding the following:

2059. Section 377 of the Act is amended by adding the following after subsection (1):

2060. Section 377.1 of the Act is amended by adding the following after subsection (1):

2061. The Act is amended by adding the following after section 377.1:

2062. Sections 379 to 381 of the Act are replaced by the following:

379. A bank must not, unless the acquisition of the share or membership share has been approved by the Minister, record in its securities register or members register, as the case may be, a transfer or issue of any share or membership share of the bank to any person or to any entity controlled by a person if

(a) the transfer or issue of the share or membership share would cause the person to have a significant interest in any class of shares or in membership shares of the bank; or

(b) the person has a significant interest in a class of shares or in membership shares of the bank and the transfer or issue of the share or membership share would increase the significant interest of the person in that class of shares or in membership shares.

380. (1) On application by a bank, other than a bank with equity of eight 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.

381. Despite section 379, if, as a result of a transfer or issue of shares of a class of shares, or of membership shares, of a bank to a person, the total number of shares of that class registered in the securities register of the bank, or the total number of membership shares registered in the members register of the bank, as the case may be, in the name of that person would not exceed 5,000 and would not exceed 0.1 per cent of the outstanding shares of that class or of the outstanding membership shares, as the case may be, the bank is entitled to assume that no person is acquiring or increasing a significant interest in that class of shares or in membership shares of the bank as a result of that issue or transfer of shares or membership shares.

2063. Section 382 of the Act is amended by adding the following after subsection (1):

2064. The Act is amended by adding the following after section 382:

2065. Paragraph 383(1)(a) of the Act is replaced by the following:

(a) the Superintendent has, by order, directed the bank to increase its capital and shares or membership shares of the bank are issued and acquired in accordance with the terms and conditions, if any, that may be specified in the order; or

2066. Paragraphs 384(a) and (b) of the Act are replaced by the following:

(a) the purchase or other acquisition of any number or percentage of shares or membership shares of a bank that may be required in a particular transaction or series of transactions; or

(b) the purchase or other acquisition of up to a specified number or percentage of shares or membership shares of a bank within a specified period.

2067. Section 385 of the Act is amended by adding the following after subsection (1):

2068. (1) The portion of subsection 392(1) of the Act before paragraph (b) is replaced by the following:

392. (1) If, with respect to any bank, a particular person contravenes section 372, subsection 373(1), 374(1) or 375(1), section 376.1 or 376.2, subsection 377(1) or section 377.1 or 377.2 or fails to comply with an undertaking referred to in subsection 390(2) or with any term or condition imposed under section 397, no person, and no entity controlled by the particular person, shall, in person, by proxy or by delegate, exercise any voting rights

(a) that are attached to shares of the bank beneficially owned by the particular person or any entity controlled by the particular person;

(2) Paragraph 392(2)(a) of the Act is replaced by the following:

(a) the shares or membership shares to which the contravention relates have been disposed of;

2069. (1) Paragraph 396(1)(h) of the Act is replaced by the following:

(h) the best interests of the financial system in Canada, including, if the bank is a federal credit union, the best interests of the cooperative financial system in Canada.

(2) 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 eight billion dollars or more that is not a federal credit union; or

(3) Section 396 of the Act is amended by adding the following after subsection (2):

2070. The Act is amended by adding the following after section 401.1:

2071. (1) The portion of subsection 401.2(1) of the Act before paragraph (a) is replaced by the following:

401.2 (1) No bank is to record in its securities register or members register a transfer or issue of any share or membership share of the bank to

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

(2) Despite subsection (1), a bank may record in its securities register or members register a transfer or issue of any share or membership 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 any agent or agency of a foreign country if the bank is a subsidiary of the foreign bank or foreign institution.

2072. Subsection 401.3(2) of the Act is replaced by the following:

(3) Subsections (1) and (2) do 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 any agent or agency of a foreign country and that has a significant interest in a class of shares, or in membership shares, of a bank that is a subsidiary of the foreign bank or foreign institution.

2073. Subsection 402(1) of the Act is replaced by the following:

402. (1) If, with respect to any bank, a person contravenes section 372 or subsection 373(1), 374(1) or 375(1) or section 376.1 or 376.2, subsection 377(1) or section 377.1 or 377.2 or fails to comply with an undertaking referred to in subsection 390(2) or with any terms and conditions imposed under section 397, the Minister may, if the Minister considers it in the public interest to do so, by order,

(a) dispose of any number of shares of the bank beneficially owned by any of those persons that the Minister specifies in the order, within the time specified in the order and in the proportion, if any, as between the person and the persons controlled by that person that is specified in the order;

2074. Section 402.1 of the Act is replaced by the following:

402.1 If subsection 402(1) applies, the Minister may, on application by the bank, permit the bank to apply to be continued as a body corporate under any Act of Parliament referred to in subsection 39.1(1) or 39.2(1) instead of, or in addition to, issuing an order under subsection 402(1).

2075. Subsection 403(2) of the Act is replaced by the following:

(2) A court may, on an application under subsection (1), make any order that the circumstances require to give effect to the terms of the direction, including requiring the bank concerned to sell the shares, or to redeem, purchase or transfer to another member the membership shares, that are the subject-matter of the direction.

2076. (1) Paragraphs 405(1)(a) and (b) of the Act are replaced by the following:

(a) require any person in whose name a share or membership share of the bank is held to submit a declaration setting out

(i) the beneficial ownership of the share or membership share, and

(ii) any other information that the directors consider relevant for the purposes of this Part;

(b) require any person who wishes to have a transfer of a share or membership share registered in the name of, or to have a share or membership share issued to, that person to submit a declaration referred to in paragraph (a) as though the person were the holder of that share or membership share; and

(2) Subsection 405(2) of the Act is replaced by the following:

(2) The Superintendent may, by order, direct a bank to obtain from any person in whose name a share or membership share of the bank is held a declaration setting out the name of every entity controlled by that person and containing information concerning

(a) the ownership or beneficial ownership of the share or membership share; and

(b) such other related matters as are specified by the Superintendent.

(3) Subsection 405(4) of the Act is replaced by the following:

(4) If, under this section, a declaration is required to be submitted by a shareholder, member or other person in respect of the issue or transfer of any share or membership share, a bank may refuse to issue the share or membership share or register the transfer unless the required declaration is submitted.

2077. The definition “participating share” in subsection 464(1) of the Act is replaced by the following:

“participating share” means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution and includes a membership share.

2078. (1) Paragraph 486(1)(a) of the Act is replaced by the following:

(a) is a person who has a significant interest in a class of shares or in membership shares of the bank;

(2) Paragraph 486(1)(g) of the English version of the Act is replaced by the following:

(g) is a person, or forms part of a class of persons, designated under subsection (3) or (4) as, or deemed under subsection (5) to be, a related party of the bank.

2079. Paragraphs 487(2)(a) and (b) of the Act are replaced by the following:

(a) the issue of shares of any class of shares, or of membership shares, of a bank when fully paid for in money or when issued

(i) in accordance with any provisions for the conversion of other issued and outstanding securities of the bank into shares of that class of shares, or into membership shares,

(ii) as a share or membership share dividend,

(iii) in exchange for shares, or membership shares, however designated, of a body corporate that has been continued as a bank under Part III,

(iv) in accordance with the terms of an amalgamation under Part VI,

(v) by way of consideration in accordance with the terms of a sale agreement under Part VI, or

(vi) with the approval in writing of the Superintendent, in exchange for shares of another body corporate;

(b) the payment of dividends or patronage allocations by a bank;

2080. Paragraph 647(2)(c) of the Act is replaced by the following:

(c) each person who is newly elected as a director of the bank and who was not proposed for election by anyone involved in the management of the bank,

2081. Subsection 649(1) of the Act is replaced by the following:

649. (1) If the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the powers, duties, functions, rights and privileges of the directors of the bank and of the officers of the bank responsible for its management are suspended. If the bank is a federal credit union, the powers of the members to make, amend or repeal by-laws are also suspended.

2082. Section 655 of the Act is replaced by the following:

655. In the case of the winding-up of a bank, the expenses resulting from the taking of control of the bank under subsection 648(1) and assessed against and paid by other banks and by authorized foreign banks under section 23 of the Office of the Superintendent of Financial Institutions Act, and interest in respect of the expenses at any rate that is specified by the Superintendent, constitute a claim of Her Majesty in right of Canada against the assets of the bank that ranks after all other claims but prior to any claim in respect of the shares or membership shares of the bank.

2083. Subsection 682(1) of the Act is replaced by the following:

682. (1) A body corporate incorporated under the Canada Business Corporations Act or any other Act of Parliament, including a bank but not including a federal credit union, may apply to the Minister for letters patent continuing the body corporate as a bank holding company under this Part.

2084. Subsection 803(1) of the Act is replaced by the following:

803. (1) On the joint application of two or more bodies corporate incorporated by or under an Act of Parliament, including banks and bank holding companies but not including federal credit unions, the Minister may issue letters patent amalgamating and continuing the applicants as one bank holding company.

2085. (1) The portion of section 965 of the Act before paragraph (a) is replaced by the following:

965. A notice or document required by this Act or the regulations or by the incorporating instrument or by-laws of a bank or a bank holding company to be sent to a shareholder, member or director of the bank, or to a shareholder or director of the bank holding company, may be sent by prepaid mail addressed to, or may be delivered personally to,

(2) Section 965 of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

2086. Section 967 of the Act is replaced by the following:

967. (1) A notice or document sent by mail in accordance with section 965 to a shareholder, member or director is deemed to be received by that person at the time it would be delivered in the ordinary course of mail unless there are reasonable grounds for believing that that person did not receive the notice or document at that time or at all.

(2) If a bank or bank holding company sends a notice or document to a shareholder or member in accordance with section 965 and it is returned on two consecutive occasions because the shareholder or member cannot be found, the bank or bank holding company is not required to send any further notices or documents to the shareholder or member until it is informed in writing of their new address.

2087. (1) Subsection 969(1) of the English version of the Act is replaced by the following:

969. (1) A certificate issued on behalf of a bank or a bank holding company stating any fact that is set out in the incorporating instrument, the by-laws, the minutes of the meetings of the directors, a committee of directors or the shareholders or members, or in a contract to which the bank or bank holding company is a party, may be signed by a director or an officer of the bank or bank holding company.

(2) Subsection 969(2) of the Act is amended by striking out “or” at the end of paragraph (b) and by adding the following after that paragraph:

(3) Paragraph 969(2)(c) of the English version of the Act is replaced by the following:

(c) a certified copy of, or an extract from, minutes of a meeting of shareholders, directors or a committee of directors of a bank or a bank holding company or of a meeting of members of a federal credit union.

2088. Section 970 of the Act is renumbered as subsection 970(1) and is amended by adding the following:

2089. (1) Subsection 973.01(1) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(2) Subsection 973.01(2) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

2090. (1) Subsection 973.2(6) of the Act is replaced by the following:

(6) Despite Part X of the Financial Administration Act, the Minister or an agent or agency of Her Majesty in right of Canada may, on any terms and conditions imposed under subsection (3), acquire and hold shares of a bank on behalf of or in trust for Her Majesty if, as a result of an order under subsection (1), the bank may record in its securities register or members register, as the case may be, the transfer or issue of shares to Her Majesty or an agent or agency of Her Majesty.

(2) Subsection 973.2(8) of the Act is replaced by the following:

(8) Shares acquired under subsection (6) by the Minister or an agent or agency of Her Majesty in right of Canada are to be registered in the name of the Minister, agent or agency, as the case may be, in the bank’s securities register or members register, as the case may be, if they are capable of being registered in it, and they are to be held by the Minister, agent or agency, as the case may be, on behalf of or in trust for Her Majesty.

(3) Subsection 973.2(15) of the Act is replaced by the following:

(15) For the purposes of this section, “shares” includes membership shares and any conversion or exchange privilege, option or right to acquire shares.

2091. Paragraph 976(1)(a) of the Act is replaced by the following:

(a) applications for approval under subsection 65(1), 72(2), 75(4), 79(5), 79.1(2), 80(1), 170(1), 192.03(6), 217(3), 421(1), 468(6) or (11), 471(1) or (2) or 482(1), subparagraph 487(2)(a)(vi), section 490 or subsection 494(3) or (4), 495.3(1), 553.1(1), 709(1), 716(2), 718(4), 723(1), 758(1), 924(1), 930(6) or (11), 933(1) or 944(1);

2092. Paragraph 978(1)(j) of the Act is replaced by the following:

(j) respecting the holding of shares, membership shares and ownership interests for the purposes of sections 70, 74 and 714;

2093. (1) Section 983 of the Act is amended by adding the following after subsection (2):

(2) Section 983 of the Act is amended by adding the following after subsection (4):

(3) Subsection 983(5.1) of the Act is replaced by the following:

(5.1) No person commits an offence under subsections (2) to (2.1) if the activity referred to in that subsection is in relation to a business that is not engaged in financial activities, unless the business is carried out by a prescribed entity.

(4) Subsection 983(5.3) of the Act is replaced by the following:

(5.3) Subject to the regulations, no entity affiliated with a bank commits an offence by reason only that the entity uses the name of the bank in the entity’s corporate name or in a name under which the entity carries on business or by reason only that it uses any identifying mark of the bank in carrying on its business, if the entity does not use any of the words “bank”, “banker” or “banking” or the phrase “federal credit union” in its corporate name, in a name under which it carries on business or in any of its identifying marks.

(5) Section 983 of the Act is amended by adding the following after subsection (13):