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Bank Act (S.C. 1991, c. 46)

Full Document:  

Act current to 2024-05-01 and last amended on 2024-03-30. Previous Versions

PART VICorporate Governance (continued)

Financial Statements and Auditors (continued)

Annual Financial Statement (continued)

Marginal note:Annual statement — approval

  •  (1) The directors of a bank shall approve the annual statement and their approval shall be evidenced by the signature or a printed or otherwise mechanically reproduced facsimile of the signature of

    • (a) the chief executive officer or, in the event of that officer’s absence or inability to act, any other officer of the bank authorized by the directors to sign in the stead of the chief executive officer; and

    • (b) one director, if the signature required by paragraph (a) is that of a director, or two directors if the signature required by that paragraph is that of an officer who is not a director.

  • Marginal note:Condition precedent to publication

    (2) A bank shall not publish copies of an annual statement unless it is approved and signed in accordance with subsection (1).

  • 1991, c. 46, s. 309
  • 2005, c. 54, s. 70

Marginal note:Statements — subsidiaries

  •  (1) A bank shall keep at its head office a copy of the current financial statements of each subsidiary of the bank.

  • Marginal note:Examination

    (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.

  • Marginal note:Barring examination

    (3) A bank may refuse to permit an examination under subsection (2) by any person.

  • Marginal note:Application for order

    (4) Within fifteen days after a refusal under subsection (3), the bank shall apply to a court for an order barring the right of the person concerned to make an examination under subsection (2) and the court shall either order the bank to permit the examination or, if it is satisfied that the examination would be detrimental to the bank or to any other body corporate the financial statements of which would be subject to examination, bar the right and make any further order it thinks fit.

  • Marginal note:Notice to Superintendent

    (5) A bank shall give the Superintendent and the person seeking to examine the statements referred to in subsection (1) notice of an application to a court under subsection (4), and the Superintendent and the person may appear and be heard in person or by counsel at the hearing of the application.

  • 1991, c. 46, s. 310
  • 2010, c. 12, s. 2019

Marginal note:Distribution of annual statement

  •  (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, 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.

  • Marginal note:Exception

    (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.

  • Marginal note:Effect of default

    (3) Where a bank is required to comply with subsection (1) and the bank does not comply with that subsection, the annual meeting at which the documents referred to in that subsection are to be considered shall be adjourned until that subsection has been complied with.

  • 1991, c. 46, s. 311
  • 1997, c. 15, s. 34
  • 2005, c. 54, s. 71
  • 2010, c. 12, ss. 2020, 2135

Marginal note:Copy to Superintendent

  •  (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.

  • Marginal note:Later filing

    (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.

  • 1991, c. 46, s. 312
  • 1997, c. 15, s. 35
  • 2001, c. 9, s. 93
  • 2010, c. 12, s. 2021

Auditors

Marginal note:Definitions

 For the purposes of this section and sections 314 to 333,

firm of accountants

firm of accountants means a partnership, the members of which are accountants engaged in the practice of accounting, or a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (cabinet de comptables)

member

member, in relation to a firm of accountants, means

  • (a) an accountant who is a partner in a partnership, the members of which are accountants engaged in the practice of accounting, or

  • (b) an accountant who is an employee of a firm of accountants. (membre)

Marginal note:Appointment of auditors

  •  (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.

  • Marginal note:Auditors

    (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.

  • Marginal note:Remuneration of auditors

    (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.

  • 1991, c. 46, s. 314
  • 2010, c. 12, s. 2022

Marginal note:Qualification of auditors

  •  (1) A firm of accountants is qualified to be an auditor of a bank if

    • (a) two or more members thereof are accountants who

      • (i) are members in good standing of an institute or association of accountants incorporated by or under an Act of the legislature of a province,

      • (ii) each have at least five years experience at a senior level in performing audits of a financial institution,

      • (iii) are ordinarily resident in Canada, and

      • (iv) are independent of the bank; and

    • (b) the member of the firm jointly designated by the firm and the bank to conduct the audit of the bank on behalf of the firm is qualified in accordance with paragraph (a).

  • Marginal note:Independence

    (2) For the purposes of subsection (1),

    • (a) independence is a question of fact; and

    • (b) a member of a firm of accountants is deemed not to be independent of a bank if that member, a business partner of that member or the firm of accountants

      • (i) is a business partner, director, officer or employee of the bank or of any affiliate of the bank or is a business partner of any director, officer or employee of the bank or of any affiliate of the bank,

      • (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

      • (iii) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of any affiliate of the bank within the two years immediately preceding the firm’s proposed appointment as auditor of the bank, other than an affiliate that is a subsidiary of the bank acquired pursuant to section 472 or through a realization of security pursuant to section 473.

  • Marginal note:Business partners

    (2.1) For the purposes of subsection (2), a business partner of a member of a firm of accountants includes

    • (a) another member of the firm; and

    • (b) a shareholder of the firm or of a business partner of the member.

  • Marginal note:Notice of designation

    (3) Within fifteen days after appointing a firm of accountants as auditor of a bank, the bank and the firm of accountants shall jointly designate a member of the firm who has the qualifications described in subsection (1) to conduct the audit of the bank on behalf of the firm and the bank shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:New designation

    (4) Where for any reason a member of a firm of accountants designated pursuant to subsection (3) ceases to conduct the audit of the bank, the bank and the firm of accountants may jointly designate another member of the same firm of accountants who has the qualifications described in subsection (1) to conduct the audit of the bank and the bank shall forthwith notify the Superintendent in writing of the designation.

  • Marginal note:Deemed vacancy

    (5) In any case where subsection (4) applies and a designation is not made pursuant to that subsection within thirty days after the designated member ceases to conduct the audit of the bank, there shall be deemed to be a vacancy in the office of auditor of the bank.

  • 1991, c. 46, s. 315
  • 2001, c. 9, s. 94
  • 2005, c. 54, s. 72
  • 2010, c. 12, s. 2023

Marginal note:Duty to resign

  •  (1) An auditor that ceases to be qualified under section 315 shall resign forthwith after any member of the firm becomes aware that the firm has ceased to be so qualified.

  • Marginal note:Disqualification order

    (2) Any interested person may apply to a court for an order declaring that an auditor of a bank has ceased to be qualified under section 315 and declaring the office of auditor to be vacant.

Marginal note:Revocation of appointment

  •  (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.

  • Marginal note:Idem

    (2) The Superintendent may at any time revoke the appointment of an auditor made under subsection (3) or 314(1) or section 319 by notice in writing signed by the Superintendent and sent by registered mail to the auditor and to the bank addressed to the usual place of business of the auditor and the bank.

  • Marginal note:Filling vacancy

    (3) A vacancy created by the revocation of the appointment of an auditor under subsection (1) may be filled at the meeting at which the appointment was revoked and, if not so filled, shall be filled by the directors under section 319.

  • 1991, c. 46, s. 317
  • 2010, c. 12, s. 2024

Marginal note:Ceasing to hold office

  •  (1) An auditor of a bank ceases to hold office when

    • (a) the auditor resigns; or

    • (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.

  • Marginal note:Effective date of resignation

    (2) The resignation of an auditor becomes effective at the time a written resignation is sent to the bank or at the time specified in the resignation, whichever is later.

  • 1991, c. 46, s. 318
  • 2010, c. 12, s. 2025

Marginal note:Filling vacancy

  •  (1) Subject to subsection 317(3), where a vacancy occurs in the office of auditor of a bank, the directors shall forthwith fill the vacancy, and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.

  • Marginal note:Where Superintendent may fill vacancy

    (2) Where the directors fail to fill a vacancy in accordance with subsection (1), the Superintendent may fill the vacancy and the auditor so appointed holds office for the unexpired term of office of the predecessor of that auditor.

  • Marginal note:Designation of member of firm

    (3) Where the Superintendent has, pursuant to subsection (2), appointed a firm of accountants to fill a vacancy, the Superintendent shall designate the member of the firm who is to conduct the audit of the bank on behalf of the firm.

Marginal note:Right to attend meetings

  •  (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.

  • Marginal note:Duty to attend meeting

    (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.

  • Marginal note:Notice to bank

    (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.

  • Marginal note:Superintendent may attend

    (4) The Superintendent may attend and be heard at any meeting referred to in subsection (2).

  • 1991, c. 46, s. 320
  • 2010, c. 12, s. 2026

Marginal note:Statement of auditor

  •  (1) An auditor of a bank that

    • (a) resigns,

    • (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,

    shall submit to the bank and the Superintendent a written statement giving the reasons for the resignation or the reasons why the auditor opposes any proposed action.

  • Marginal note:Other statements

    (1.1) In the case of a proposed replacement of an auditor whether because of removal or the expiry of their term, the bank shall make a statement of the reasons for the proposed replacement and the proposed replacement auditor may make a statement in which they comment on those reasons.

  • Marginal note:Statements to be sent

    (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.

  • 1991, c. 46, s. 321
  • 2005, c. 54, s. 73
  • 2010, c. 12, s. 2027
 

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