Bank Act (S.C. 1991, c. 46)

Marginal note:French or English form of name

• 696 (1) The name of a bank holding company may be set out in its letters patent in an English form, a French form, an English form and a French form or in a combined English and French form, and the bank holding company may use and be legally designated by any such form.

• Marginal note:Mandatory abbreviation

  (2) Despite any other provision of this Act and subject to the regulations, every bank holding company shall have as part of its name, the abbreviations “bhc” or “spb”.

• Marginal note:Alternate name

  (3) A bank holding company may identify itself outside Canada by its name in any language and the bank holding company may use and be legally designated by any such form of its name outside Canada.

• Marginal note:Other name

  (4) Subject to subsection (5) and section 832, a bank holding company may carry on business under or identify itself by a name other than its corporate name.

• Marginal note:Directions

  (5) Where a bank holding company is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, by order, direct the bank holding company not to use that other name if the Superintendent is of the opinion that that other name is a name referred to in any of paragraphs 693(a) to (e).

• Marginal note:Regulations

  (6) The Governor in Council may make regulations respecting the use of the abbreviations “bhc” or “spb” in the name of bank holding companies.

Marginal note:Reserved name

697 The Superintendent may, on request, reserve for ninety days a name for a proposed bank holding company or for a bank holding company that intends to change its name.

Marginal note:Directing change of name

• 698 (1) If through inadvertence or otherwise a bank holding company

  • (a) comes into existence or is continued with a name, or

  • (b) on an application to change its name, is granted a name

  that is prohibited by section 693 or 695, the Superintendent may, by order, direct the bank holding company to change its name and the bank holding company shall comply with that direction.

• Marginal note:Revoking name

  (2) Where a bank holding company has been directed under subsection (1) to change its name and has not, within sixty days after the service of the direction, changed its name to a name that is not prohibited by this Part, the Superintendent may revoke the name of the bank holding company and assign to it a name and, until changed in accordance with section 215 or 217, the name of the bank holding company is thereafter the name so assigned.

Publication of Information

Marginal note:Publication of information

699 The Superintendent shall, within sixty days after the end of each year, cause a notice to be published in the Canada Gazette, showing

• (a) the name of every bank holding company; and

• (b) the province in which the head office of the bank holding company is situated.

DIVISION 4Organization and Commencement

Marginal note:First directors’ meeting

• 700 (1) After letters patent incorporating a bank holding company are issued, a meeting of the directors of the bank holding company shall be held at which the directors may, subject to this Division,

  • (a) make by-laws;

  • (b) adopt forms of share certificates and corporate records;

  • (c) authorize the issue of shares of the bank holding company;

  • (d) appoint officers;

  • (e) appoint an auditor to hold office until the first meeting of shareholders;

  • (f) make banking arrangements; and

  • (g) deal with any other matters necessary to organize the bank holding company.

• Marginal note:Calling directors’ meeting

  (2) An incorporator or a director named in the application for letters patent may call the meeting referred to in subsection (1) by giving, subject to subsection 770(2), no fewer than five days notice of the purpose, time and place of the meeting to each director of the bank holding company.

Marginal note:Calling shareholders’ meeting

• 701 (1) After the meeting referred to in subsection 700(1) is held, the directors of the bank holding company shall without delay call a meeting of the shareholders of the bank holding company.

• Marginal note:Meeting of shareholders

  (2) The shareholders of a bank holding company shall, by resolution at the meeting of shareholders called pursuant to subsection (1),

  • (a) approve, amend or reject any by-law made by the directors of the bank holding company;

  • (b) subject to section 756, elect directors to hold office for a term expiring not later than the close of the third annual meeting of shareholders following the election; and

  • (c) appoint an auditor to hold office until the close of the first annual meeting of shareholders.

Marginal note:Term of first directors

702 A director named in the application for letters patent to incorporate a bank holding company holds office until the election of directors at the meeting of shareholders called pursuant to subsection 701(1).

DIVISION 5Capital Structure

Share Capital

Marginal note:Power to issue shares

• 703 (1) Subject to this Part and the by-laws of the bank holding company, shares of a bank holding company may be issued at such times and to such persons and for such consideration as the directors of the bank holding company may determine.

• Marginal note:Shares

  (2) Shares of a bank holding company shall be in registered form and shall be without nominal or par value.

• Marginal note:Shares of continued bank holding company

  (3) Where a body corporate is continued as a bank holding company under this Part, shares with nominal or par value issued by the body corporate before it was so continued are deemed to be shares without nominal or par value.

• Marginal note:Deemed share conditions

  (4) If a right of a holder of a share with nominal or par value of a body corporate continued as a bank holding company under this Part, other than a voting right, was stated or expressed in terms of the nominal or par value of the share immediately before the body corporate was continued under this Part, that right is deemed, after the continuance, to be the same right stated or expressed without reference to the nominal or par value of the share.

Marginal note:Common shares

• 704 (1) A bank holding company shall have one class of shares, to be designated as “common shares”, which are non-redeemable and in which the rights of the holders thereof are equal in all respects, and those rights include

  • (a) the right to vote at all meetings of shareholders except where only holders of a specified class of shares are entitled to vote;

  • (b) the right to receive dividends declared on those shares; and

  • (c) the right to receive the remaining property of the bank holding company on dissolution.

• Marginal note:Designations of shares

  (2) No bank holding company shall designate more than one class of its shares as “common shares” or any variation of that term.

• Marginal note:Continued bank holding company

  (3) A body corporate continued as a bank holding company under this Part that is not in compliance with subsection (2) on the date letters patent continuing it as a bank holding company are issued shall, within twelve months after that date, redesignate its shares to comply with that subsection.

Marginal note:Classes of shares

• 705 (1) The by-laws of a bank holding company may provide for more than one class of shares and, if they so provide, shall set out

  • (a) the rights, privileges, restrictions and conditions attaching to the shares of each class; and

  • (b) the maximum number, if any, of shares of any class that the bank holding company is authorized to issue.

• Marginal note:Shareholder approval

  (2) Where a by-law referred to in subsection (1) is made, the directors of the bank holding company shall submit the by-law to the shareholders at the next meeting of shareholders.

• Marginal note:Effective date

  (3) A by-law referred to in subsection (1) is not effective until it is confirmed or confirmed with amendments by special resolution of the shareholders at the meeting referred to in subsection (2).

Marginal note:Shares issued in series

• 706 (1) The by-laws of a bank holding company may, subject to any limitations set out in them, authorize the issue of any class of shares in one or more series and may

  • (a) fix the maximum number of shares in each series and determine the designation, rights, privileges, restrictions and conditions attaching to them; and

  • (b) authorize the directors to do anything referred to in paragraph (a).

• Marginal note:Series participation

  (2) If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

• Marginal note:Voting rights

  (3) Where voting rights are attached to any series of a class of shares, the shares of every other series of that class shall have the same voting rights.

• Marginal note:Restriction on series

  (4) No rights, privileges, restrictions or conditions attached to a series of shares authorized under this section confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding.

• Marginal note:Material to Superintendent

  (5) If the directors exercise their authority under paragraph (1)(b), the directors shall, before the issue of shares of the series, send to the Superintendent particulars of the series of shares and a copy of the by-law that granted the authority to the directors.

Marginal note:One share, one vote

707 Where voting rights are attached to a share of a bank holding company, the voting rights may confer only one vote in respect of that share.

Marginal note:Shares non-assessable

708 Shares issued by a bank holding company are non-assessable and the shareholders are not liable to the bank holding company or to its creditors in respect thereof.

Marginal note:Consideration for share

• 709 (1) No share of any class of shares of a bank holding company shall be issued until it is fully paid for in money or, with the approval of the Superintendent, in property.

• Marginal note:Other currencies

  (2) When issuing shares, a bank holding company may provide that any aspect of the shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada.

Marginal note:Stated capital account

• 710 (1) A bank holding company shall maintain a separate stated capital account for each class and series of shares it issues.

• Marginal note:Addition to stated capital account

  (2) A bank holding company shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.

• Marginal note:Exception

  (3) Despite subsection (2), a bank holding company may, subject to subsection (4), record in the stated capital account maintained for the shares of a class or series any part of the consideration it receives in an exchange if it issues shares

  • (a) in exchange for

    • (i) property of a person who immediately before the exchange did not deal with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act,

    • (ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act, or

    • (iii) property of a person who immediately before the exchange dealt with the bank holding company at arm’s length within the meaning of that expression in the Income Tax Act if the person, the bank holding company and all of the holders of shares in the class or series of shares so issued consent to the exchange;

  • (b) under an agreement referred to in subsection 804(1); or

  • (c) to shareholders of an amalgamating body corporate who receive the shares in addition to or instead of securities of the amalgamated bank holding company.

• Marginal note:Limit on addition to a stated capital account

  (4) On the issuance of a share, a bank holding company shall not add to the stated capital account in respect of the share an amount greater than the amount of the consideration it receives for the share.

• Marginal note:Constraint on addition to a stated capital account

  (5) Where a bank holding company that has issued any outstanding shares of more than one class or series proposes to add to a stated capital account that it maintains in respect of a class or series of shares an amount that was not received by the bank holding company as consideration for the issue of shares, the addition must be approved by special resolution unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 720(4).

Marginal note:Stated capital of continued bank holding company

• 711 (1) Where a body corporate is continued as a bank holding company under this Part, the bank holding company shall record in the stated capital account maintained for each class and series of shares then outstanding an amount that is equal to the aggregate of

  • (a) the aggregate amount paid up on the shares of each class and series of shares immediately before the body corporate was so continued, and

  • (b) the amount of the contributed surplus of the bank holding company that is attributable to those shares.

• Marginal note:Contributed surplus entry

  (2) The amount of any contributed surplus recorded in the stated capital account pursuant to paragraph (1)(b) shall be deducted from the contributed surplus account of the bank holding company.

• Marginal note:Shares issued before continuance

  (3) Any amount unpaid in respect of a share issued by a body corporate before it was continued as a bank holding company under this Part and paid after it was so continued shall be recorded in the stated capital account maintained by the bank holding company for the shares of that class or series.