409. (1) Subject to this Act, a bank shall not engage in or carry on any business other than the business of banking and such business generally as appertains thereto.

(2) For greater certainty, the business of banking includes

(a) providing any financial service;

(b) acting as a financial agent;

(c) providing investment counselling services and portfolio management services; and

(d) issuing payment, credit or charge cards and, in cooperation with others including other financial institutions, operating a payment, credit or charge card plan.

410. (1) In addition, a bank may

(a) hold, manage and otherwise deal with real property;

(b) provide prescribed bank-related data processing services;

(c) outside Canada or, with the prior written approval of the Minister, in Canada, engage in any of the following activities, namely,

(i) collecting, manipulating and transmitting

(A) information that is primarily financial or economic in nature,

(B) information that relates to the business of a permitted entity, as defined in subsection 464(1), or

(C) any other information that the Minister may, by order, specify,

(ii) providing advisory or other services in the design, development or implementation of information management systems,

(iii) designing, developing or marketing computer software, and

(iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the bank is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services;

(c.1) with the prior written approval of the Minister, develop, design, hold, manage, manufacture, sell or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used

(i) to provide information that is primarily financial or economic in nature,

(ii) to provide information that relates to the business of a permitted entity, as defined in subsection 464(1), or

(iii) for a prescribed purpose or in prescribed circumstances;

(c.2) engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services;

(d) promote merchandise and services to the holders of any payment, credit or charge card issued by the bank;

(e) engage in the sale of

(i) tickets, including lottery tickets, on a non-profit public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest,

(ii) urban transit tickets, and

(iii) tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government or governments;

(f) act as a custodian of property; and

(g) act as receiver, liquidator or sequestrator.

(2) Except as authorized by or under this Act, a bank shall not deal in goods, wares or merchandise or engage in any trade or other business.

(3) The Governor in Council may make regulations

(a) respecting what a bank may or may not do with respect to the carrying on of the activities referred to in paragraphs (1)(c) to (c.2);

(b) imposing terms and conditions in respect of

(i) the provision of financial services referred to in paragraph 409(2)(a) that are financial planning services,

(ii) the provision of services referred to in paragraph 409(2)(c), and

(iii) the carrying on of the activities referred to in any of paragraphs (1)(c) to (c.2); and

(c) respecting the circumstances in which banks may be exempted from the requirement to obtain the approval of the Minister before carrying on a particular activity referred to in paragraph (1)(c) or (c.1).

1991, c. 46, s. 410; 1993, c. 34, s. 8(F); 1997, c. 15, s. 42; 2001, c. 9, s. 100.

411. (1) Subject to section 416, a bank may

(a) act as agent for any person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 464(1) or a prescribed entity and may enter into an arrangement with any person in respect of the provision of that service; or

(b) refer any person to any such financial institution or entity.

(2) The Governor in Council may make regulations respecting the disclosure of

(a) the name of the principal for whom a bank is acting as agent pursuant to subsection (1); and

(b) whether any commission is being earned by a bank when acting as agent pursuant to subsection (1).

1991, c. 46, s. 411; 2001, c. 9, s. 101.

412. No bank shall act in Canada as

(a) an executor, administrator or official guardian or a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person; or

(b) a trustee for a trust.

413. (1) A bank shall not accept deposits in Canada unless

(a) it is a member institution, as defined in section 2 of the Canada Deposit Insurance Corporation Act; or

(b) it has been authorized under subsection 26.03(1) of that Act to accept deposits without being a member institution, as defined in section 2 of that Act.

(2) [Repealed, 2001, c. 9, s. 102]

(3) A bank to which paragraph (1)(b) applies shall ensure that, on each day that is at least thirty days after the bank receives the authorization referred to in that paragraph,

A/B < 0.01

where

A is the sum of all amounts each of which is the sum of all the deposits held by the bank at the end of a day in the preceding thirty days each of which deposits is less than $150,000 and payable in Canada; and

B is the sum of all amounts each of which is the sum of all deposits held by the bank at the end of a day in those preceding thirty days and payable in Canada.

(4) For the purpose of subsection (3), the rate of exchange that shall be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada shall be determined in accordance with rules prescribed under subsection 26.03(2) of the Canada Deposit Insurance Corporation Act.

(5) For the purpose of subsection (3), “deposit” has the meaning that would be given to it by the schedule to the Canada Deposit Insurance Corporation Act for the purposes of deposit insurance if that schedule were read without reference to subsections 2(2), (5) and (6) of that schedule, but does not include prescribed deposits.

(6) The Governor in Council may make regulations

(a) prescribing the deposits referred to in subsection (5); and

(b) prescribing terms and conditions with respect to the acceptance of those deposits.

1991, c. 46, s. 413; 1997, c. 15, s. 43; 1999, c. 28, s. 21.1; 2001, c. 9, s. 102.

413.1 (1) Before a bank to which paragraph 413(1)(b) applies opens a deposit account in Canada, the bank shall give the person requesting the opening of the account, in the prescribed manner,

(a) a notice in writing that the deposit will not be insured by the Canada Deposit Insurance Corporation; and

(b) any other information that may be prescribed.

(2) A bank to which paragraph 413(1)(b) applies shall, in accordance with such regulations as may be made,

(a) post notices in its branches in Canada to inform the public that deposits with the bank are not insured by the Canada Deposit Insurance Corporation; and

(b) include in its advertisements notices to inform the public that deposits with the bank are not insured by the Canada Deposit Insurance Corporation.

(3) The Governor in Council may make regulations

(a) prescribing the manner in which notices referred to in subsection (1) are to be given and the additional information to be contained in the notices; and

(b) respecting notices for the purpose of subsection (2).

1997, c. 15, s. 43; 2001, c. 9, s. 103.

413.2 (1) Subject to the regulations, a bank to which paragraph 413(1)(b) applies may not, in respect of its business in Canada, act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

(2) In this section, “deposit” has the meaning assigned to that term by subsection 413(5).

(3) The Governor in Council may make regulations respecting the circumstances in which, and the conditions under which, a bank referred to in subsection (1) may act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

2001, c. 9, s. 104.

413.3 (1) Subject to the regulations, no bank to which paragraph 413(1)(b) applies shall carry on business in Canada on premises that are shared with those of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the bank.

(2) Subsection (1) only applies in respect of premises or any portion of premises on which both the bank and the member institution carry on business with the public and to which the public has access.

(3) Subject to the regulations, no bank to which paragraph 413(1)(b) applies shall carry on business in Canada on premises that are adjacent to a branch or office of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the bank, unless the bank clearly indicates to its customers that its business and the premises on which it is carried on are separate and distinct from the business and premises of the affiliated member institution.

(4) The Governor in Council may make regulations

(a) respecting the circumstances in which, and the conditions under which, a bank to which paragraph 413(1)(b) applies may carry on business in Canada on premises that are shared with those of a member institution referred to in subsection (1); and

(b) respecting the circumstances in which, and the conditions under which, a bank to which paragraph 413(1)(b) applies may carry on business in Canada on premises that are adjacent to a branch or office of a member institution referred to in subsection (3).

2001, c. 9, s. 104.

414. (1) A bank shall not guarantee on behalf of any person the payment or repayment of any sum of money unless

(a) the sum of money is a fixed sum of money with or without interest thereon; and

(b) the person on whose behalf the bank has undertaken to guarantee the payment or repayment has an unqualified obligation to reimburse the bank for the full amount of the payment or repayment to be guaranteed.

(2) Paragraph (1)(a) does not apply where the person on whose behalf the bank has undertaken to guarantee the payment or repayment is a subsidiary of the bank.

(3) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section.

1991, c. 46, s. 414; 1997, c. 15, s. 44; 2001, c. 9, s. 105.

415. A bank shall not deal in Canada in securities to the extent prohibited or restricted by such regulations as the Governor in Council may make for the purposes of this section.

416. (1) A bank shall not undertake the business of insurance except to the extent permitted by this Act or the regulations.

(2) A bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space in any branch in Canada of the bank to any person engaged in the placing of insurance.

(3) The Governor in Council may make regulations respecting the matters referred to in subsection (1) and regulations respecting relations between banks and

(a) entities that undertake the business of insurance; or

(b) insurance agents or insurance brokers.

(4) Nothing in this section precludes a bank from

(a) requiring insurance to be placed by a borrower for the security of the bank; or

(b) obtaining group insurance for its employees or the employees of any bodies corporate in which it has a substantial investment pursuant to section 468.

(5) [Repealed, 1997, c. 15, s. 45]

(6) For the purposes of this section, the business of insurance includes the issuance of any annuity where the liability thereon is contingent on the death of a person.

1991, c. 46, s. 416; 1997, c. 15, s. 45.

417. A bank shall not engage in Canada in any personal property leasing activity in which a financial leasing entity, as defined in subsection 464(1), is not permitted to engage.

1991, c. 46, s. 417; 2001, c. 9, s. 106.

418. (1) A bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 75 per cent of the value of the property at the time of the loan.

(2) Subsection (1) does not apply in respect of

(a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or pursuant to which a different limit on the value of property on the security of which the bank may make a loan is established;

(b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;

(c) the acquisition by the bank from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the bank to the entity against the issue of such securities; or

(d) a loan secured by a mortgage where

(i) the mortgage is taken back by the bank on a property disposed of by the bank, including where the disposition is by way of a realization of a security interest, and

(ii) the mortgage secures payment of an amount payable to the bank for the property.

1991, c. 46, s. 418; 1997, c. 15, s. 46.

419. (1) The directors of a bank shall establish and the bank shall adhere to policies regarding the creation of security interests in property of the bank to secure obligations of the bank and the acquisition by the bank of beneficial interests in property that is subject to security interests.

(2) The Superintendent may, by order, direct a bank to amend its policies as specified in the order.

(3) A bank shall comply with an order made under subsection (2) within the time specified in the order.

1991, c. 46, s. 419; 2001, c. 9, s. 107.

419.1 The Governor in Council may make regulations and the Superintendent may make guidelines respecting the creation by a bank of security interests in its property to secure obligations of the bank and the acquisition by the bank of beneficial interests in property that is subject to security interests.

2001, c. 9, s. 107.

419.2 Sections 419 and 419.1 do not apply in respect of a security interest created by a bank to secure an obligation of the bank to the Bank of Canada or the Canada Deposit Insurance Corporation.

2001, c. 9, s. 107.

420. A bank shall not grant to a person the right to appoint a receiver or a receiver and manager of the property or business of the bank.

421. (1) Except with the approval of the Superintendent, a bank may not be a general partner in a limited partnership or a partner in a general partnership.

(2) For the purposes of subsection (1), “general partnership” means any partnership other than a limited partnership.

1991, c. 46, s. 421; 2001, c. 9, s. 108.

422. (1) [Repealed, 2001, c. 9, s. 109]

(2) [Repealed, 1993, c. 44, s. 27]

422.1 In section 422.2, “non-WTO Member bank subsidiary” means a bank that is a subsidiary of a foreign bank and that is not controlled by a WTO Member resident.

1993, c. 44, s. 28; 1994, c. 47, s. 24; 1999, c. 28, s. 22; 2001, c. 9, s. 110.

422.2 No non-WTO Member bank subsidiary shall have any branch in Canada, other than its head office and one branch, without the approval of the Minister.

1993, c. 44, s. 28; 1999, c. 28, s. 22.

422.3 to 424. [Repealed, 1994, c. 47, s. 25]