507. (1) The following definitions apply in this Part.

“designated foreign bank” means a foreign bank that is the subject of a designation order.

“designation order” means an order made under subsection 508(1).

“exemption order” means an order made under subsection 509(1).

“finance entity” means a Canadian entity that is a finance entity as defined in the regulations.

“financial leasing entity” means a Canadian entity that is a financial leasing entity as defined in subsection 464(1).

“financial services entity” means an entity, other than an entity referred to in any of paragraphs 468(1)(a) to (i) or a leasing entity, that engages in activities at least the prescribed portion — or if no portion is prescribed, 10 per cent — of which, determined in the prescribed manner, consists of one or more of the following activities:

(a) providing any financial service;

(b) acting as a financial agent;

(c) providing investment counselling and portfolio management services;

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

(e) engaging in the activities referred to in the definition “mutual fund entity” or “mutual fund distribution entity” in subsection 464(1);

(f) engaging in prescribed activities, under prescribed terms and conditions, if any are prescribed;

(g) engaging in any activity referred to in paragraphs (a) to (f) as an agent for another entity referred to in any of those paragraphs or in any of paragraphs 468(1)(a) to (j); or

(h) acquiring or holding control of, or becoming a major owner of, an entity referred to in any of paragraphs (a) to (g) or any of paragraphs 468(1)(a) to (j).

“foreign cooperative credit society” means an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province, and that, outside Canada, engages in or carries on the business of a cooperative credit society.

“foreign insurance company” means a foreign company as defined in subsection 2(1) of the Insurance Companies Act.

“foreign securities dealer” means an entity that is incorporated or formed, and regulated, otherwise than by or under an Act of Parliament or of the legislature of a province, and that, outside Canada, engages in or carries on the business of dealing in securities.

“leasing activities” means

(a) the financial leasing of personal property and the related activities that a financial leasing entity may engage in; and

(b) all other leasing of personal property.

“leasing entity” means an entity that engages in only

(a) leasing activities; or

(b) leasing activities and activities other than those described in paragraphs (a) to (h) of the definition “financial services entity”.

“limited commercial entity” means a Canadian entity that a foreign bank or an entity associated with a foreign bank may control in accordance with section 522.09, or in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment in accordance with that section.

“non-bank affiliate of a foreign bank” means a Canadian entity, other than a bank,

(a) in which a foreign bank or an entity associated with a foreign bank holds a substantial investment, or

(b) that is controlled by a foreign bank or an entity associated with a foreign bank,

but a Canadian entity is not a non-bank affiliate of a foreign bank by reason only that a bank that is a subsidiary of the foreign bank or of the entity associated with a foreign bank controls, or holds a substantial investment in, the Canadian entity.

“permitted Canadian entity” means a Canadian entity that a foreign bank or an entity associated with a foreign bank may control in accordance with section 522.08, or in which a foreign bank or an entity associated with a foreign bank is permitted to acquire a substantial investment in accordance with that section.

“representative office” means an office established to represent a foreign bank in Canada that is not subject to the direction of, or management by, an entity incorporated or formed by or under an Act of Parliament or of the legislature of a province, and the personnel of which are employed directly or indirectly by the foreign bank.

“specialized financing entity” means a Canadian entity that is a specialized financing entity as defined in the regulations.

(2) For the purposes of this Part,

(a) an entity is associated with a foreign bank if

(i) the entity controls, or is controlled by, the foreign bank, or

(ii) the entity and the foreign bank are controlled by the same person;

(b) an entity may be associated with more than one foreign bank; and

(c) a foreign bank may be associated with another foreign bank.

(3) For the purposes of this Part, the Minister may deem an entity to be associated with a foreign bank if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written,

(a) the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the entity, with one or more other persons such that, if they were one person, they would control the entity;

(b) the entity is acting, jointly or in concert, in relation to the shares or ownership interests of the foreign bank, with one or more other persons such that, if they were one person, they would control the foreign bank;

(c) another entity that is associated with the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the entity, with one or more other persons such that, if they were one person, they would control the entity;

(d) a person who controls the entity is acting, jointly or in concert, in relation to the shares or ownership interests of the foreign bank, with one or more other persons, such that, if they were one person, they would control the foreign bank;

(e) a person who controls the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the entity, with one or more other persons, such that, if they were one person, they would control the entity; or

(f) two or more persons are acting, jointly or in concert, in relation to the shares or ownership interests of the entity and the foreign bank such that, if they were one person, they would control the entity and the foreign bank.

(4) For the purposes of this Part, a foreign bank is deemed to hold a substantial investment in a Canadian entity if

(a) the foreign bank and one or more entities associated with the foreign bank, or

(b) two or more entities associated with the foreign bank

would, if they were one person, hold a substantial investment in the Canadian entity.

(5) For the purposes of this Part, an entity associated with a foreign bank is deemed to hold a substantial investment in a Canadian entity if

(a) the entity and the foreign bank, or

(b) the entity and one or more other entities associated with the foreign bank

would, if they were one person, hold a substantial investment in the Canadian entity.

(6) For the purposes of this Part, a foreign bank is deemed to control a Canadian entity if

(a) the foreign bank and one or more entities associated with the foreign bank, or

(b) two or more entities associated with the foreign bank

would, if they were one person, control the Canadian entity.

(7) For the purposes of this Part, an entity associated with a foreign bank is deemed to control a Canadian entity if

(a) the entity and the foreign bank, or

(b) the entity and one or more other entities associated with the foreign bank

would, if they were one person, control the Canadian entity.

(8) For the purposes of this Part, a person, other than a foreign bank or an entity associated with a foreign bank,

(a) is a major owner of an unincorporated Canadian entity if the aggregate of any ownership interests, however designated, into which the unincorporated Canadian entity is divided that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 35 per cent of all of the ownership interests into which the unincorporated Canadian entity is divided; and

(b) is a major owner of a Canadian entity that is a body corporate if

(i) the aggregate of the shares of any class of voting shares of the Canadian entity that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 20 per cent of the outstanding shares of that class of voting shares of the Canadian entity, or

(ii) the aggregate of the shares of any class of non-voting shares of the Canadian entity that are beneficially owned by the person and that are beneficially owned by any entities controlled by the person is more than 30 per cent of the outstanding shares of that class of non-voting shares of the Canadian entity.

(9) For the purposes of this Part, a foreign bank

(a) is a major owner of an unincorporated Canadian entity if the aggregate of any ownership interests, however designated, into which the unincorporated Canadian entity is divided that are beneficially owned by the foreign bank and that are beneficially owned by any entities associated with the foreign bank is more than 35 per cent of all of the ownership interests into which the unincorporated Canadian entity is divided; and

(b) is a major owner of a Canadian entity that is a body corporate if

(i) the aggregate of the shares of any class of voting shares of the Canadian entity that are beneficially owned by the foreign bank and that are beneficially owned by any entities associated with the foreign bank is more than 20 per cent of the outstanding shares of that class of voting shares of the Canadian entity, or

(ii) the aggregate of the shares of any class of non-voting shares of the Canadian entity that are beneficially owned by the foreign bank and that are beneficially owned by any entities associated with the foreign bank is more than 30 per cent of the outstanding shares of that class of non-voting shares of the Canadian entity.

(10) For the purposes of this Part, an entity associated with a foreign bank

(a) is a major owner of an unincorporated Canadian entity if the aggregate of any ownership interests, however designated, into which the unincorporated Canadian entity is divided that are beneficially owned by the entity associated with the foreign bank, that are beneficially owned by the foreign bank and that are beneficially owned by any other entities associated with the foreign bank is more than 35 per cent of all of the ownership interests into which the unincorporated Canadian entity is divided; and

(b) is a major owner of a Canadian entity that is a body corporate if

(i) the aggregate of the shares of any class of voting shares of the Canadian entity that are beneficially owned by the entity associated with the foreign bank, that are beneficially owned by the foreign bank and that are beneficially owned by any other entities associated with the foreign bank is more than 20 per cent of the outstanding shares of that class of voting shares of the Canadian entity, or

(ii) the aggregate of the shares of any class of non-voting shares of the Canadian entity that are beneficially owned by the entity associated with the foreign bank, that are beneficially owned by the foreign bank and that are beneficially owned by any other entities associated with the foreign bank is more than 30 per cent of the outstanding shares of that class of non-voting shares of the Canadian entity.

(11) For the purposes of this Part, the Minister may deem a person to be a major owner of a Canadian entity if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written, the person is acting, jointly or in concert, in relation to the shares or ownership interests of the Canadian entity, with one or more other persons such that, if they were one person, they would be a major owner of the Canadian entity.

(12) For the purposes of this Part, the Minister may deem a foreign bank to be a major owner of a Canadian entity if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written,

(a) the foreign bank is acting, jointly or in concert, in relation to the shares or ownership interests of the Canadian entity, with one or more other persons such that, if they were one person, they would be a major owner of the Canadian entity; or

(b) two or more persons are acting, jointly or in concert in relation to the shares or ownership interests of the Canadian entity and in relation to the shares or ownership interests of the foreign bank such that, if they were one person, they would control the foreign bank and be a major owner of the Canadian entity.

(13) For the purposes of this Part, the Minister may deem an entity associated with a foreign bank to be a major owner of a Canadian entity if, in the opinion of the Minister, it is reasonable to conclude that under any agreement, commitment or understanding, whether formal or informal, verbal or written, the entity associated with the foreign bank is acting, jointly or in concert, in relation to the shares and ownership interests of the Canadian entity with one or more other persons, such that, if they were one person, they would be a major owner of the Canadian entity.

(14) For the purposes of this Part, a member of a foreign bank’s group is any of the following:

(a) an entity associated with the foreign bank;

(b) an entity in which the foreign bank or an entity associated with the foreign bank holds a substantial investment; and

(c) a prescribed entity, in relation to the foreign bank.

(15) For the purposes of this Part, a foreign bank has, or is deemed to have, a financial establishment in Canada if the foreign bank or any entity associated with the foreign bank

(a) is an authorized foreign bank;

(b) is a foreign insurance company;

(c) is a foreign securities dealer, or a foreign cooperative credit society, that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or to carry on the business of dealing in securities or the business of a cooperative credit society; or

(d) controls, or is a major owner of,

(i) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i), or

(ii) a Canadian entity that is a financial services entity.

(16) For the purposes of this Part, an entity associated with a foreign bank has, or is deemed to have, a financial establishment in Canada if the entity, the foreign bank or any other entity associated with the foreign bank

(a) is an authorized foreign bank;

(b) is a foreign insurance company;

(c) is a foreign securities dealer, or a foreign cooperative credit society, that has received the approval of the Minister under paragraph 522.22(1)(f) to engage in or to carry on the business of dealing in securities or the business of a cooperative credit society; or

(d) controls, or is a major owner of,

(i) a Canadian entity referred to in any of paragraphs 468(1)(a) to (i), or

(ii) a Canadian entity that is a financial services entity.

(17) The Governor in Council may make regulations

(a) respecting the exemption, from the application of any provision of this Act, of any class or classes of entities associated with a foreign bank from the status of being associated with a foreign bank; and

(b) authorizing the Minister, by order, and subject to any terms and conditions that the Minister considers appropriate, to deem, for the purposes of any provision of this Act, any entity not to be an entity associated with a foreign bank.

(18) The Minister may, by further order, revoke or vary any order referred to in paragraph (17)(b) and any such revocation or variation comes into effect three months after the date the further order is made unless the Minister and the entity to which the order relates agree that the revocation or variation is to take effect at some other time agreed to by them.

(19) If the Minister makes an order referred to in paragraph (17)(b) or subsection (18), the Minister shall publish in the Canada Gazette a notice of the making of the order.

1991, c. 46, s. 507; 1997, c. 15, s. 76; 1999, c. 28, s. 27; 2001, c. 9, s. 132.

508. (1) Subject to subsection (2), the Minister may, by order, designate a foreign bank to be a designated foreign bank for the purposes of this Part if

(a) the foreign bank is a bank according to the laws of the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business;

(b) the foreign bank engages, directly or indirectly, in the business of providing financial services and employs, to identify or describe its business, a name that includes the word “bank”, “banque”, “banking” or “bancaire”, either alone or in combination with other words, or any word or words in any language other than English or French corresponding generally thereto;

(c) the foreign bank, in the opinion of the Minister, after consultation with the Superintendent, is regulated as or like a bank, according to the jurisdiction under whose laws it was incorporated or in any jurisdiction in which it carries on business; or

(d) the foreign bank is not a foreign bank described in any of paragraphs (a) to (c) and one of the following conditions is met:

(i) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total assets of foreign banks described in any of paragraphs (a) to (c) that are associated with the foreign bank to the value of the total assets of the foreign bank and entities associated with the foreign bank, or

(ii) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total revenues of foreign banks described in any of paragraphs (a) to (c) that are associated with the foreign bank to the value of the total revenues of the foreign bank and entities associated with the foreign bank.

(2) The Minister may only make an order under subsection (1) in respect of a foreign bank described in any of paragraphs (1)(a) to (c) if

(a) the foreign bank or an entity controlled by the foreign bank is or will be

(i) engaging in or carrying on business in Canada, other than holding, managing or otherwise dealing with real property,

(ii) maintaining a branch in Canada, other than an office referred to in section 522,

(iii) establishing, maintaining or acquiring for use in Canada an automated banking machine, a remote service unit or a similar automated service, or, in Canada, accepting data from such a machine, unit or service other than in circumstances described in section 511 or 512,

(iv) acquiring or holding control of, or a substantial investment in, a Canadian entity, or

(v) acquiring or holding any share or ownership interest in a Canadian entity and

(A) an entity associated with the foreign bank holds control of, or a substantial investment in, the Canadian entity, or

(B) an entity associated with the foreign bank and one or more other entities associated with the foreign bank would, if they were one person, hold control of, or a substantial investment in, the Canadian entity; or

(b) the foreign bank is controlled by an individual and

(i) one of the following conditions is met:

(A) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total assets of the foreign bank and other foreign banks described in any of paragraphs (1)(a) to (c) that are associated with the foreign bank to the value of the total assets of the foreign bank and entities associated with the foreign bank, or

(B) subject to the regulations, the following ratio, expressed as a percentage, is equal to or greater than the prescribed material percentage: the value of the total revenues of the foreign bank and other foreign banks described in any of paragraphs (1)(a) to (c) that are associated with the foreign bank to the value of the total revenues of the foreign bank and entities associated with the foreign bank, and

(ii) an entity associated with the foreign bank is or will be

(A) engaging in or carrying on business in Canada, other than holding, managing or otherwise dealing with real property,

(B) maintaining a branch in Canada, other than an office referred to in section 522,

(C) establishing, maintaining or acquiring for use in Canada an automated banking machine, a remote service unit or a similar automated service, or, in Canada, accepting data from such a machine, unit or service other than in circumstances described in section 511 or 512, or

(D) acquiring or holding control of, or a substantial investment in, a Canadian entity.

(2.1) Subsections 507(4) to (7) do not apply with respect to the making of any determination relating to control or a substantial investment for the purposes of paragraph (2)(a).

(3) A foreign bank that was designated under subsection 521(1.06) as that subsection read immediately before the coming into force of this subsection and whose designation has not been revoked is deemed to be the subject of a designation order.

1991, c. 46, s. 508, c. 47, s. 756; 1993, c. 44, s. 29; 1994, c. 47, s. 26; 1999, c. 28, s. 28; 2001, c. 9, s. 132.

509. (1) The Minister may, by order, determine that this Part, other than this section, sections 507 and 508, subsection 522.25(3), sections 522.26 and 522.28, subsection 522.29(2) and section 522.3, does not apply to a foreign bank.

(2) No order may be made under subsection (1) in respect of a designated foreign bank or a foreign bank that is associated with a designated foreign bank.

(3) An exemption order is deemed to have been made on the coming into force of this subsection in respect of a foreign bank if, immediately before the coming into force of this subsection, the foreign bank had received consent under subsection 521(1), the consent had not been revoked and the foreign bank or an entity associated with it was not designated under subsection 521(1.06), as those subsections read immediately before the coming into force of this subsection.

(4) A foreign bank that is the subject of an exemption order shall advise the Minister in writing of any change in circumstances that may affect its eligibility for a designation order.

(5) An exemption order in respect of a foreign bank is deemed to be revoked if the foreign bank, or another foreign bank that is an entity associated with the foreign bank, is a designated foreign bank. The Minister may revoke an exemption order in respect of a foreign bank if the conditions for designation set out in section 508 are met by the foreign bank or by another foreign bank that is an entity associated with the foreign bank.

(6) This Part, other than this section, sections 507 and 508, subsection 522.25(3), sections 522.26 and 522.28, subsection 522.29(2) and section 522.3, does not apply to an entity associated with a foreign bank that is the subject of an exemption order.

(7) If an exemption order in respect of a foreign bank is revoked or deemed to be revoked under subsection (5), the Minister may, by order, authorize the foreign bank and any entity associated with it to continue to hold control of, or a substantial investment in, a Canadian entity that the foreign bank or the entity associated with the foreign bank would not otherwise be allowed to continue to hold under Division 3 or 4 or to continue to engage in any activities or to engage in or carry on any business or to maintain a branch that the foreign bank or the entity associated with the foreign bank would not otherwise be allowed to continue to engage in or carry on or maintain under Division 3 or 4.

1991, c. 46, s. 509; 2001, c. 9, s. 132.

509.1 Subsection 510(1) does not apply to

(a) an entity referred to in any of paragraphs 468(1)(a) to (f) that is an entity associated with a foreign bank; or

(b) a Canadian entity that an entity referred to in paragraph (a) controls, or in which such an entity has a substantial investment.

2001, c. 9, s. 132.