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.

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

(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.

(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.

2001, c. 9, s. 183.

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.

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

(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.

2001, c. 9, s. 183.

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.

(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.

(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).

2001, c. 9, s. 183.

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).

(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.

(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.

(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.

(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 a copy of the by-law authorizing the directors to fix the rights, privileges, restrictions and conditions of those shares and shall provide the Superintendent with particulars of the proposed series of shares.

2001, c. 9, s. 183; 2005, c. 54, s. 86.

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.

2001, c. 9, s. 183.

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.

2001, c. 9, s. 183.

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.

(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.

2001, c. 9, s. 183.

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

(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.

(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.

(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.

(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).

2001, c. 9, s. 183; 2005, c. 54, s. 87.

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.

(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.

(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.

2001, c. 9, s. 183.

712. (1) Where the by-laws of a bank holding company so provide, no shares of any class shall be issued unless the shares have first been offered to the shareholders holding shares of that class, and those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at such price and on such terms as those shares are to be offered to others.

(2) Notwithstanding the existence of a pre-emptive right, a shareholder of a bank holding company has no pre-emptive right in respect of shares of a class to be issued

(a) for a consideration other than money;

(b) as a share dividend; or

(c) pursuant to the exercise of conversion privileges, options or rights previously granted by the bank holding company.

(3) Notwithstanding the existence of a pre-emptive right, a shareholder of a bank holding company has no pre-emptive right in respect of shares to be issued

(a) where the issue of shares to the shareholder is prohibited by this Part; or

(b) where, to the knowledge of the directors of the bank holding company, the offer of shares to a shareholder whose recorded address is in a country other than Canada ought not to be made unless the appropriate authority in that country is provided with information in addition to that submitted to the shareholders at the last annual meeting.

2001, c. 9, s. 183.

713. (1) A bank holding company may issue conversion privileges, options or rights to acquire securities of the bank holding company, and shall set out the conditions thereof

(a) in the documents that evidence the conversion privileges, options or rights; or

(b) in the securities to which the conversion privileges, options or rights are attached.

(2) Conversion privileges, options and rights to acquire securities of a bank holding company may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from any securities to which they are attached.

(3) Where a bank holding company has granted privileges to convert any securities issued by the bank holding company into shares, or into shares of another class or series, or has issued or granted options or rights to acquire shares, if the by-laws limit the number of authorized shares, the bank holding company shall reserve and continue to reserve sufficient authorized shares to meet the exercise of such conversion privileges, options and rights.

2001, c. 9, s. 183.

714. Except as provided in sections 715 to 717, or unless permitted by the regulations, a bank holding company shall not

(a) hold shares of the bank holding company or of any body corporate that controls the bank holding company;

(b) hold any ownership interests of any unincorporated entity that controls the bank holding company;

(c) permit any of its subsidiaries to hold any shares of the bank holding company or of any body corporate that controls the bank holding company; or

(d) permit any of its subsidiaries to hold any ownership interests of any unincorporated entity that controls the bank holding company.

2001, c. 9, s. 183.

715. (1) Subject to subsection (2) and to its by-laws, a bank holding company may, with the consent of the Superintendent, purchase, for the purpose of cancellation, any shares issued by it, or redeem any redeemable shares issued by it at prices not exceeding the redemption price thereof calculated according to a formula stated in its by-laws or the conditions attaching to the shares.

(2) A bank holding company shall not make any payment to purchase or redeem any shares issued by it if there are reasonable grounds for believing that the bank holding company is, or the payment would cause the bank holding company to be, in contravention of any regulation referred to in subsection 949(1) or (2) or any direction made pursuant to subsection 949(3).

(3) A bank holding company may accept from any shareholder a share of the bank holding company surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on any such share except in accordance with section 718.

2001, c. 9, s. 183.

716. (1) A bank holding company may permit its subsidiaries to hold, in the capacity of a personal representative, shares of the bank holding company or of any body corporate that controls the bank holding company or ownership interests in any unincorporated entity that controls the bank holding company, but only if the subsidiary does not have a beneficial interest in the shares or ownership interests.

(2) A bank holding company may permit its subsidiaries to hold by way of a security interest shares of the bank holding company or of any body corporate that controls the bank holding company, or any ownership interests of any entity that controls the bank holding company, if the security interest is nominal or immaterial when measured by criteria established by the bank holding company that have been approved in writing by the Superintendent.

2001, c. 9, s. 183; 2005, c. 54, s. 88(F).

717. (1) Subject to subsection (2), where a bank holding company purchases shares of the bank holding company or fractions thereof or redeems or otherwise acquires shares of the bank holding company, the bank holding company shall cancel those shares.

(2) If a subsidiary of a bank holding company, through the realization of security, acquires any shares of the bank holding company or of any body corporate that controls the bank holding company or any ownership interests in an unincorporated entity that controls the bank holding company, the bank holding company shall cause its subsidiary to, within six months after the day of the realization, sell or otherwise dispose of the shares or ownership interests.

2001, c. 9, s. 183.

718. (1) The stated capital of a bank holding company may be reduced by special resolution.

(2) A bank holding company shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the bank holding company is, or the reduction would cause the bank holding company to be, in contravention of any regulation referred to in subsection 949(1) or (2) or any direction made pursuant to subsection 949(3).

(3) A special resolution to reduce the stated capital of a bank holding company shall specify the stated capital account or accounts from which the reduction of stated capital effected by the special resolution will be deducted.

(4) A special resolution to reduce the stated capital of a bank holding company has no effect until it is approved in writing by the Superintendent.

(5) No approval to reduce the stated capital of a bank holding company may be given by the Superintendent unless application therefor is made within three months after the time of the passing of the special resolution and a copy of the special resolution, together with a notice of intention to apply for approval, has been published in the Canada Gazette.

(6) In addition to evidence of the passing of a special resolution to reduce the stated capital of a bank holding company and of the publication thereof, statements showing

(a) the number of the bank holding company’s shares issued and outstanding,

(b) the results of the voting by class of shares of the bank holding company,

(c) the bank holding company’s assets and liabilities, and

(d) the reason why the bank holding company seeks the reduction of capital

shall be submitted to the Superintendent at the time of the application for approval of the special resolution.

2001, c. 9, s. 183.

719. (1) Where any money or property was paid or distributed to a shareholder or other person as a consequence of a reduction of capital made contrary to section 718, a creditor of the bank holding company may apply to a court for an order compelling the shareholder or other person to pay the money or deliver the property to the bank holding company.

(2) No person holding shares in the capacity of a personal representative and registered on the records of the bank holding company as a shareholder and therein described as the personal representative of a named person is personally liable under subsection (1), but the named person is subject to all the liabilities imposed by that subsection.

(3) An action to enforce a liability imposed by subsection (1) may not be commenced more than two years after the date of the act complained of.

(4) This section does not affect any liability that arises under section 794.

2001, c. 9, s. 183.

720. (1) On a purchase, redemption or other acquisition by a bank holding company of shares or fractions thereof issued by it, the bank holding company shall deduct from the stated capital account maintained for the class or series of shares so purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares of that class or series so purchased, redeemed or otherwise acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or other acquisition.

(2) A bank holding company shall adjust its stated capital account or accounts in accordance with any special resolution referred to in section 718.

(3) On a conversion of outstanding shares of a bank holding company into shares of another class or series, or on a change of outstanding shares of the bank holding company into shares of another class or series, the bank holding company shall

(a) deduct from the stated capital account maintained for the class or series of shares converted or changed an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted or changed, and dividing by the number of outstanding shares of that class or series immediately before the conversion or change; and

(b) record the result obtained under paragraph (a) and any additional consideration received pursuant to the conversion or change in the stated capital account maintained or to be maintained for the class or series of shares into which the shares have been converted or changed.

(4) For the purposes of subsection (3) and subject to the bank holding company’s by-laws, where a bank holding company issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion.

(5) Shares issued by a bank holding company and converted into shares of another class or series, or changed under subsection 217(1) into shares of another class or series, become issued shares of the class or series of shares into which the shares have been converted or changed.

2001, c. 9, s. 183.

721. On a conversion of any debt obligation of a bank holding company into shares of a class or series of shares, the bank holding company shall

(a) deduct from the liabilities of the bank holding company the nominal value of the debt obligation being converted; and

(b) record the result obtained under paragraph (a) and any additional consideration received for the conversion in the stated capital account maintained or to be maintained for the class or series of shares into which the debt obligation has been converted.

2001, c. 9, s. 183.

722. (1) The directors of a bank holding company may declare and a bank holding company may pay a dividend by issuing fully paid shares of the bank holding company or options or rights to acquire fully paid shares of the bank holding company and, subject to subsection (4), the directors of a bank holding company may declare and a bank holding company may pay a dividend in money or property, and where a dividend is to be paid in money, the dividend may be paid in a currency other than the currency of Canada.

(2) The directors of a bank holding company shall notify the Superintendent of the declaration of a dividend at least ten days prior to the day fixed for its payment.

(3) If shares of a bank holding company are issued in payment of a dividend, the bank holding company shall record in the stated capital account maintained or to be maintained for the shares of the class or series issued in payment of the dividend the declared amount of the dividend stated as an amount of money.

(4) The directors of a bank holding company shall not declare and a bank holding company shall not pay a dividend if there are reasonable grounds for believing that the bank holding company is, or the payment would cause the bank holding company to be, in contravention of any regulation referred to in subsection 949(1) or (2) or any direction made pursuant to subsection 949(3).

2001, c. 9, s. 183.

723. (1) A bank holding company shall not issue subordinated indebtedness unless the subordinated indebtedness is fully paid for in money or, with the approval of the Superintendent, in property.

(2) A person shall not in any prospectus, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a bank holding company refer to the subordinated indebtedness otherwise than as subordinated indebtedness.

(3) When issuing subordinated indebtedness, a bank holding company may provide that any aspect of the subordinated indebtedness relating to money or involving the payment of or the liability to pay money in relation thereto be in a currency other than that of Canada including, without restricting the generality of the foregoing, the payment of any interest thereon.

2001, c. 9, s. 183.

724. Sections 81 to 135 apply in respect of bank holding companies, subject to the following:

(a) references to “bank” in those sections are to be read as references to “bank holding company”;

(b) references to “this Act” in those sections are to be read as references to “this Part”;

(c) references to “Part VII” in those sections are to be read as references to “Division 7 of Part XV”;

(d) references to “this Part” in those sections are to be read as references to “this Division”;

(e) the reference to “subsections 137(2) to (5) and sections 138 to 141 and 145” in subsection 93(1) is to be read as a reference to “subsections 726(2) to (5) and sections 727 to 730 and 734”; and

(f) the reference to “section 71 or 77” in subsection 97(3) is to be read as a reference to “section 715 or 720”.

2001, c. 9, s. 183.