Part 12.1
Amalgamation
77.1 Effect
of having issued investment shares
Part 13
Dissolution and Liquidation and Dissolution
78 Ranking
of special shares
79 Issue
of certificate without discharge of bankruptcy
Part 14
Reviews
79.1 Reviewable
action
80 Review
board proceedings
Part 15
Enforcement
81 Auditor’s working papers
82 Orders
affecting subsidiaries subject to Securities Act
83 Civil
penalties and interest
Part 16
Miscellaneous
84 Valuation
of property
85 Transitional
- financial lease and conditional
sales agreements
86 Transitional
- loan limit exemptions
90 Amendment
of O.C. 446/79
91 Repeals
92 Coming
into force
Schedules
Part 1
Interpretation and Application
Interpretation of
Regulation
1(1) In this Regulation,
(a) “Act”
means the Credit Union Act;
(b) “buyer”,
in relation to a conditional sales agreement, includes a bailee;
(c) “conditional
sales agreement” means an agreement for a sale of personal property where the
right of property or the right of possession in whole or in part remains in the
seller notwithstanding that the actual possession of the personal property
passes to the buyer, and where credit is extended by the seller to the buyer;
(d) “co‑operative”
means an association within the meaning of section 1(b) of the Co‑operative Associations Act or a
co‑operative association incorporated or registered under an Act of
Canada or of a province similar to that Act or to any of the Acts referred to
in that clause;
(e) “farming
operation” means an agricultural activity conducted for gain or reward on land
whose use for agriculture is a permitted or discretionary use under the land
use by‑law of the municipality in which the land is situated or is
permitted under section 74 of the Planning
Act, including
(i) the cultivation of land,
(ii) the raising of livestock or poultry,
(iii) the raising of fur‑bearing animals, pheasants or fish,
(iv) the production of agricultural field crops or the growing of
mushrooms,
(v) the production of fruit, vegetables, sod, trees, shrubs and other
specialty horticultural crops,
(vi) the production of eggs and milk, and
(vii) the production of honey;
(f) “financial
lease agreement” means an agreement for a lease of personal property whereby
credit is extended by the lessor to the lessee for the purpose of enabling the
lessee to meet his financial obligations under the lease;
(g) “financial
leasing corporation” means a corporation whose business activities are limited
to or, if the corporation is a credit union or Central, include entering into
or acquiring and operating conditional sales agreements or financial lease
agreements or both, including, if the corporation is a subsidiary or an
affiliate of a credit union or Central, raising money for the purpose of
financing those activities and holding and investing in short term securities
any money so raised pending the employment of the money in those activities;
(h) “initial
fiscal year” means, in respect of a new credit union, its initial fiscal year
of operation following the date when approval to commence business was granted
to it under section 24 of the Act;
(i) “insurer”
means an insurer within the meaning of the Insurance
Act who is authorized to carry on the business of insurance in Canada under
a statute of Canada or of a province;
(i.01) “investment
grade securities” means debt securities or preferred shares
(i) with ratings at least as high as those listed in the following
table,
(ii) with ratings by other rating organizations, both the rating and
the organization being approved by the Minister, or
(iii) that meet the requirements of subsection
(4):
Rating Organization
|
Commercial
Paper
|
Bonds/
Debentures
|
Preferred
Shares
|
Standard and Poor’s Corporation
|
A-1
|
A
|
A
|
Moody’s Investor Service
|
P-1
|
A
|
A
|
Dominion Bond Rating Service
Ltd.
|
R-1
|
A
|
Pfd-2
|
Canadian Bond Rating Service
Ltd.
|
A-1
|
A
|
P-2
|
(i.1) “investment
shares” means the class of shares referred to in section 43.2(1);
(j) “land”
includes physical land;
(k) “Ministerial
Regulation” means the Credit Union
(Ministerial) Regulation (Alta. Reg. 250/89);
(l) “mortgage
loan” means a loan that is or is to be secured by a mortgage of land;
(m) “quality
mortgage loan”, subject to section 52, means a mortgage loan where
(i) the amount of the indebtedness, together with the amount of the
indebtedness under other mortgages on the land mortgaged that rank equally with
or in priority to the mortgage loan,
(A) does not exceed 75% of the fair market rate
of the land at the time the mortgage is granted, or
(B) repealed AR 66/99 s2,
(ii) a government guarantee or insurance exists such that the amount
of any loan loss for which the credit union is potentially liable cannot exceed
25% of the fair market rate of the land;
(m.1) “residential
mortgage loans” means mortgage loans by the credit union to individuals to
finance one to 4 unit residential dwellings where at least one of the units is
to be owner‑occupied and the parcel of land on which it is situated does
not exceed 40 acres;
(n) “section
24 approval date” means, in respect of a new credit union in its initial fiscal
year, the date when approval to commence business was granted to it under
section 24 of the Act;
(o) “seller”,
in relation to a conditional sales agreement, includes a bailor;
(p) repealed
AR 111/2004 s2.
(2) The
definitions in section 2(1) and (2) apply to this Regulation.
(2.1) The definition of “assets” in
section 2(9) applies in sections 2(4), 15(1)(b), 17, 26(3), 31, 32, 33, 38(1),
43(1), 44(2), 54, 54.1, 65.01(c) and 73(1)(a) and sections 2(1)(a)(i) and (ii)
and (c)(iv) and 3(a) and (b) and 4 of Schedule 2.
(3) For the purposes of this Regulation,
a corporation is able to continue as a going concern if, in the opinion of the
person making the determination, it will be able to realize its assets and
discharge its liabilities in the normal course of its business for the
foreseeable future.
(4) Where
a debt security or preferred share issued by a corporation does not have a
rating, it is an investment grade security if the lower of
(a) the
corporation’s corporate rating, and
(b) the
rating of that other security issued by that corporation that has terms that
are most closely similar to the terms of the debt security or preferred share
in question,
or either of those ratings if both do not exist, is used as
the rating for that security to determine whether or not the security meets the
requirements of the table set out in subsection (1)(i.01).
AR 249/89
s1;21/95;66/99;111/2004
Interpretation
provisions applicable to the Act
2(1) For the purposes of the Act,
(a) “beneficially
owned” includes owned through a trustee, legal representative, agent or other
intermediary;
(a.1) “executive
managers” means, in relation to a credit union,
(i) its chief executive officer or general manager,
(ii) its chief financial officer, and
(iii) vice‑presidents not included in subclause (i) or (ii) who
perform executive and policy functions,
or the persons who occupy
positions similar to those positions or fulfil functions normally performed by
persons occupying those positions.
(b) “guarantee”
includes the issue of a letter of credit;
(b.1) “internal
operations report” means,
(i) where a credit union has an auditor, the management letter
accompanying the audited financial statements, and
(ii) where it does not have an auditor, a report on the credit union’s
internal controls;
(c) repealed
AR 21/95 s3;
(d) “total
capital” means total capital within the meaning of section 2 of Schedule 2.
(2) In
section 2(4)(f), (6) and (7) of the Act, “held” means held as the legal owner
or as the owner according to the share or voting records of the corporation or
trust in question.
(3) For
the purposes of section 2(6)(c) of the Act, a body corporate holds a voting
interest if it is in possession of a proxy entitling it to vote that interest
whichever way it chooses.
(4) With
reference to section 1(1)(dd)(iii) of the Act and for the purposes of the Act
except for section 111(3)(a) thereof, “insolvent” includes a case where the
realizable value of the credit union’s assets is or would be less than the
aggregate of its liabilities and the stated capital of its common and
investment shares.
(5) The
amount prescribed for the purposes of section 1(1)(gg) and (aaa) of the Act is
$2 000 000.
(6) Notwithstanding
section 1(1)(gg) and (aaa) of the Act, for the purposes of the Act, a new
credit union in its initial fiscal year is a large or a small credit union
depending on whether the aggregate of the money that has been paid to the
credit union as share subscriptions under section 24(2)(c)(ii) of the Act and
deposits under section 24(2)(c)(iii) of the Act as at the section 24 approval
date is equal to or in excess of $2 000 000 or is less than
$2 000 000.
(7) For
the purposes of section 1(1)(jj) of the Act, the book value of the shares
issued by a financial institution that is a subsidiary or affiliate of Central
and that are held by Central shall be deducted in determining Central’s members’
equity.
(8) The
other equity accounts referred to in section 1(1)(jj)(iii) of the Act are
reserves and contributed surplus as accounted for in accordance with section 5
of the Act.
(9) For
the purposes of sections 1(1)(gg), 1(1)(aaa), 89(1), 99(1)(b), 126(1), 183(7)
and 199(2), and the 2nd reference in section 47(2), of the Act and the
provisions of Part 13 of the Act that apply any of those enactments in relation
to Central, “assets”, in relation to a credit union or Central, as the case may
be, means the total book value of its assets, calculated in accordance with the
methods referred to in or pursuant to section 5(1)(a) and, where applicable,
5(2) or (3) of the Act.
(10) The class of employees referred to in section
2(4)(e) of the Act consists of employees who are chief financial officers,
branch managers or chief credit officers of the body corporate, or who perform
functions for the body corporate normally performed by any such person.
AR 249/89
s2;21/95;66/99;111/2004
Application of
Securities Act
3 With reference to section 3(2)
of the Act, the Securities Act does
not apply to common shares issued by Central.
AR 249/89 s3
Part 2
Administration
Minimum periods for
retention of documents
4(1) The period of time for which a body corporate
is required by section 15(1) of the Act to retain a document is
(a) as
long as the body corporate exists, in the case of
(i) minutes of board and of general meetings,
(ii) the general ledger or other book of final entry containing
summaries of year‑to‑year transactions, and
(iii) special agreements necessary to an understanding of the entries
in the general ledger or other book of final entry referred to in subclause
(ii),
and
(b) in
the case of
(i) all other records and books of account and of accounts and
vouchers necessary to verify the information contained in those records and
books, and
(ii) minutes of committee and executive committee meetings,
the period ending 6 years
after the end of the last fiscal year to which the records and books of account
or minutes relate.
(2) The
period following the dissolution of a credit union or Central for which the
Corporation is required by section 15(4) of the Act to retain a document is
(a) in
the case of a document referred to in subsection (1)(a), the period ending 5
years after the date of the dissolution, and
(b) in the case of a document referred to in
subsection (1)(b), the period ending 6 years after the end of the last fiscal
year to which the records and books of account relate.
AR 249/89 s4
Provision of
confidential information
5 Pursuant to section 16(3) or (4) of the
Act, the Minister or the Corporation, as the case may be, may provide
(a) information
referred to in section 16(1) of the Act that is required by an insurer to
enable it to negotiate insurance coverage on behalf of a body corporate, to
that insurer,
(b) with
the specific consent of a body corporate and for any purpose that the Minister
or the Corporation considers expedient, any information about that body
corporate to any other body corporate,
(c) aggregated
financial data about credit unions based on data provided by them individually,
whether in the form of registered information or not, to any person,
(d) until
June 30, 1997, any information or documents referred to in section 16(1) of the
Act to the Ombudsman for the purpose of an investigation under the Ombudsman Act, or
(e) to the person who prepares an internal
operations report, for the purpose of enabling that person to fulfil the duties
and functions imposed on such a person by the Act, such information as is
necessary to enable the achievement of that purpose.
AR 249/89
s5;31/97;48/97;66/99
Fees
6 The fees payable to the
Minister for services rendered by him under the Act or, except where
specifically prescribed in this Regulation, under this Regulation are fees in
the same amount as are payable to the Registrar of Corporations for
corresponding services under the Business
Corporations Act.
AR 249/89 s6;21/95
Part 3
Commencement of Business
Minimum share subscription
for commencing business
7 The number of common shares prescribed
for the purposes of section 24(2)(c)(ii) of the Act is
(a) in
the case of a credit union with no bond of association, 250 000, and
(b) in the case of a credit union with a bond of
association, 10 000.
AR 249/89 s7
Minimum deposit
requirement therefor
8 The amount prescribed as required
deposits for the purposes of section 24(2)(c)(iii) of the Act is
(a) in
the case of a credit union with no bond of association, $750 000, and
(b) in the case of a credit union with a bond of
association, $30 000.
AR 249/89 s8
Conditions for
holding of deposits and share subscriptions
9(1) The conditions on which Central is required to
hold deposits and share subscriptions and is permitted to allow withdrawals
from those deposits and subscriptions under section 24(4) of the Act are as set
out in this section.
(2) Central
must pay interest on the money at a rate at least equal to and on conditions
that are not less favourable than the rate and conditions generally applicable
to 30‑day term deposits by credit unions with Central.
(3) Central
may allow withdrawals only for the purpose of enabling the payment of
incorporation and initial organization expenses included in a credit union’s
business plan that have been approved by the Corporation.
(4) Central
must report total withdrawals to the Corporation on a weekly basis.
(5) Where
the total withdrawals have exceeded or are about to exceed the level of
incorporation and initial organization expenses approved, Central must, if the
Corporation so directs, suspend further withdrawals until a review of the
credit union’s business plan has been conducted.
(6) In this section, “withdrawals” does not include
the reimbursement of money paid by subscribers or depositors for the shares or
deposits.
AR 249/89 s9
Part 4
Organization and Structure
Interpretation
10 In this Part,
(a) “borrower”
means a person to whom credit is extended pursuant to a financial lease
agreement or a conditional sales agreement;
(b) “estimated residual value” means, in respect
of personal property leased or to be leased under a financial lease agreement
by a financial leasing corporation, the value of the property immediately after
the expiry of the lease as estimated by the financial leasing corporation at
the time of its acquisition of the property.
AR 249/89 s10
Change from no bond
to bond
11 The conditions prescribed in relation to
section 28(2) of the Act are that the credit union satisfy the Minister that
(a) section
24(2)(c)(i), (ii), (iii) and (iv) of the Act, as those subclauses apply in
respect of a credit union with a bond of association, have been complied with,
with references in those subclauses to the approval to commence business being
replaced by references to the coming into effect of the amendment of the
articles effecting the change, and
(b) the change is not contrary to the public
interest.
AR 249/89 s11
Additional businesses
permitted to credit unions
12(1) The businesses that a credit union may carry on
pursuant to section 46(3) of the Act are
(a) acting
as a custodian of property,
(b) subject
to section 13, acting as a financial leasing corporation,
(c) providing
tax preparation services, so long as the individuals who actually perform those
services on the credit union’s behalf have demonstrated competence and have
participated in a course in that field,
(c.1) providing
registry services pursuant to Schedule 12 to the Government Organization Act, and
(d) any
other business that is incidental or conducive to the attainment of a credit
union’s purposes or any of them.
(2) A credit union may not act as the underwriter
within the meaning of the Securities Act
of securities issued or to be issued by another entity.
AR 249/89
s12;66/99;111/2004
Credit union acting
as financial leasing corporation
13(1) In this section,
(a) “agreement”
means a financial lease agreement or a conditional sales agreement held or to
be held by a credit union;
(b) “property”
means the personal property leased or conditionally sold or to be leased or
conditionally sold under an agreement.
(2) A
credit union may, with the approval of the Corporation, act as a financial
leasing corporation if the following terms and conditions are met:
(a) the
credit union must not direct its customers or potential customers to particular
dealers in the property;
(b) at
no time may the aggregate of the estimated residual values of all the property
of the credit union, excluding motor vehicles and subject to subsection (2.1),
leased under financial lease agreements exceed 10% of the aggregate of the cost
of acquisition of that leased property to the credit union;
(c) the
estimated residual value of property leased under a financial lease agreement
must not exceed
(i) in the case of motor vehicles, 50% of their cost of acquisition,
and
(ii) in the case of any other property and subject to subsection
(2.1), 20% of its cost of acquisition
to the credit union;
(d) the
specific property must be selected by the lessee or buyer and
(i) must be acquired by the lessor or seller at the request of the
lessee or buyer, or
(ii) must have been acquired by the lessor or seller specifically in
respect of an earlier agreement;
(e) a
financial lease agreement held by the credit union must yield a return that will
compensate the credit union for not less than its full investment in the leased
property and, without limiting the generality of the foregoing, the agreement
must yield a rate of return that is reasonable, taking into consideration the
term of the lease and the other terms and conditions of it and the rate of
return sought by other lessors in respect of the financial leasing of similar
property subject to similar terms and conditions, and that is based on the
aggregate of
(i) rental charges paid or to be paid by the lessee,
(ii) estimated tax benefits of the lease to the credit union,
including tax credits and capital cost allowance claims, and
(iii) the amount of,
(A) where the lessee or a third party who is
dealing at arm’s length with the credit union has, on or before the
commencement of the lease, contracted to purchase the leased property or
unconditionally guaranteed the resale value of the leased property at the
expiry of the lease, the purchase price or the resale value so guaranteed, or
(B) in any other case, the estimated residual
value of the property, to the maximum specified in clause (c);
(f) an
agreement must include a provision
(i) assigning and conveying to the lessee or buyer the benefit of all
warranties, guarantees or other undertakings made by a manufacturer or supplier
relating to the property, or
(ii) setting out the responsibilities of the credit union with regard
to the warranties, guarantees or other undertakings referred to in subclause
(i);
(g) an
agreement must substantially transfer to the lessee or buyer the benefits and
risks incidental to the operation of the property and must not entail
responsibility on the part of the credit union to install, promote, service,
clean, maintain or repair the property;
(h) where
a lessee or buyer defaults in the manner set out in an agreement and the
default is not waived or the agreement, including any renewals or extensions of
it, expires, the credit union must
(i) liquidate its interest in the property, or
(ii) enter into a new financial lease agreement or conditional sales
agreement, as the case may be, in respect of that property
within 2 years of that
default or expiry or, where proceedings in respect of that property have
prevented the credit union from complying with that requirement within that
period, within 2 years of the completion of those proceedings.
(2.1) There shall be deducted from the
estimated residual values of property for the purposes of the calculations
under subsection (2)(b) and (c)(ii) those portions of the estimated residual
values that are either insured or in respect of which the lessee or a third
party who is dealing at arm’s length with the credit union has, on or before
the commencement of the lease agreement, contracted to purchase the leased property
or has unconditionally guaranteed the resale value of the leased property at
the end of the lease agreement.
(3) Subsection
(2)(d) does not apply in respect of an agreement acquired by the credit union
from another person.
(4) An agreement may be renewed on its expiry and
may be extended during its term.
AR 249/89
s13;21/95;111/2004
Subsidiary or
affiliate as service corporation
14(1) Pursuant to section 46(4) of the Act, a
subsidiary or an affiliate of a credit union may act as a service corporation,
so long as the subsidiary or affiliate does not hold any shares issued by any
other corporation.
(2) In
subsection (1), “service corporation” means a corporation that limits its
activities to the provision of services to entities that do not extend beyond
the credit union and its subsidiaries and affiliates, other credit unions
within the meaning of section 1(1)(p) of the Act and equivalent corporations
registered under legislation elsewhere in Canada that is equivalent to the Act,
and financial institutions.
AR 249/89
s14;66/99;170/2006
Subsidiary or
affiliate as financial leasing corporation
15(1) A subsidiary or an affiliate of a credit union
may act as a financial leasing corporation only if
(a) it
does not hold any shares issued by any other corporation,
(b) not
less than 80% of its assets consists of receivables under its financial lease
agreements or conditional sales agreements or both, and the value of the
property to which those agreements relate, and
(c) the
terms and conditions specified in section 13 are met, with references in that
section to a credit union being deemed to be references to the subsidiary or
affiliate.
(2) The
restriction in subsection (1)(b) does not apply until the expiration of the
period of 12 months after the corporation first becomes a subsidiary or
affiliate of the credit union if it was a financial leasing corporation when it
became such a subsidiary or affiliate.
(3) With respect to section 46(5)(b) of the Act, a
subsidiary or an affiliate may lend money in the course of its acting as a
financial leasing corporation.
AR 249/89 s15
Additional businesses
permitted to subsidiaries and affiliates
15.1(1) Pursuant
to section 46(4) of the Act, a subsidiary or an affiliate of a credit union
may, with the prior approval of the Corporation and subject to any other law,
carry on any of the following financial services businesses:
(a) as
a corporation that is an insurer within the meaning of the Insurance Act;
(b) as
a real property brokerage corporation, that is a corporation whose activities
are limited to acting as an agent for vendors or purchasers of real estate
where the real estate is owned or administered by the credit union;
(c) as
a real property corporation, that is a corporation whose primary business
activity consists of holding, managing or otherwise dealing with
(i) real property, or
(ii) shares issued by a corporation (including another real property
corporation) or ownership interests in an unincorporated entity that is
primarily engaged in holding, managing or otherwise dealing with real property;
(c.1) as
a mortgage broker within the meaning of the Real Estate Act;
(c.2) subject
to subsection (2), as a bank;
(c.3) subject
to subsection (2), as a retail association within the meaning of section 1 of
the Retail Association Regulations under the Cooperative Credit
Associations Act (Canada) (SOR/2002‑216);
(c.4) as
a loan servicing corporation, being a corporation that performs administrative
functions to carry out the obligations of a loan holder under a loan agreement;
(d) as
a factoring corporation, that is a corporation whose activities are limited to
acting as a factor in relation to accounts receivable, including the lending of
money and the raising of money for the purpose of financing those activities;
(e) as
a mutual fund distribution corporation, that is a corporation that is
registered as a mutual fund dealer under the Securities Act;
(f) as
an asset management corporation, that is a corporation that administers and
disposes of property acquired through realization of a security interest held
by or for the benefit of the credit union;
(g) as
an investment counselling corporation, that is a corporation that is registered
as an investment counsel under the Securities
Act;
(h) as
a portfolio management corporation, that is a corporation that is registered as
a portfolio manager under the Securities
Act;
(i) as
an information management corporation, that is a corporation whose activities
are limited to
(i) the collection, manipulation and transmission of information that
is primarily financial or economic in nature, or
(ii) the sale of related software.
(2) Subsection
(1)(c.2) or (c.3) only applies if the credit union has entered into a written
agreement with the Minister with respect to that subject‑matter.
AR 66/99
s7;111/2004;170/2006
Joint ventures and
partnerships
16 Pursuant to section 230(k) of
the Act, section 46 of the Act and sections 14, 15 and 15.1 of this Regulation
apply in relation to a joint venture or partnership in which a credit union has
an interest as if that entity were a subsidiary of the credit union.
AR 249/89
s16;111/2004;170/2006
Disposal of assets in
initial fiscal year
17 Pursuant to section 230(n) of
the Act, the reference in section 47(2) of the Act to 10% of the credit union’s
assets as at the end of the previous fiscal year shall be deemed, in respect of
a new credit union in its initial fiscal year, to be substituted by a reference
to 10% of its members’ equity as at the section 24 approval date.
AR 249/89 s17;111/2004
Trustee under self‑directed
RRSP, RRIF or RESP
18 The classes of transaction
prescribed for the purposes of section 46(7) of the Act are acting under self‑directed
registered retirement savings plans, self‑directed registered retirement
income funds and self‑directed registered education savings plans under
the Income Tax Act (Canada).
AR 249/89 s18
Additional permitted
related party transactions
19(1) The related party transactions that a credit
union or its subsidiary may enter into without prior board authorization,
unless the by‑laws require that authorization, pursuant to section
51(2)(c)(ii) of the Act are as set out in this section.
(2) Repealed
AR 111/2004 s9.
(3) A
large credit union or its subsidiary may maintain with a related party that is
a securities dealer cash balances, in an amount not exceeding $50 000, in
connection with the disposition of securities authorized as investments under
Part 8 of the Act.
(4) A
subsidiary may acquire or dispose of its own shares from or to a party related
to its holding credit union if the consideration is at fair market rate.
(5) A credit union or its subsidiary may enter into
a contract with its auditor for the provision of auditing services and the
payment of remuneration for those services.
AR 249/89 s19;111/2004
Exemption from
procedures requirement
20 Small credit unions are exempt
from section 54 of the Act.
AR 249/89 s20
Part 5
Directors, Officers, Employees
and Committees
Qualifications of
directors
21 The period prescribed for the
purposes of section 65(2)(h) of the Act is 60 days.
AR 249/89 s21
Functions, etc. to be
performed by board
22 To the extent that the following powers,
duties and functions are exercised or performed, a credit union shall ensure
that they are exercised or performed by resolution of the board:
(a) the
submission to a general meeting of any matter requiring its approval;
(b) the
filling of a vacancy on the board or on the audit or finance committee, or in
the office of auditor;
(c) the
removal of a director;
(d) the
appointment or removal of the chief executive officer, the chairman or the
president of the credit union;
(e) the
issue of securities;
(f) the
declaration of dividends or patronage rebates;
(g) repealed
AR 21/95 s6;
(g.1) authorization
of the certification of the completeness and accuracy of a disclosure statement
issued under Part 8;
(h) approval
of the annual financial statements or of the annual budget;
(i) approval
of any item requiring the prior authorization of the board with respect to a
related party transaction;
(j) the
establishment of written procedures pursuant to section 101(2) of the Act;
(k) the making of loans to, or the guaranteeing
of obligations of, its employees.
AR 249/89
s22;21/95;111/2004
Prescribed
authorization to delegate
23(1) The board of a credit union may, pursuant to
section 67(3) of the Act, delegate to the credit union’s executive committee,
if any, or to any committee, director or officer, any of its powers, duties or
functions except those described in section 22.
(2) Section 22 does not prohibit or restrict the
delegation under subsection (1) of the power to issue securities in the manner
and on terms that have been authorized by resolution of the board.
AR 249/89 s23
Non-delegable
committee functions
24 The by‑laws of a credit
union may not provide for the delegation under section 82(3) of the Act of any
of the functions referred to in section 81 or 87(a), (b), (c), (d), (f) or (g)
of the Act.
AR 249/89 s24;111/2004
Part 6
Financial Disclosure and Audit
Members’ equity and
financial reporting
25 Deductions from capital,
within the meaning of section 2(1) of Schedule 2 shall not be made in
determining members’ equity for any purpose related to the preparation or
auditing of a credit union’s financial statements or any reporting done
pursuant to Part 7 of the Act or any other financial reports made to the
Minister or to the Corporation.
AR 249/89 s25;21/95
Form of remuneration
disclosure resolution
25.1 The form of the resolution required by section 83(4) of the
Act is as follows:
BE IT RESOLVED THAT (name
of credit union) disclose the total annual remuneration and
benefits received directly or indirectly from the credit union and its
subsidiaries and affiliates by each of the following of its executive managers
as a notation to its annual financial statements in the form set out in
Schedule 3 to the Credit Union (Principal) Regulation:
(Names
or positions of executive managers whose remuneration and benefits are to be
disclosed).
AR 21/95 s8;66/99;111/2004
Disclosure of
remuneration in annual financial statements
25.2 If a resolution referred to in
section 25.1 has been passed by the members, the information prescribed for the
purposes of section 83(3)(e) of the Act includes the information required by
that resolution and Schedule 1.
AR 127/95
s2;66/99;111/2004
Joint ventures and
partnerships
26(1) Where a credit union has an interest in a joint
venture or a partnership, the credit union shall ensure that the financial
statements of the joint venture or partnership are audited and shall provide to
the Minister the financial statements of that entity for each fiscal year of
the entity, with the auditor’s report on them, within 3 months after the end of
each such fiscal year.
(2) Subsection
(1) does not apply to the extent that the Minister exempts the credit union
from the duty imposed by that subsection.
(3) The credit union shall state each joint
venturer’s or partner’s share of the assets, liabilities, income and expenses
of the joint venture or partnership in a note to the credit union’s annual
financial statements.
AR 249/89 s26
Reporting by auditor
on adverse financial changes
27(1) Where the auditor of a credit union considers
that there has been a change in the circumstances of the credit union or of any
of its subsidiaries that might reasonably be expected to affect the financial
position of the credit union materially and adversely, then, subject to this
section, the auditor shall forthwith report in writing to the credit union’s
audit committee and to the Minister what he considers to be the circumstances
that constitute that change and why he considers that those circumstances
constitute such a change.
(2) Without
limiting subsection (1), a change referred to in that subsection shall be
considered to have taken place where
(a) there
is evidence that the corporation has suffered a material financial loss or
there is a significant risk of its suffering a material financial loss,
(b) there
has been a significant failure of or weakness in an internal control system
affecting the accounting records of the corporation,
(c) reporting
by the credit union to the Minister or to the Corporation, as required by the
Act or the regulations, is misleading or misrepresents a particular issue,
(d) the
credit union has failed to report or does not intend to report a matter and
that failure to report is or would be materially misleading,
(e) conditions
exist which cast doubt on the ability of the corporation to continue as a going
concern, including, without limiting the generality of the foregoing, any
situation where there is or are, with respect to the corporation,
(i) recurring financial operating losses,
(ii) serious deficiencies in working capital,
(iii) inability to obtain financing sufficient for continued
operations,
(iv) inability to comply with the terms of existing loan agreements or
other types of financial contracts,
(v) insufficient funds to meet liabilities, or
(vi) a plan to curtail significantly or to liquidate operations,
(f) there
are circumstances which suggest that the directors or officers are acting
imprudently, negligently, fraudulently or incompetently and that their actions
may represent a significant risk to the corporation, or
(g) circumstances
exist where the interests of customers having deposits with the credit union
require that, or will be best protected if, those circumstances are brought to
the attention of the Minister and of the audit committee.
(3) Notwithstanding
anything in subsections (1) and (2), the auditor shall report circumstances
which fall within subsection (2)(f) only to the Minister.
(4) Notwithstanding
subsection (1), the auditor is not required to report to the Minister a matter
under this section, other than under subsection (2)(f) or (g), if he satisfies
himself that the credit union has already reported or is required within the
next 30 days to report that matter to the Minister.
(5) Nothing in this section is to be construed as
expanding the scope of an audit.
AR 249/89 s27
Meeting between Minister
and auditor
28 At the request of and on being
given reasonable written notice by the auditor of a credit union, the Minister
shall meet with the auditor to discuss the financial business and affairs of
the credit union relating to the audit of its business and affairs.
AR 249/89 s28
Auditor’s right to
information from Minister
29 The Minister shall, on the written
request of the auditor of a credit union, permit the auditor, during normal
business hours, to inspect the following documents so far as they relate to the
credit union and are in his possession:
(a) any
completed reports that have been sent to the credit union relating to
examinations conducted under section 95 or 96 of the Act;
(b) copies
of orders or directions made by the Minister or by the Corporation under the
Act;
(c) any appraisals or information relating to
appraisals made under section 229 of the Act.
AR 249/89 s29;111/2004
Minister’s access to
audit papers
30 The auditor of a credit union
shall, on the written request of a person authorized under section 98(1) of the
Act, permit that person, during normal business hours, to inspect working
papers maintained by the auditor in respect of any audit of the credit union’s
business.
AR 249/89 s30;111/2004
Part 7
Investments
Land acquisition in new
credit union’s initial fiscal year
31 Pursuant to section 230(n) of
the Act, the reference in section 99(1)(b) of the Act to 5% of the credit
union’s assets as at the end of the fiscal year preceding the acquisition shall
be deemed, in respect of a new credit union in its initial fiscal year, to be a
reference to 10% of the credit union’s members’ equity as at the section 24
approval date.
AR 249/89 s31;111/2004
Interest in
partnership land
32 Where a credit union has an
interest in a partnership that owns land, there shall be taken into account, in
determining the percentage of the credit union’s assets referred to in section
99(1)(b) of the Act or section 31 of this Regulation, as the case may be, the
value of that portion of the partnership land that is equal to the proportion
of the credit union’s beneficial interest in that land in relation to the
totality of the beneficial interests of all the partners.
AR 249/89 s32;111/2004
Prohibited
investments
33 The amount prescribed for the
purpose of section 102(1) of the Act is 2% of the credit union’s total assets,
determined as at the time of acquisition of the securities.
AR 249/89
s33;66/99;111/2004
34 to 36 Repealed AR 66/99 s9.
Investments in
subsidiaries, affiliates, etc.
37(1) Pursuant to section 230(n) of the Act, where
references are made in sections 104 and 105 of the Act to a credit union’s
total capital as at the end of the fiscal year preceding the acquisition of
shares, then, in relation to acquisitions of shares by a new credit union in
its initial fiscal year, that total capital shall be treated as being equal to
nothing.
(1.1) The
percentage of total capital prescribed for the purposes of sections 104(3)(a)
and 105(1)(a) of the Act is 10%.
(1.2) The
percentage of total capital prescribed for the purposes of sections 104(3)(b)
and 105(1)(b) of the Act is 20%.
(2) The corporation prescribed for the purposes of
section 105(2)(c) of the Act is one that is an affiliate of the credit union
and that carries on a business referred to in section 46(4) of the Act.
AR 249/89
s37;21/95;111/2004
Liquidity investments
38(1) The amount prescribed for the purpose of
section 106(1)(b) of the Act is the credit union’s total assets as at the end
of the calendar month occurring 2 months previous to the calendar month
referred to in that section.
(2) The
liquid assets prescribed for the purpose of section 106(1)(b) of the Act are
(a) in
the case of a credit union that is a member of Central, deposits with Central
designated by Central as liquidity deposits, and
(b) in
the case of a credit union that is not a member of Central,
(i) cash,
(ii) deposits and bearer deposit notes, bankers’ acceptances and other
similar instruments issued by an eligible financial institution that mature or
can be redeemed within one year, at their face or redemption value as the case
may be, plus any accrued interest,
(iii) commercial paper that mature within one year from the date of
issue and are investment grade securities, at face value, and
(iv) securities issued or guaranteed by the Government of Canada, the
government of a province or a municipality, at their market value.
(3) In the case of a credit union that is not a
member of Central, not less than 2% of the amount prescribed in subsection (1)
must mature or be capable of being redeemed within 90 days.
AR 249/89
s38;172/90;66/99;111/2004
Part 8
Equity and Deposits
Division 1
Equity Generally
Statements on
application for shares
39(1) A credit union shall ensure that each
application made for shares to be issued by it is in writing and clearly
indicates that
(a) the
shares applied for are not guaranteed or insured by the Corporation, and
(b) in
the case of common shares, the redemption of the shares is at the discretion of
the credit union subject to the restrictions contained in the Act and this
Regulation.
(2) If the application is for investment shares, it
must be in the form referred to in section 43.41(4)(b).
AR 249/89 s39;21/95
Statement on share
certificates
40 Where share certificates are issued
by a credit union, each share certificate must state that the shares covered by
the certificate are not guaranteed or insured by the Corporation.
AR 249/89 s40
Intervals for common
share statements
41(1) The intervals prescribed for the purposes of
section 107(10) of the Act are once every year.
(2) Notwithstanding
subsection (1), if
(a) a
statement is returned because the shareholder cannot be found,
(b) the
credit union has made reasonable efforts to locate the shareholder, and
(c) thereafter
the shareholder still cannot be found,
the intervals prescribed by subsection (1) become
interrupted and do not resume until the shareholder has informed the credit
union in writing of the shareholder’s new address.
AR 249/89
s41;66/99;111/2004
Disclosure of
information before issue of common shares
41.1(1) The circumstances prescribed for the purposes
of section 107(11) of the Act are
(a) where
an individual already holds, or following the issue of the shares to an
individual the individual will hold, 3000 or more common shares, exclusive of
shares received as patronage rebates or dividends, or
(b) where
the Minister has given written notice to the credit union that, in his opinion,
the credit union is directly soliciting the purchase of common shares issued by
it.
(2) For
the purposes of subsection (1)(b), the credit union is not directly soliciting
the purchase of common shares to the extent that, following the purchase, the
person’s holding would not exceed the
minimum holding of common shares required by the credit union as a prerequisite
for membership or for the provision by it of a service or benefit.
(3) The
information prescribed for the purposes of section 107(11) of the Act is
(a) that
contained, and in the form set out, in Form 1 of Schedule 3,
(b) the
most recent audited financial statements and quarterly financial statements of
the credit union, and
(c) the
statement of material change, if any, required by subsection (4).
(4) A statement of material change is required for
the purposes of section 107(11) of the Act and this section, if Division 1.1
and Form 2 of Schedule 3 would require a statement of material change were the
shares investment rather than common shares.
AR 21/95 s11;111/2004
Quarterly financial
statements
41.2(1) A credit union shall prepare quarterly
financial statements where such statements are necessary to enable the credit
union to comply with section 107(11) of the Act, this Part or a disclosure
statement set out in Schedule 3.
(2) A large credit union shall have the quarterly
financial statements reviewed by its auditor where the initial issue of a
disclosure statement in the form set out in Form 2 of Schedule 3 is about to
take place more than 3 months after the end of the most recently completed
fiscal year of the credit union.
AR 21/95 s11;111/2004
Capital adequacy
41.3 The rules for determining whether a
credit union is maintaining adequate capital for the purposes of section 109 of
the Act are those prescribed in Schedule 2.
AR 21/95 s11;111/2004
Transfer of common
shares
42 The circumstances prescribed
for the purposes of section 110(1)(a) of the Act are that the transferor and
the transferee both be members of the same family, whether related by blood,
marriage or adoption or by virtue of an adult interdependent relationship.
AR 249/89
s42;109/2003;111/2004
Transfer of common
shares in new credit union
42.1 A transaction that is approved in writing
by the Minister and that results only from
(a) the
incorporation of a new credit union that is assuming part or all of the
retained earnings of an institution referred to in section 228 of the Act in
return for common shares issued by the new credit union,
(b) an
agreement to transfer those shares to members or prospective members of the new
credit union, being members or shareholders or former members or shareholders
of that institution, and
(c) the
dissolution or proposed dissolution of that institution,
is a transaction prescribed for the purposes of section
110(1)(b)(iii) of the Act.
AR 260/90 s2;111/2004
Redemption of shares
43(1) Pursuant to section 1(1)(dd)(iii) of the Act
and in construing section 111(3)(a) of the Act, “insolvent” includes a case
where the realizable value of the credit union’s assets after the redemption or
cancellation would be less than the aggregate of
(a) its
liabilities, and
(b) the
amounts that would be required for the redemption if all common and investment
shares issued by it were being redeemed at that time.
(2) Pursuant
to section 230(n) of the Act, the reference in section 111(3)(b) of the Act to
the end of the fiscal year previous to the acquisition of shares shall be
deemed, in respect of a new credit union in its initial fiscal year, to be a
reference to the section 24 approval date.
(3) The
circumstances prescribed for the purposes of section 111(4)(b) of the Act are
(a) where
a member is transferring the balance in his common share account with the
credit union acquiring the shares to a common share account with another credit
union, and the credit union acquiring the shares verifies the member’s
membership at the other credit union and forwards the money payable from its
acquisition of the shares directly to the other credit union on account of the
member’s purchase of common shares from that other credit union,
(b) where
a member is expelled,
(c) where
a member has attained the age of 65 years, or
(d) where,
according to the records of the credit union, a member no longer resides in the
area specified in its by‑laws as the area over which it conducts its business
provided that the total of all shares acquired by the
credit union in the circumstances described in clauses (a), (b) and (d)
cumulatively do not exceed 10% of its capital as at the end of the fiscal year
preceding the acquisition.
AR 249/89 s43;172/90;21/95;66/99;111/2004
Protection of
investment share dividends
43.05 A large credit union shall not
pay any dividend on its common shares if any dividend on investment shares
issued by it has been declared and remains unpaid.
AR 21/95 s13
Division 1.1
Investment Shares
Interpretation and
application
43.1(1) In this Division and in Form 2 of Schedule 3,
(a) “authorizing
by‑law” means the by‑law referred to in section 43.2(3);
(b) “authorizing
instrument” means the authorizing by‑law or the authorizing resolution,
or both, as the case may be;
(c) “authorizing
resolution” means the board resolution referred to in section 43.2(4) for the
relevant series, and includes the authorizing by‑law to the extent that
that by‑law includes a matter that could have been included in that
resolution;
(d) “class”
means, with reference to a credit union’s overall share capital, the class
known as investment shares;
(e) “disclosure
statement” means a statement for the relevant series in the form set out in
Form 2 of Schedule 3;
(f) “material
change” means a change that has taken place in the 5 years preceding the time
in question in the business, operations or capital of a credit union, other
than a change that results from a change in interest rates, and that would reasonably
be expected to have a significant effect on the market value of investment
shares issued by it;
(g) “receipt
for the series” means the receipt issued by the Minister under section 43.31(1)
for the series in question;
(h) “series”
means the series or, if more than one, each series of investment shares
referred to in section 43.2(2);
(i) “shares”
means investment shares.
(2) This Division and Form 2 of Schedule 3 apply
only to large credit unions, and references in them to a credit union are to be
taken as referring only to a large credit union.
AR 21/95 s13;111/2004
Authorization to
create and issue investment shares
43.2(1) A large credit union may, subject to and in
accordance with Part 9 of the Act and this Part, create, issue and maintain one
(and only one) class of special shares, to be known as investment shares.
(2) Investment
shares may be issued only in one or more series.
(3) A
credit union that has not yet issued any investment shares but that wishes to
do so must by special resolution make a by‑law for the class, which must
at least create the class and which may contain any limitations, restrictions
and conditions on an issue or on the board’s powers with respect to making
authorizing resolutions and any further matters, including those which may or
must be included in authorizing resolutions, that are allowed by this
Regulation or the Act to be included in it.
(4) Before
a credit union issues investment shares in a particular series, its board must
pass a resolution specifically for that series, and the resolution must, with
respect to that series or those shares,
(a) create
the series and authorize the issue of the investment shares in the series,
(b) designate
the series by a sequential letter of the alphabet,
(c) specify
the issue price of the shares,
(d) contain
any restrictions, other than those imposed by this Part, on the issue or
transferability of the shares,
(e) specify
(i) the dividend rights attaching to the shares, including the rate
of, or the formula used to calculate, dividends and whether the right to
dividends is cumulative or non‑cumulative,
(ii) the redemption rights attaching to the shares, including any
right of the credit union to redeem the shares at its option, any rights of
their holders to require the credit union to redeem the shares, and the
repurchase date, if any, of the shares, and
(iii) any rights of the holders of the shares to require the credit
union to convert them into investment shares of another series,
(f) comply
with any limitations, restrictions or conditions contained in the authorizing
by‑law, notwithstanding anything in this subsection, and
(g) contain
any other matters required by this Division to be included in it,
and the resolution may
contain any further matters that are considered appropriate or that are allowed
by this Regulation or the Act to be included in it.
(5) Notwithstanding
subsection (4), the authorizing resolution does not need to deal with a matter
to the extent that it is adequately dealt with in the authorizing by‑law.
(6) An
authorizing instrument may not entitle a credit union
(a) to
exchange shares in a series for common shares, or for shares in any other
series, that have been issued by the credit union,
(b) except
at the instance of the holder, to convert investment shares in the series into
investment shares of another series, or
(c) to convert shares into common shares issued
by the credit union.
AR 21/95 s13;111/2004
General investment
share provisions
43.3(1) Investment shares have no par value.
(2) Investment
shares are non‑assessable, and their holders are not liable to the credit
union or to its creditors in respect of them.
(3) Investment
shares carry no voting rights.
(4) Investment
shares may not be held by any person other than one to whom the credit union
has lawfully issued them or a person to whom they have been transferred in
compliance with section 43.6.
(5) Notwithstanding
section 108(5) of the Act, a credit union shall maintain a stated capital
account for each series in which investment shares are issued and shall add to
the stated capital account the full amount of money it receives for investment
shares in that series and, if investment shares in the series are issued in
payment of a dividend, it shall add the declared amount of the dividend, stated
as an amount of money, to the stated capital account for the series.
(6) The
rights, terms and conditions attaching to all investment shares of any one
series are equal.
AR 21/95 s13;111/2004
Minister’s receipt
authorizing issue
43.31(1) On application by a credit union that wishes to
issue investment shares, the Minister shall issue a receipt to the credit union
if
(a) it
has provided to the Minister
(i) a copy of the authorizing by‑law, with a certification
properly executed on behalf of the credit union that it is a true copy and that
the authorizing by‑law complies with the Act and this Part,
(ii) a copy of the authorizing resolution, with a certification
properly executed on behalf of the credit union that it is a true copy and that
the authorizing resolution complies with the authorizing by‑law, the Act
and this Part,
(iii) a disclosure statement,
(iv) repealed AR 21/95 s26,
(v) any written evidence that the Minister requires to establish that
the credit union is in compliance with section 43.5(1)(a), (b) and (c),
(vi) a letter from the credit union’s auditor to the Minister stating
that the auditor has read the disclosure statement and knows of no
misrepresentations in the information in the disclosure statement that is derived
from the audited financial statements or that is within his knowledge as a
result of his audit or, if applicable, his review of any financial statements,
(vii) letters from all professional advisers whose opinions have been
relied on and referred to or included in the disclosure statement, consenting
to the reference or inclusion in the disclosure statement, and
(viii) a specimen share certificate, if share certificates are to be
issued for the series,
(b) the
Minister is satisfied that the documents provided under clause (a) comply with
this Part, and
(c) the
credit union has paid the fee specified in subsection (2).
(2) The
fee referred to in subsection (1)(c) is
(a) $1000,
if it is the first application for a receipt, or
(b) $500,
if it is the second or a subsequent application for a receipt,
to be issued to the
credit union under subsection (1).
(3) A
credit union shall ensure that, as of the date of the disclosure statement, all
information included in the disclosure statement is in all material respects
complete and accurate and that the disclosure statement does not omit to state
a material fact that is necessary to make the information, in the light of the
circumstances under which it is presented, not misleading.
(4) The
Minister shall enter into the register all documents provided under subsection
(1)(a) and a copy of each receipt for the series.
(5) If the application for a receipt under
subsection (1) covers more than one series of investment shares, the receipt
may cover both or all the series in respect of which the application is made.
AR 21/95
ss13,26;111/2004
Amendments affecting
investment shares
43.4(1) A credit union may, with the prior approval of
the Minister, at any time after the Minister has issued a receipt for the series
but before issuing any investment shares in the series, amend an authorizing
instrument or the disclosure statement.
(2) The
credit union may not make any amendment to the rights, privileges, obligations
or other features of any series after any investment shares in that series have
been issued.
(3) The
board shall certify as complete and accurate any amendments made to the
disclosure statement.
AR 21/95 s13;111/2004
Issue of investment
shares
43.41(1) A credit union may issue investment shares only
(a) in
accordance with the authorizing instruments,
(b) if
it has received a receipt for the series, and
(c) if
the issue is in compliance with Part 9 of the Act and this Part.
(2) A
credit union shall not issue investment shares, other than as a dividend on
investment shares to any person other than
(a) a
member,
(b) another
person where the shares are to be held under a registered retirement savings
plan or a registered retirement income fund of which a member is the
beneficiary,
(c) a
trustee, executor, administrator or guardian of a member, or
(d) the
Corporation or its subsidiary, if the issue is part of a financial
restructuring of the credit union.
(3) A
credit union shall not issue investment shares until they have been fully paid
for.
(4) A
credit union shall not issue investment shares, other than as a dividend,
unless the subscriber
(a) has
been provided with a copy of the disclosure statement and the other documents
required by section 43.81(1), and
(b) has
completed and signed an application in the form set out in Form 3 of Schedule
3.
(5) Subject
to subsection (6), a credit union shall not issue investment shares, other than
as a dividend, more than 6 months after the date of the receipt for the series.
(6) If
within 6 months after the date of the receipt for the series, a person enters
into an agreement to subscribe and pay for investment shares in the series by
instalments, the credit union may continue to issue investment shares in the
series to that person, in accordance with the instalment agreement, for up to 6
months after the instalment agreement was entered into.
(7) A credit union is not required to issue share
certificates for investment shares unless an authorizing instrument so
requires.
AR 21/95 s13;111/2004
Financial restrictions
on issue of shares
43.5(1) A credit union shall not issue investment
shares unless
(a) its
audited financial statements reflect that it has had net income, before
patronage rebates but after tax, in each of the last 2 fiscal years for which
audited financial statements are available or in 4 of the last 5 such fiscal
years,
(b) its
audited financial statements over the last 3 such fiscal years reflect that it
has had average annual net income, before patronage rebates but after tax, of
at least twice the projected average annual dividends, and
(c) its
most recent audited financial statements reflect that it had retained earnings
of at least 3 times the projected average annual dividends.
(1.1) For
the purposes of subsection (1)(b) and (c), “projected average annual dividends”
means the sum of
(a) the
total dividends from the shares to be issued (assuming all the shares
authorized for sale are sold) that are expected by the credit union to be
incurred over the 3 years following the date of their issue pursuant to any
rights or policies stated in the disclosure statement for the share issue,
divided by 3, and
(b) the
total dividends expected to be incurred over the next 12 months on all
investment shares that are currently outstanding.
(1.2) Where
the dividend right or policy is variable, the calculation of the rate is to be
based on the conditions existing at the time that the receipt for the current
disclosure statement is granted.
(2) A credit union shall not lend, or otherwise
finance or guarantee the financing of, the whole or any part of the
subscription price of shares to be issued by it.
AR 21/95
s13;66/99;111/2004
Investment share
register
43.51(1) A credit union shall establish a register for
its investment shares and maintain that register in regard to all investment
shares that remain outstanding, listing the name and address of, and the number
and series of investment shares held by, each holder, the date of issue or
transfer of the investment shares to the holder and, if applicable, the name of
the person who transferred the investment shares to the holder.
(2) Subject
to this section, any person who holds investment shares in a particular series
or an agent with a written authorization from any such person may, during the
normal business hours of the credit union, on giving reasonable notice to the
credit union and on paying such reasonable fee as the credit union requires,
examine the part of the investment share register that pertains to that series.
(3) The
credit union may require persons referred to in subsection (2), as a condition
of the access to the investment share register, to undertake in writing not to
use the information contained in the register for any purpose not related to
protecting or exercising rights of holders of investment shares in the series.
(4) The
credit union may deny a person access to its investment share register if it
reasonably concludes that it is not for a purpose related to protecting or
exercising rights of holders of investment shares in the series.
(5) In the absence of evidence to the contrary, the
investment share register constitutes proof of the legal ownership of
investment shares.
AR 21/95 s13;111/2004
Transfer of
investment shares
43.6(1) An investment share may not be transferred, and
a credit union shall not accept the transfer of an investment share issued by
it, unless the transfer
(a) is
made to a person referred to in section 43.41(2), or
(b) results
only from the death of the holder of the share or the realization of security
that consists of or includes the share,
and the transfer
complies with any transfer restrictions and procedures contained in this
Division and in the authorizing instruments.
(2) A
credit union shall enter a transfer of investment shares in the investment
share register, but only if
(a) it
has provided to the proposed transferee a copy of the disclosure statement and
the other documents required by section 43.81(1), and
(b) either
(i) it has received a transfer in the form set out in Form 4 of Schedule
3 duly completed and signed by the proposed transferor and transferee, or
(ii) the board is satisfied, having regard to the particular
circumstances, that the transfer form cannot be fully completed and signed and
passes a resolution accepting the transfer.
(3) The
restriction in subsection (2)(a) does not apply
(a) to
the extent that, by reason of the particular circumstances, the proposed
transferee or the proposed beneficial owner of the investment shares where the
proposed transferee is a person referred to in section 43.41(2)(b) or (c) will,
in effect, have received the documents previously, or
(b) where
the transfer results only from the death of the holder of the investment shares
or the realization of security that consists of or includes the investment
shares.
(4) A valid designation of a beneficiary under
section 47 of the Trustee Act, to the
extent that it has the effect of transferring investment shares on a person’s
death, is deemed to be a properly executed transfer for the purposes of subsection
(2).
AR 21/95 s13;111/2004
Acquisition of credit
union’s own investment shares
for redemption, etc.
43.61(1) Subject to this section and to the extent
provided by the authorizing instruments, a credit union may at any time acquire
investment shares issued by it for redemption either at its own instance or at
the instance of their holder.
(2) A
credit union shall not acquire any investment shares issued by it, or redeem or
cancel investment shares,
(a) under
any circumstances whatsoever, if there are reasonable grounds for believing
that the credit union is or would thereby become insolvent, or
(b) subject
to subsections (3) and (4), if any redemption or cancellation would result in
its ceasing to meet the requirements of, or if it is already in contravention
of, section 109 of the Act,
but this subsection
does not apply to acquisitions of investment shares pursuant to a lien or the
taking or realization of security.
(3) Subject
to subsection (2)(a), the authorizing resolution may entitle a holder to
require the credit union to acquire investment shares and redeem them if
(a) the
redemption results only from the death of their holder, or
(b) the
investment shares are held in a qualifying registered retirement income fund
and their value represents the minimum amount of the fund that the tax rules
under the Income Tax Act (Canada)
require to be taken into the holder’s income for the year.
(4) The
Corporation may exempt a credit union in whole or in part from the requirement
of subsection (2)(b) to meet the requirements of section 109 of the Act.
(5) A
credit union shall not acquire investment shares issued by it except for
redemption and, on the acquisition of any shares, it shall forthwith redeem and
cancel them.
(6) A
credit union acquiring investment shares for redemption shall pay for the
acquisition an amount equal to the price at which the shares were issued and
all unpaid dividends on them.
(7) A
credit union may acquire investment shares under this section from related
parties.
(8) A credit union shall give investment
shareholders advance notice that their investment shares will be acquired and
redeemed and shall deposit the proceeds in their account.
(9) Before
redeeming or cancelling all or a portion exceeding 25% of the initial issue of
a series of investment shares issued by it, a credit union shall notify the
Corporation of its intention to do so.
AR 21/95
ss13,26;111/2004
Dividends, patronage
rebates and priorities
43.7(1) Investment shares entitle their holders to the
dividends specified in the authorizing instruments and declared, and to receive
those dividends in preference to dividends or any return of capital payable to
the holders of common shares.
(2) All
series have, as among themselves, equal priority in respect of dividends and
return of capital, and if any cumulative dividends or amounts payable on return
of capital in respect of a series are not paid in full, the shares of all
series shall participate rateably in respect of accumulated dividends and
return of capital.
(3) In
construing section 112(2) of the Act as it applies to investment shares,
(a) the
by‑laws may not allow the credit union to issue investment shares as
patronage rebates, and
(b) the
authorization to issue shares generally as dividends extends only to the issue
of investment shares of the same series as the shares on which the dividend is
to be paid.
(4) Where
investment shares are issued as a dividend under section 112(2) of the Act, the
credit union may issue fractional shares.
(5) A
credit union shall not pay any dividend on investment shares in cash if
(a) repealed
AR 21/95 s26,
(b) its
total capital is less than, or payment of the dividend would result in its
total capital being less than, the amount of capital that the credit union is
required by section 109 of the Act to maintain.
(c) repealed AR 111/2004 s37.
AR 21/95
ss13,26;111/2004
Marketing of
investment shares
43.71(1) Where a credit union proposes to issue
investment shares other than by way of a dividend, its board shall take all
reasonable measures, including establishing, implementing and monitoring
appropriate policies, to ensure that
(a) the
shares are promoted and sold only by persons who understand and are fully
familiar with the requirements of Part 9 of the Act and this Part as to
investment shares and the details of the authorizing instruments, the
disclosure statement and the other documents referred to in section 43.81(1),
(b) the
persons promoting or selling the shares do not advise others, with respect to
investing in shares except in compliance with those provisions of the Securities Act that would apply to them
as advisers within the meaning of that Act, if that Act applied to them,
(c) those
persons receive no bonus, commission or other incentive for selling or promoting
the shares and are not subject to any disincentive for failing to sell or
promote the shares,
(d) the
shares are not sold or promoted in circumstances where the credit union has
reasonable grounds to believe that it would be contrary to the best interests
of any person to subscribe for the shares, unless that person has received
independent professional advice with respect to the subscription, and
(e) the
shares are issued only in accordance with Part 9 of the Act and this Part.
(2) A credit union shall not sell or promote
investment shares in any area at any of its places of business that is
primarily used by it for serving deposit and withdrawal transactions.
AR 21/95 s13;111/2004
Material changes
43.8 A credit union, on becoming aware of any
material change, shall forthwith
(a) prepare
a written material change statement describing the change, and
(b) send a copy of that statement to the
Minister and to each of its branches.
AR 21/95 s13
Disclosure,
examination and production of documents
43.81(1) Whenever a credit union provides a disclosure
statement to any person, it shall append to that statement copies of
(a) any
material change statements that it was required by section 43.8 to send to the
Minister in the preceding 5 years, if the events that constituted the material
changes reflected in them may still have a significant effect on the market
value of the shares,
(b) its
most recent audited financial statements, and
(c) if
applicable, its financial statements for the most recently completed quarter of
its fiscal year.
(2) A
credit union that has issued or that intends to issue investment shares shall
keep available for examination by current and prospective holders of shares at
all its branches copies of
(a) the
authorizing instruments,
(b) any
disclosure statements the credit union has provided to the Minister, and
(c) the
documents referred to in subsection (1)(a), (b) and (c), as amended or as most
recently issued as the case may be.
(3) The
credit union shall provide copies of the documents referred to in subsection
(2)(c) at no charge to any current or prospective holder of investment shares
who requests them.
(4) The credit union shall prominently display the
documents referred to in subsection (2)(c) at all its branches and at all times
while it remains an issuer of investment shares and while the documents remain
material to holders of investment shares.
AR 21/95 s13;111/2004
Rights of withdrawal
43.9(1) A person who has agreed to subscribe for
investment shares to be issued by a credit union may cancel the agreement by
ensuring that notice in writing cancelling the agreement is actually received
(a) by
or on behalf of the credit union through a method of serving documents
described in section 35 of the Act, or
(b) at
any branch of the credit union,
by the close of
business on the fifth business day of the credit union after the date when the
form applying to subscribe for the shares was signed by that person.
(2) On
cancelling the agreement under subsection (1), the person is relieved from any obligation to subscribe or
pay for the shares or is entitled to be refunded their full subscription price,
as the case may be.
(3) The subscription agreement is not cancellable
by a person who has entered into the agreement except pursuant to subsection
(1).
AR 21/95 s13
Division 2
Deposits
Deposits from related
party financial institutions
44(1) The purposes prescribed for the purposes of
section 115(1)(a) of the Act are
(a) to
support the short‑term liquidity needs of the credit union, and
(b) to
enable the clearance of cheques drawn on it.
(2) The amount prescribed for the purpose of
section 115(1)(a) of the Act is that amount that causes the aggregate of all
deposits received from all related party financial institutions to be equal to
2% of the credit union’s assets as at the end of the fiscal year preceding the
deposit or, in the case of a new credit union in its initial year, the section
24 approval date.
AR 249/89 s44;111/2004
Repayment of deposit
and share redemption on death
45 The amount prescribed for the
purpose of section 116(1) of the Act is $20 000.
AR 249/89
s45;66/99;111/2004
46 Repealed AR 66/99 s14.
Part 9
Borrowings
Meaning of net
borrowings
47 For the purposes of section
125(1) of the Act, “net borrowings”, in so far as it relates to borrowings from
a particular lender with whom deposits are held for the purpose of maintaining
the greater amount required by section 106(1) of the Act shall be deemed to
mean net borrowings from that lender less the total amount of deposits held by
the credit union with that lender other than those deposits so held only for
that purpose.
AR 249/89 s47;111/2004
48 Repealed AR 66/99 s14.
Part 10
Loans and Guarantees
49 Repealed AR 66/99 s14.
Financial leasing
corporation transactions - treatment as loans
50(1) Where a credit union or its subsidiary or
affiliate enters into a financial lease agreement or a conditional sales
agreement, a sum equal to the value of the property leased or conditionally
sold less the amount of any down payment or deposit made, shall be treated for
the purposes of the Act and this Regulation as having been loaned by it to the
lessee or buyer.
(2) Where a credit union or its subsidiary or
affiliate acquires a financial lease agreement or a conditional sales agreement
from another person, a sum equal to the value at which the property leased or
conditionally sold is acquired shall be treated for the purposes of the Act and
this Regulation as having been loaned by it to the lessee or buyer.
AR 249/89 s50
Required quality as
to mortgages
51(1) A credit union shall not make a mortgage loan,
or acquire the rights of a lender under a mortgage loan, unless the loan is a
quality mortgage loan.
(2) Notwithstanding subsection (1), a
credit union may make a mortgage loan that is not a quality mortgage loan
(a) if
the loan is not a residential mortgage loan and has previously been approved by
the Corporation, or
(b) as part of the sale of foreclosed land to a
purchaser if the prior approval of a special loans committee has been received
for the making of the loan.
AR 249/89
s51;21/95;111/2004
Determination of
quality mortgage loan where multiple security
52 Where
(a) a
loan is or is to be secured by a mortgage of land and also by at least one
other form of security, and
(b) the
loan would not, but for this section, be a quality mortgage loan,
then, for the purpose of determining whether the loan is a
quality mortgage loan, with respect to the mortgage of land as distinct from
the other form or forms of security, that loan may be considered as separate
loans and the aggregate amount of the loan divided up into separate amounts and
the determination made on the basis of the separate loan and amount allocated
in respect of that mortgage.
AR 249/89 s52
Limits on loans and
guarantees without credit committee review
53(1) The Corporation may establish financial limits
on a credit union’s ability to grant loans or give guarantees without a review
of the transaction by its credit committee.
(2) A credit union shall not grant a loan or give a
guarantee in an amount exceeding a limit established under subsection (1)
unless the transaction has been reviewed by its credit committee.
AR 249/89 s53
Loan maximums
54(1) Subject
to this section, the amount prescribed for the purpose of section 130(2)(a) of
the Act is
(a) in
the case of a credit union with assets of less than $10 000 000 as at
the end of the fiscal year preceding that in which the loan would be made or,
where applicable, as at the section 24 approval date, 100% of its total capital
as at whichever of those dates is applicable or $300 000, whichever is the
greater,
(b) in
the case of a credit union with assets of $10 000 000 or more but not
more than $500 000 000 as at the applicable date referred to in clause
(a), 40%, or with the prior approval of the Corporation such higher percentage
up to 100%, of its total capital as at that date or $500 000, whichever is
the greater, and
(c) in
the case of a credit union with assets of more than $500 000 000 as
at the applicable date referred to in clause (a),
(i) if it meets the requirements of section 109 of the Act, 40% of
its total capital as at that date, or
(ii) if it does not, 20% of its total capital as at that date or
$4 000 000, whichever is the greater.
(2) Repealed
AR 111/2004 s44.
(3) Where
the loan is secured by the assignment of
(a) securities
issued or guaranteed by the government of Canada or of a province or by an
agency of such a government, or
(b) deposits
with the credit union,
the limit prescribed
by subsection (1) is increased by an amount equal to the value of those
securities or deposits.
(4) Where
the whole or any part of the loan is guaranteed or insured by the government of
Canada or of a province or by an agency of such a government or is insured
under an insurance policy issued by an insurer, then the limit prescribed by
subsection (1) is increased by an amount equal to the amount so guaranteed or
insured.
(5) The
amount prescribed for the purpose of section 132(2)(a) of the Act is unlimited
where the loan is made to
(a) a
government or agency referred to in subsection (3)(a),
(b) a
municipality or a school district or regional health authority, or
(c) a university or technical institute
established or continued by or under the Post‑secondary Learning Act.
AR 249/89
s54;21/95;111/2004;170/2006
Inter-credit union
loans, etc.
54.1 The amount prescribed for the purpose of
section 130(3) of the Act is
(a) where
a small credit union is making a loan to or placing a deposit with a large
credit union, 100% of the small credit union’s total assets, or
(b) in any other case, 2% of the lender credit
union’s total assets, such assets being determined as at the time of its making
the loan or placing the deposit.
AR 66/99 s15;111/2004
Loans to individual
non-members
54.2 A loan that is part of a
program approved by the Corporation as a promotional loan program is a
prescribed class of transactions for the purpose of section 132(d) of the Act.
AR 66/99 s15;111/2004
Loans and guarantees
to related party financial institutions
55(1) Repealed AR 111/2004 s47.
(2) The amount prescribed for the purpose of
section 133(9) of the Act is 10% of the credit union’s members’ equity as at
the end of the fiscal year preceding that in which the transaction would take
place or, in the case of a new credit union in its initial fiscal year, as at
the section 24 approval date, subject however to a maximum of the amount
prescribed by section 54.
AR 249/89 s55;111/2004
56 Repealed AR 21/95 s16.
Loans, etc. to related
party auditors
57 Where a credit union or its subsidiary
makes a loan to, or guarantees the obligations of,
(a) a
party related to the credit union who is also the credit union’s auditor,
(b) a
corporation controlled by that auditor or more than 10% of whose voting shares
are held or beneficially owned, directly or indirectly, by that auditor, or
(c) any
other entity more than 10% beneficially owned, directly or indirectly, by that
auditor,
the credit union shall forthwith provide to the Minister a
written report containing the amount and the terms and conditions of the loan
or guarantee.
AR 249/89 s57
Part 11
Credit Union Deposit Guarantee Corporation
Authorization to
delegate
58 Pursuant to section 141(1) (incorporating
section 67(3)) of the Act, the Corporation may delegate
(a) to
a member of its staff who has been authorized pursuant to section 98 of the Act
to exercise powers under that section, its powers under section 97 of the Act,
and
(b) to a committee, its executive committee, an
officer or a member of its staff, if its by‑laws permit that delegation,
any of its other powers, duties or functions, except those under sections
22(b), 24(2)(b), 89(4), 128(3), 177(1), (2), (5) or (6), 180(1), (2) or (6),
183(5) or (6), 185(1), 191(3) and 214(1) of the Act.
AR 249/89 s58;111/2004
Composition of
special loans committees
59 Each special loans committee
is to consist of individuals appointed by the Corporation, one of whom is to be
an individual nominated to the office by Central or, if no individual has been
so nominated, one of the individuals appointed as directors under section
8(1)(a) of the Act, ex officio.
AR 249/89
s59;66/99;111/2004
Non-acquirable
securities
60 The securities prescribed for the
purposes of section 146(3) of the Act are
(a) securities
that are neither investment grade securities nor deposits in the Consolidated
Cash Investment Trust Fund, and
(b) investment shares, stabilization shares or
debentures issued by a credit union, except those issued as part of a financial
restructuring of the credit union.
AR 249/89
s60;21/95;66/99;111/2004
Maximum periodic
assessment
61 The rate prescribed for the
purpose of section 148 of the Act in any quarter commencing on November 1,
February 1, May 1 or August 1, is 1/16 of 1% of the average over the preceding
quarter of the aggregates of the balances of deposits held at the end of each
month by the credit union and its subsidiaries and affiliates and the
borrowings by the credit union as at each month‑end from Central, the
Corporation and eligible financial institutions.
AR 249/89
s61;111/2004;170/2006
Corporation’s common
shares
62(1) Subject to subsection (2), the Corporation may
create and issue an unlimited number and amount of common shares.
(2) The
following rights, privileges, restrictions and conditions are attached to
common shares issued by the Corporation:
(a) the
shares may be issued in one or more series;
(b) the
shares may be issued only to the Government and are not thereafter transferable
to any person;
(c) the
shares shall be issued for a consideration and issue price per share of $10 in
money or in other property, other than a promissory note or a promise to pay
given by the Government, and a share shall not be issued until the
consideration for the share is fully paid or provided;
(d) the
shares are non‑assessable and, on payment of the issue price, are fully
paid, and the Government is not liable in respect of them to the Corporation or
to its creditors or for any obligation, act or default of the Corporation;
(e) the
shares carry no right to vote at any meeting of the Corporation;
(f) the
shares are redeemable for the issue price but only on the written demand of the
Government, which demand may be exercised at any time on 90 days’ written
notice given to the Corporation;
(g) instruments
evidencing the shares must specify that the Government is entitled to the
shares or to the rights that they evidence and that they may not be
transferred;
(h) the rights carried by all the shares are
equal in all respects.
AR 249/89 s62
Stated capital
accounts
63(1) The Corporation shall maintain a separate
stated capital account for each series of shares it issues to the Government.
(2) The
Corporation shall add to the appropriate stated capital account the full amount
of consideration it receives for shares it issues.
(3) On
the issue of a share the Corporation shall not add to a stated capital account
in respect of the share it issues an amount greater than the amount of the
consideration it receives for the share.
(4) The
Corporation shall not reduce its stated capital or any stated capital account
except for the purposes of a redemption under section 62(2)(f).
(5) On
a redemption by the Corporation under section 62(2)(f), the Corporation shall
deduct from the stated capital account maintained for the series of shares
redeemed an amount equal to the result obtained by multiplying the stated
capital of the shares of that series by the number of shares of that series
redeemed, divided by the number of issued shares of that series immediately
before the redemption.
(6) Shares issued by the Corporation and redeemed
shall be cancelled.
AR 249/89 s63
Shares as capital of
the Corporation
64 Where there are any shares
issued by the Corporation and outstanding, all the capital of the Corporation
is appropriated to the Government.
AR 249/89 s64
Directors’
remuneration
65 The chairman and directors of
the Corporation shall be paid remuneration, fees and expenses in accordance
with an order made by the Minister.
AR 249/89 s65
Part 12
Credit Union Central Alberta Limited
Definitions
65.01 In this Part,
(a) “exempted
entity” means a credit union, Credit Union Central of Canada, the Corporation
or any subsidiary of the Corporation;
(a.1) “maximum
loan exposure level” means that amount of Central’s interests in all pooling
funds and other loans held, and guarantees given, by Central, excluding
(i) qualifying transitional loans, and
(ii) loans and guarantees to exempted entities,
that does not exceed 150%
of Central’s members’ equity as at the end of the previous fiscal year or such
higher amount as has previously been approved by the Minister;
(b) “maximum
single entity exposure level” means that amount of
(i) loans held by Central, where the borrower is not an exempted entity,
(ii) guarantees given by Central, where the person whose obligations
are guaranteed is an exempted entity, and
(iii) investments held by Central, where the person who issued the
securities underlying the investment is an exempted entity,
that does not exceed 15% of
Central’s members’ equity as at the end of the previous fiscal year or such
higher amount, if any, as is approved by the Minister;
(c) “pooling
fund” means a number of loans that are being held in a fund for the purpose of
enabling credit unions and Central to invest by purchasing interests in that
fund and to receive amounts of principal and interest computed by reference to
the value of their proportionate interests in the assets of the fund;
(d) “qualifying transitional loans” means those
loans, owned by Central for a period of less than 180 days from acquisition or
such longer period as is approved by the Minister, that are to be included in a
pooling fund.
AR 66/99 s18;111/2004
Credit unions that
are not Central members
65.1 For the purpose of section
157(a) of the Act, a small credit union that is exempted from the requirement
of membership of Central by the Minister in writing is prescribed not to be a
member of Central.
AR 172/90 s4;111/2004
Additional
composition of Central
66 Corporations prescribed for the purposes
of section 157(b) of the Act are as follows:
(a) co‑operatives;
(b) corporations
incorporated by or under any Act of Canada or a province acting as a central
credit union or, in relation to credit unions of that jurisdiction, in a role
similar to that of Central in relation to Alberta’s credit unions;
(c) repealed
AR 111/2004 s54;
(d) Co‑operative
Trust Company of Canada Ltd.;
(e) The
Co‑operators Group Limited;
(f) The
CUMIS Group Ltd.;
(g) repealed
AR 111/2004 s54;
(h) the
Corporation;
(i) Credit
Union Central Canada Limited;
(j) Federated
Co‑operatives Limited;
(k) CU
Electronic Transaction Services;
(k.1) corporations
that are financial institutions;
(k.2) provincial
corporations within the meaning of section 1(1)(r) of the Financial
Administration Act or, generally, equivalent corporations of other
provinces or territories or of Canada;
(k.3) Credential
Financial Services Inc.;
(k.4) Ethical
Funds Inc.;
(k.5) Everlink
Payment Services Inc;
(l) subsidiaries of credit unions or of Central
or of any corporation named or referred to in this section.
AR 249/89
s66;66/99;111/2004
Central’s purposes re
other corporations
67 Pursuant to section 158(3) of the Act,
Central’s purposes, as they relate to corporations referred to in section 66 of
this Regulation, are
(a) to
provide the services to those corporations of
(i) accepting deposits from them,
(ii) lending money to them,
(iii) guaranteeing their loans, and
(iv) providing and managing their clearing house arrangements,
(b) to
manage those of their investments that are held with Central, and
(c) to provide them with any other services that
support any purposes referred to in clauses (a) and (b).
AR 249/89 s67;111/2004
Delegation by board
68 Pursuant to section 163(9) of
the Act, Central’s by‑laws may not provide for the delegation by the
board of any powers, duties or functions referred to in section 22 of this
Regulation or the power to make, amend, repeal or replace by‑laws.
AR 249/89 s68;111/2004
Permitted businesses
69(1) The businesses that Central may carry on
pursuant to section 165(1.1)(b) of the Act are
(a) providing
corporations referred to in section 66 of this Regulation with educational,
technical and advisory services,
(b) acting
as a data processing corporation,
(c) subject
to the terms and conditions specified in section 13, acting as a financial
leasing corporation,
(d) any
other business that is incidental or conducive to the attainment of Central’s
purposes or any of them, and
(e) providing
corporations that operate automated teller machines or point‑of‑sale
terminals in Canada on the Everlink Payment Services Inc.’s network with
settlement facilities, including related
deposit and credit facilities, under that network.
(2) The
businesses that a subsidiary or an affiliate of Central may carry on pursuant
to section 165(1.2)(c) of the Act are
(a) the
businesses referred to in subsection (1)(a) and (b),
(b) acting
as a service corporation, so long as the subsidiary or affiliate does not hold
any shares issued by any other corporation,
(c) subject
to the terms and conditions specified or referred to in section 15, acting as a
financial leasing corporation, for which purpose section 15(3) applies,
(d) providing
credit card services to any person, and
(e) any
business, where the subsidiary or affiliate is a corporation referred to in
section 66(b).
(2.1) For
the purposes of section 165(1) (as it incorporates section 46(5)) of the Act, a
subsidiary or affiliate of Central is entitled to engage in the business of
lending money in the course of a business referred to in subsection (2)(d).
(3) In
this section,
(a) “data
processing corporation” means a corporation primarily engaged in the collection
and manipulation of information of a financial or economic nature and the
transmission of information of a financial nature;
(b) “service corporation” means a corporation
that limits its activities to the provision of services to Central or to
members of Central or to both.
AR 249/89
s69;13/96;111/2004;178/2005
Central’s joint
ventures and partnerships
70 Pursuant to section 230(k) of
the Act, section 165(1) of the Act, in so far as it incorporates section 46 of
the Act, section 165(2) of the Act and section 69(2) of this Regulation apply
in relation to a joint venture or partnership in which Central has an interest
as if that entity were a subsidiary of Central.
AR 249/89 s70;111/2004
Disclosure of
remuneration and benefits
70.1 Pursuant to section 166(1), as it
incorporates section 83(3)(e), of the Act, section 25.1 of this Regulation and
Schedule 1 apply in relation to Central.
AR 21/95 s18;111/2004
Financial disclosure
71 Sections 26 to 30 of this
Regulation apply in relation to Central.
AR 249/89 s71
72 Repealed AR 66/99 s20.
Investment powers
73(1) Pursuant to section 168(5) of the Act but
subject to subsection (2), Central shall hold and maintain securities averaging
in aggregate value over the course of each calendar month an amount that is not
less than the higher of
(a) 6%
of the aggregate value of the assets, as at the end of the previous month, of
all credit unions that keep deposits with Central, and
(b) that
level of liquidity that it considers prudent,
in the form of any or
all of the liquid assets described in section 38(2)(b) and (3).
(2) Liquid assets owned by Central for which a
third party claim exists are not to be counted as liquid assets for the
purposes of subsection (1) unless they exist under a national liquidity agreement for credit
unions.
AR 249/89
s73;21/95;66/99;111/2004
Acquisition of lender
rights under existing loan agreements
74 Pursuant to section 168(4) of the Act,
Central may acquire the rights of a lender under an existing loan agreement
only if it has obtained the prior approval of the Minister to do so or if
(a) the
acquisition is for a pooling fund,
(b) repayment
of neither the principal nor interest on the loan is in arrears,
(c) the
acquisition does not cause Central to exceed
(i) the maximum single entity exposure level, or
(ii) the maximum loan exposure level,
(d) in
making the acquisition, Central is not acting directly or indirectly in
competition with any credit union, and
(e) where
the loan agreement is secured by a mortgage,
(i) the mortgage is on land in Canada,
(A) on which a building exists or is being or is
about to be constructed,
(B) where a farming operation is carried on by a
farmer, or
(C) that is vacant land in a municipality whose
use is restricted by law to commercial, industrial or residential purposes,
(ii) the mortgage secures a quality mortgage loan, and
(iii) where the mortgage secures land situated
outside Alberta, the mortgage is guaranteed or fully insured by the government
of Canada or of a province or by an agency of such a government or is insured
under an insurance policy issued by an insurer.
AR 249/89
s74;172/90;21/95;66/99;111/2004
Loans and guarantees
to members of credit unions by Central
75 The conditions prescribed in relation to
section 172(6) of the Act are
(a) that,
in making the loan or giving the guarantee, Central is not acting to any extent
in competition with the credit union,
(b) that
the loan or guarantee is to be made or given by Central together with one or
more credit unions,
(c) if
the loan or guarantee is for an aggregate amount in excess of
$1 000 000, that the
transaction has received the prior approval of a special loans committee, and
(d) that
the loan or guarantee does not cause Central to exceed
(i) the maximum single entity exposure level, or
(ii) the maximum loan exposure level.
AR 249/89
s75;66/99;111/2004
Loans and guarantees
to members of Central by Central
76 The amount prescribed for the purposes of
section 172(7)(a) and (b) of the Act is that amount that would not cause
Central to exceed
(a) the
maximum single entity exposure level, or
(b) the maximum loan exposure level.
AR 249/89
s76;21/95;66/99;111/2004
77 Repealed AR 66/99 s21.
Part 12.1
Amalgamation
Effect of having issued
investment shares
77.1 A credit union with issued and
outstanding investment shares may not enter into an amalgamation agreement
unless, under the terms of that agreement,
(a) those
investment shares will be converted into investment shares issued by the
amalgamated credit union having dividend, redemption and conversion rights
equivalent to the rights attaching to the shares before the amalgamation, or
(b) the Corporation is permitted to, and does,
approve another manner of disposing of the investment shares issued by the
amalgamating credit union.
AR 21/95 s23
Part 13
Dissolution and Liquidation and Dissolution
Ranking of special
shares
78(1) For the purposes of section 204(b)(ii) of the
Act, proceeds shall be applied in priority of payment, as respects special shares amongst themselves,
(a) first
to the holders of investment shares to the extent of return of capital,
(b) second
to the holders of investment shares to the extent of unpaid dividends, and
(c) third
to the holders of stabilization preferred shares to the extent of return of
capital.
(2) Subject to subsection (1), the shares of all
series of investment shares participate rateably in respect first of return of
capital and then unpaid dividends.
AR 249/89
s78;21/95;111/2004
Issue of certificate
without discharge of bankruptcy
79 The exceptions prescribed with
reference to section 206(8) of the Act are where the Minister is satisfied that
all proceedings under the bankruptcy have terminated and that it is reasonable
to expect that no third party will be affected by the dissolution.
AR 249/89 s79;111/2004
Part 14
Reviews
Reviewable action
79.1 The refusal by the Corporation
to give an approval referred to in section 15.1 is a prescribed action for the
purposes of section 211(1)(n) of the Act.
AR 66/99 s22;111/2004
Review board
proceedings
80 Proceedings before a review
board held under section 212 of the Act shall be held in camera.
AR 249/89 s80;111/2004
Part 15
Enforcement
Auditor’s working
papers
81 For the avoidance of doubt,
the reference in section 217(1) of the Act to a document includes an auditor’s
working papers referred to in section 30 of this Regulation.
AR 249/89 s81;111/2004
Orders affecting
subsidiaries subject to Securities Act
82 Where an order under section
218 of the Act would relate to the performing of an activity by a subsidiary of
a credit union or of Central whose business activities are regulated by or
administered in accordance with the Securities
Act, the Minister shall not make the order unless the making of the order
has previously been consented to in writing by the Chief of Securities
Administration, as defined in that Act.
AR 249/89 s82;111/2004
Civil penalties and
interest
83(1) The amount prescribed for the purposes of
section 225(2) of the Act is $25.
(2) The interest rate prescribed for the purposes
of section 225(3) of the Act is the rate set out in section 10 of the
Ministerial Regulation.
AR 249/89 s83;111/2004
Part 16
Miscellaneous
Valuation of property
84(1) In this section, “appraiser” means a person who
(a) is
current in terms of being trained, experienced and certified in the appraisal
of land, and
(b) where
(i) the land appraised is located in Canada, is a member in good
standing of the Appraisal Institute of Canada or another appraisal institute
recognized by the Minister and is designated as an “Accredited Appraiser
Canadian Institute” or a “Canadian Residential Appraiser” or by an equivalent
designation recognized by the Appraisal Institute of Canada, or
(ii) the land appraised is located outside Canada, has qualifications
satisfactory to the Minister.
(2) An appraisal under section 229(1) of the Act
must be conducted by an appraiser in accordance with the standards of the
appraisal institute of which he is a member.
AR 249/89 s84;111/2004
Transitional -
financial lease and conditional sales agreements
85 Notwithstanding anything in
section 13 or 69, where a credit union or Central, as the case may be, entered
into a financial lease agreement or a conditional sales agreement before
November 1, 1989 and that agreement does not comply or causes that body
corporate to be in non‑compliance with that section, the body corporate
may renew the agreement, but only with the prior approval of the Corporation,
in the case of a credit union, or the Minister, in the case of Central.
AR 249/89 s85
Transitional - loan
limit exemptions
86(1) Where a loan that was originally made by a
credit union before November 1, 1989 exceeds any maximum loan limit imposed by
Part 11 of the Act, the Corporation may nevertheless approve the renewal or
restructuring of the loan.
(2) Where a loan that was originally made by
Central before November 1, 1989 exceeds any maximum loan limit imposed by
section 172 of the Act, the Minister may nevertheless approve the renewal of
the loan.
AR 249/89 s86;111/2004
87 Repealed AR 66/99 s23.
88 and 89 Repealed
AR 111/2004 s73.
Amendment of O.C.
446/79
90 Order in Council numbered 446/79 is amended by striking out “sections
6 and 64 of The Credit Union Act
(Alberta),” and “sections 6 et 64
de la Loi sur les Caisses Populaires
(Alberta),”.
AR 249/89 s90
Repeals
91 The following are repealed:
(a) the
Credit Union Regulation (Alta. Reg.
201/84);
(b) the
Standard By‑laws under the Credit
Union Act (Alta. Reg. 134/57);
(c) Order
in Council numbered 944/65;
(d) Order
in Council numbered 1037/69, as amended;
(e) Alberta Regulations 25/74, 333/74 and
241/75.
AR 249/89 s91
Coming into force
92 This Regulation comes into
force on November 1, 1989, but, notwithstanding section 5(3) of the Interpretation Act, section 91 comes
into force at the beginning of that day.
AR 249/89 s92