Cooperative Credit Associations Act (S.C. 1991, c. 48)

Act current to 2016-04-12 and last amended on 2015-06-23. Previous Versions

Permitted Related Party Transactions

Marginal note:Nominal value transactions

 Notwithstanding anything in this Part, an association may enter into a transaction with a related party of the association if the value of the transaction is nominal or immaterial to the association when measured by criteria that have been established by the conduct review committee of the association and approved in writing by the Superintendent.

Marginal note:Secured loans

 An association may make a loan to or a guarantee on behalf of a related party of the association or take an assignment of or otherwise acquire a loan to a related party of the association if

  • (a) the loan or guarantee is fully secured by securities of or guaranteed by the Government of Canada or the government of a province; or

  • (b) the loan is a loan made to a related party who is a natural person on the security of a mortgage of the principal residence of that related party.

Marginal note:Deposits

 An association may enter into a transaction with a related party of the association if the transaction consists of a deposit by the association with a financial institution that is a direct clearer or a member of a clearing group under the by-laws of the Canadian Payments Association and the deposit is made for clearing purposes.

Marginal note:Borrowing, etc., from related party

 An association may borrow money from, take deposits from, or issue debt obligations to, a related party of the association.

Marginal note:Acquisition of assets
  •  (1) An association may purchase or otherwise acquire from a related party of the association

    • (a) securities of, or securities guaranteed by, the Government of Canada or the government of a province;

    • (b) assets fully secured by securities of, or securities guaranteed by, the Government of Canada or the government of a province; or

    • (c) goods for use in the ordinary course of business.

  • Marginal note:Sale of assets

    (2) Subject to section 406, an association may sell any assets of the association to a related party of the association if

    • (a) the consideration for the assets is fully paid in money; and

    • (b) there is an active market for those assets.

  • Marginal note:Asset transactions with financial institutions

    (3) Notwithstanding any of the provisions of subsections (1) and (2), an association may, in the normal course of business and pursuant to arrangements that have been approved by the Superintendent in writing, acquire or dispose of any assets, other than real property, from or to a related party of the association that is a financial institution.

  • Marginal note:Asset transactions in restructuring

    (3.1) Despite any of the provisions of subsections (1) and (2), an association may acquire any assets from, or dispose of any assets to, a related party of the association as part of, or in the course of, a restructuring, if the acquisition or disposition has been approved in writing by the Superintendent.

  • Marginal note:Goods or space for use in business

    (4) An association may lease assets

    • (a) from a related party of the association for use in the ordinary course of business of the association, or

    • (b) to a related party of the association,

    if the lease payments are made in money.

  • Marginal note:Approval under section 233.5

    (5) An association may acquire any assets from, or dispose of any assets to, a related party of the association under a sale agreement that is approved by the Minister under section 233.5.

  • 1991, c. 48, s. 418;
  • 2001, c. 9, s. 317;
  • 2007, c. 6, s. 178.
Marginal note:Services
  •  (1) An association may enter into a transaction with a related party of the association if the transaction

    • (a) subject to subsection (2), consists of a written contract for the purchase by the association of services used in the ordinary course of business;

    • (a.1) in the case of a retail association, involves, subject to subsection (4), the provision of services, other than loans or guarantees, normally provided to the public by the association in the ordinary course of business;

    • (b) consists of a written contract with a financial institution or an entity in which the association is permitted to have a substantial investment pursuant to section 390 that is a related party of the association

      • (i) for the networking of any services provided by the association or the financial institution or entity, or

      • (ii) for the referral of any person by the association to the financial institution or entity, or for the referral of any person by the financial institution or entity to the association;

    • (c) consists of a written contract for such pension or benefit plans or their management or administration as are incidental to directorships or to the employment of officers or employees of the association or its subsidiaries; or

    • (d) involves the provision by the association of management, advisory, accounting, information processing or other services in relation to any business of the related party.

  • Marginal note:Order concerning management by employees

    (2) Where an association has entered into a contract pursuant to paragraph (1)(a) and the contract, when taken together with all other such contracts entered into by the association, results in all or substantially all of the management functions of the association being exercised by persons who are not employees of the association, the Superintendent may, by order, if the Superintendent considers that result to be inappropriate, require the association, within such time as may be specified in the order, to take all steps necessary to ensure that management functions that are integral to the carrying on of business by the association are exercised by employees of the association to the extent specified in the order.

  • Marginal note:Exception

    (3) Despite subsection 413(2), an association is deemed not to have indirectly entered into a transaction in respect of which this Part applies if the transaction is entered into by an entity that is controlled by the association and the business of which is limited to the activity referred to in paragraph 390(2)(c) and the transaction is on terms and conditions at least as favourable to the association as market terms and conditions, as defined in subsection 425(2).

  • Marginal note:Loans or guarantees not included

    (4) The provision of services, for the purposes of paragraph (1)(a.1), does not include the making of loans or guarantees.

  • 1991, c. 48, s. 419;
  • 1997, c. 15, s. 152;
  • 2001, c. 9, s. 318;
  • 2007, c. 6, s. 179.
 
Date modified: