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

Marginal note:Prohibited transactions

• 413. (1) Except as provided in this Part, an association shall not, directly or indirectly, enter into any transaction with a related party of the association.

• Marginal note:Transaction of entity

  (2) Without limiting the generality of subsection (1), an association is deemed to have indirectly entered into a transaction in respect of which this Part applies where the transaction is entered into by an entity that is controlled by the association.

• Marginal note:Exception

  (3) Subsection (2) does not apply where an entity that is controlled by an association is a financial institution incorporated or formed under the laws of a province and is subject to regulation and supervision, satisfactory to the Minister, regarding transactions with related parties of the association.

• Marginal note:Idem

  (4) Subsection (2) does not apply in respect of transactions entered into by an entity that is controlled by an association if the transaction is a prescribed transaction or is one of a class of prescribed transactions.

Marginal note:Nominal value transactions

414. 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

415. 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

416. 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

417. 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

• 418. (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.