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

Marginal note:Margin loans

422. The Superintendent may establish terms and conditions with respect to the making by an association of margin loans to a director or senior officer of the association.

Marginal note:Exemption by order

• 423. (1) An association may enter into a transaction with a related party of the association if the Superintendent, by order, has exempted the transaction from the provisions of section 413.

• Marginal note:Conditions for order

  (2) The Superintendent shall not make an order referred to in subsection (1) unless the Superintendent is satisfied that the decision of the association to enter into the transaction has not been and is not likely to be influenced in any significant way by a related party of the association and does not involve in any significant way the interests of a related party of the association.

Marginal note:Prescribed transactions

424. An association may enter into a transaction with a related party of the association if the transaction is a prescribed transaction or one of a class of prescribed transactions.

Marginal note:Market terms and conditions

• 425. (1) Except as provided in subsections 420(4) and (5), any transaction entered into with a related party of the association shall be on terms and conditions that are at least as favourable to the association as market terms and conditions.

• Meaning of “market terms and conditions”

  (2) For the purposes of subsection (1), “market terms and conditions” means

  • (a) in respect of a service or a loan facility or a deposit facility offered to the public by the association in the ordinary course of business, terms and conditions that are no more or less favourable than those offered to the public by the association in the ordinary course of business; and

  • (b) in respect of any other transaction,

    • (i) terms and conditions, including those relating to price, rent or interest rate, that might reasonably be expected to apply in a similar transaction in an open market under conditions requisite to a fair transaction between parties who are at arm’s length and who are acting prudently, knowledgeably and willingly, or

    • (ii) if the transaction is one that would not reasonably be expected to occur in an open market between parties who are at arm’s length, terms and conditions, including those relating to price, rent or interest rate, that would reasonably be expected to provide the association with fair value, having regard to all the circumstances of the transaction, and that would be consistent with the parties to the transaction acting prudently, knowledgeably and willingly.