Prospectus (Federal Credit Unions) Regulations — 6
Written disclosure before distribution 6 (1) Before a federal credit union enters into an agreement with one of its members respecting the distribution of its securities, it must provide that member with a disclosure document containing (a) on the first page, prominently displayed, (i) the statement “No official of the Government of Canada has considered the merits of the matters addressed in this disclosure”, (ii) a statement indicating that the securities are not eligible for deposit insurance coverage by the Canada Deposit Insurance Corporation, (iii) a statement indicating that the agreement is not binding on the member if the federal credit union receives written notice of the member’s intention not to be bound by the agreement not later than the second business day after the day on which the federal credit union provided the information required by this section, and (iv) a statement indicating that the security is not transferrable, except to another member; (b) the name, date of incorporation, and head office address of the federal credit union; (c) the name, municipality of residence and principal occupation of each of the federal credit union’s directors and senior officers, and the title of each senior officer; (d) the name and location of each transfer agent; (e) a brief description of the attributes of the securities being distributed; (f) a description of the risks associated with the securities being distributed; (g) a description of any business that the federal credit union or its subsidiaries, if any, carry on or intend to carry on; (h) details of the capital structure of the federal credit union; (i) details of the use to which the proceeds from the sale of the securities will be put; (j) details of any securities ranking ahead of the securities being distributed; (k) a description of any action, suit or other proceeding to which the federal credit union is a party; (l) a description of any material interest of a director, officer or employee of the federal credit union or any of its subsidiaries in the operations of the federal credit union, generally, or in the securities being distributed, including (i) details of any options to purchase securities of the federal credit union that are held by a director or officer, and the name of any director or officer who holds such options, and (ii) details of any options to purchase securities of the federal credit union that are held by an employee who is not a director or an officer, without naming the employee; (m) a description of every material contract entered into within the two-year period before the date of the distribution; (n) a description of the risk factors associated with the federal credit union; (o) an explanation of any substantial variations in the operating results of the federal credit union within the five-year period before the date of the distribution; (p) the amount of any dividends or patronage allocations paid, or distributions made, by the federal credit union within the five-year period before the date of the distribution; (q) the amount of any undeclared dividends on any shares with cumulative dividend rights; (r) the name and address of the federal credit union’s auditor and a statement indicating that copies of the federal credit union’s most recent interim and annual financial statements are available upon the member’s request; (s) details of the method of distributing the securities and of any commission payable or discount allowable on the distribution; (t) any other material fact; and (u) a statement indicating that the disclosure document constitutes full, true and plain disclosure of all material facts relating to the securities proposed to be distributed. Disclosure deemed provided (2) If the document is sent by mail, the federal credit union is deemed to have provided it five business days after the postmark date.