First Nations Fiscal Management Act Adaptation Regulations — 5
h unpaid loans to pay without delay amounts sufficient to replenish the debt reserve fund; and (b) if the balance is reduced by 50% or more of an amount determined in any manner prescribed by regulation, the Authority shall, in accordance with the regulations, require borrowing members with unpaid loans to pay without delay amounts sufficient to replenish the debt reserve fund. Repayment (6) Money contributed by a borrowing member to the debt reserve fund, and any investment income received on it, that has not already been repaid to the borrowing member by the Authority shall be repaid when all obligations in respect of the security for which the money was contributed have been satisfied. Credit enhancement fund 85 (1) The Authority shall establish a fund for the enhancement of the Authority’s credit rating. Investments (2) The funds of the credit enhancement fund may be invested only in securities, investments or deposits referred to in paragraph 82(3)(a), (c) or (d) that mature or are callable within five years, 25% of which must be callable within 90 days. Investment income (3) Investment income from the credit enhancement fund may be used (a) to temporarily offset any shortfalls in the debt reserve fund; (b) to defray the Authority’s costs of operation; and (c) for any other purpose prescribed by regulation. Capital (4) The capital of the credit enhancement fund may be used (a) to temporarily offset any shortfalls in the debt reserve fund; and (b) for any other purpose prescribed by regulation. Repayment to credit enhancement fund (5) Any funds that are paid from the credit enhancement fund to offset a shortfall in the debt reserve fund shall be repaid by that debt reserve fund within 18 months after the day on which the funds are paid or, if more than one payment of funds is made, within 18 months after the day on which the first payment is made. After the expiry of that 18-month period, no further funds shall be paid from the credit enhancement fund to that debt reserve fund unless it has been fully replenished under section 84. Default 86 (1) If a borrowing member fails to make a payment to the Authority, to fulfil any other obligation under a borrowing agreement with the Authority or to pay a charge imposed by the Authority under this Part, the Authority shall (a) notify the borrowing member of the failure; and (b) send a notice of the failure to the First Nations Financial Management Board and the First Nations Tax Commission, together with evidence of the failure and a copy of any relevant documents and records. Requirement for report (2) If a failure referred to in subsection (1) relates to an obligation other than payment, the Authority may require that the First Nations Financial Management Board review and report on the reasons for the failure. Report (3) On receipt of a notice referred to in paragraph (1)(b) in respect of a failure related to an obligation other than payment, the First Nations Financial Management Board shall advise the Authority in writing of its opinion on the reasons for the failure and recommend any intervention under section 52 or 53, in the case of an obligation relating to a loan secured by local revenues, or under section 52.1, 52.2, 53.1 or 53.2, in the case of an obligation relating to a loan secured by other revenues, that it considers appropriate. The Board must provide a copy of the report including its opinion and any recommendations to the First Nations Tax Commission. Required intervention (4) The Authority may, by notice in writing, require the First Nations Financial Management Board to either — at the Board’s discretion — impose a co-management arrangement on a borrowing member in respect of its local revenues or assume third-party management of its local revenues (a) if, with respect to a loan secured by local revenues, the borrowing member fails to make a payment to the Authority under a borrowing agreement with the Authority, or to pay a charge imposed by the Authority unde