jswizzle3737/ontario_laws_and_regs huggingface dataset:
Definitions
 1. (1) In this Regulation, “agricultural loan” means an agricultural loan described in section 64; (“prêt agricole”) “bridge loan” means a bridge loan described in section 65; (“prêt-relais”) “commercial loan” means a commercial loan described in section 66; (“prêt commercial”) “guarantee” includes the issuance of a letter of credit; (“garantie”) “institutional loan” means an institutional loan described in section 67; (“prêt institutionnel”) “insurer” means an insurer licensed under the Insurance Act; (“assureur”) “participating share” means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution; (“action participative”) “personal loan” means a personal loan described in section 68; (“prêt personnel”) “residential mortgage loan” means a residential mortgage loan described in section 69; (“prêt hypothécaire résidentiel”) “residential property” means an individual condominium residential unit or a building with one to four units where at least one half of the floor area of the building is utilized as one or more private residential dwellings; (“bien résidentiel”) “total assets” means total assets as determined in accordance with the Authority rules. (“actif total”) (2) For the purposes of this Regulation, a lodgement of title is not a mortgage. (3) For the purposes of this Regulation, two or more persons are connected if they satisfy the conditions prescribed in subsection 79 (3), or subsection 105 (2) in the case of a central.
Meaning of “material change”
 2. For the purposes of the Act and this Regulation, “material change” means, (a) a change in the business, operations, assets, liabilities or capital of a credit union that would reasonably be expected to have a significant effect on the financial position of the credit union or the value of any of the securities of the credit union, or (b) a decision to implement a change referred to in clause (a) made by the board of directors or other persons acting in a similar capacity or by senior management of the credit union who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable.
Widely distributed security
 3. (1) A security is widely distributed if, (a) it is listed or posted for trading on a recognized stock exchange; or (b) a prospectus relating to the issuance of the security is filed under the laws of a province or a jurisdiction outside Canada. (2) A debt obligation is widely distributed if no prospectus is required in respect of its distribution under the laws of a province or a jurisdiction outside Canada and either of the following two conditions is met: 1. At least 90 per cent of the maximum authorized principal of the debt obligation is held by one or more persons other than the credit union making the loan and its subsidiaries and, i. the debt obligation is issued to at least 25 persons other than the credit union and its subsidiaries within six months after the day on which the first of the debt obligations is issued, or ii. the debt obligations are issued on a continuous basis and there are, on average, at least 25 holders other than the credit union and its subsidiaries. 2. When the debt obligation is issued, it meets at least three of the following criteria: i. Its initial term is one year or less. ii. It is rated by a rating agency. iii. It is distributed through a person authorized to trade in securities. iv. It is distributed in accordance with an offering circular or memorandum or a similar document relating to the distribution of securities.
Bodies corporate
 4. (1) A factoring corporation is a body corporate that is restricted to acting as a factor in respect of accounts receivable, raising money for the purpose of acting as a factor and lending money while acting as a factor. (2) A financial leasing corporation is a body corporate that is restricted to, (a) engaging in financial leasing of personal property; (b) entering into and accepting assignments of conditional sales agreements in respect of personal property; (c) administering financial lease agreements and conditional sales agreements on behalf of a person; and (d) raising money for the purpose of financing its activities and investing the money until it is used for those activities. (3) An investment counselling and portfolio management corporation is a body corporate whose principal activities are either of the following: 1. Offering advice or advising about investments. 2. Investing or controlling money, property, deposits or securities that it does not own and that are not deposited with it in the ordinary course of business, which must involve the exercise of discretion and judgment. (4) A mutual fund corporation is a body corporate or entity restricted to investing its funds. It may also be a body corporate that issues securities entitling the holder to receive, on demand or within a specified period, an amount computed by reference to the value of a proportionate interest in all or part of its net assets (including a separate fund or a trust account). (5) A mutual fund distribution corporation is a body corporate whose principal activities are acting as an agent selling and collecting payment for interests in a mutual fund. Purchasers must be told about the existence of any sales commission or service fee before buying an interest in the mutual fund. The sales proceeds, less sales commissions and service fees, must be paid to the fund. (6) A securities dealer is a body corporate that trades in securities in the capacity of principal or agent. “Trade” has the same meaning as in the Securities Act. Part II   establishing a credit union
PART II ESTABLISHING A CREDIT UNION
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Minimum number of incorporators
 5. For the purposes of subsection 10 (1) of the Act, the minimum number of individuals required to incorporate a credit union is 20.
Articles of incorporation
 6. (1) The following information must be set out in the articles of incorporation of a credit union: 1. The name of the credit union. 2. The address of the credit union’s head office and the name of the municipality or township in Ontario where the credit union’s principal place of business is located. 3. The minimum and maximum number of directors. 4. The full name, date of birth, citizenship or permanent resident status and residential address of each director. 5. The classes and maximum number, if any, of shares other than membership shares that the credit union is authorized to issue. 6. The rights, privileges, restrictions and conditions, if any, attaching to each class of shares. 7. The board’s authority with respect to any class of shares that may be issued in series. (2) Articles filed when a credit union is first incorporated must also set out the full name, date of birth and residential address of each incorporator. (3) Articles approved by the Minister before March 1, 1995 shall be deemed to comply with subsections (1) and (2).
Name
 7. Central 1 Credit Union, Canadian Credit Union Association and an extra-provincial credit union registered under clause 273 (6) (a) of the Act are prescribed persons for the purposes of section 18 of the Act.
Financial years
 8. (1) For the purposes of section 27 of the Act, the financial year of a credit union must end on December 31. (2) The following apply if, on the day this section comes into force, a credit union’s financial year ends on a date other than December 31: 1. The credit union’s financial year need not be changed. 2. If the credit union’s financial year is changed, it must be changed so that it ends on December 31. (3) Subsection (2) does not apply to a credit union formed by the amalgamation of two or more credit unions after the day this section comes into force; in such a case, the financial year of the amalgamated credit union must end on December 31. Part III   Membership
PART III MEMBERSHIP
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Payments re deceased members
 9. (1) For the purposes of paragraph 1 of subsection 38 (2) of the Act, the prescribed amount is $50,000. (2) For the purposes of paragraph 2 of subsection 38 (2) of the Act, the prescribed amount is $50,000. part IV   Capital STructure
PART IV CAPITAL STRUCTURE
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Number of shares
 10. Despite any limit set out in the by-laws of a credit union, the limit on the number of membership shares that may be issued to a member of the credit union is the sum of, (a) the minimum number of membership shares required under the by-laws of the credit union; and (b) the number of membership shares that would be issued by the credit union for an additional consideration of $1,000, as determined at the time the membership shares are issued.
Disclosure re insurance of membership shares
 11. Prior to issuing any membership share, a credit union shall disclose to the member that membership shares are not insured by the Authority.
Membership share certificate
 12. For the purposes of subsection 44 (4) of the Act, a membership share certificate must include the following information and statements on its face: 1. The name of the credit union as it appears in the articles. 2. The name of each person to whom the certificate is issued. 3. A statement indicating that the credit union is governed by the Credit Unions and Caisses Populaires Act, 2020. 4. A statement indicating that the certificate represents membership shares in the credit union and indicating the number of shares. 5. A statement indicating that there may be a lien on the shares in favour of the credit union for indebtedness to it. 6. A statement indicating that the shares are not guaranteed or insured by the Authority or another public agency. 7. A statement indicating that the certificate is not transferable.
Copy of offering statement
 14. A credit union shall inform prospective purchasers in writing of their right under subsection 74 (2) of the Act to request and receive a copy of the offering statement.
Notice of offering
 15. (1) A credit union may give any person or entity a notice respecting an offering after the offering statement is filed and before the Chief Executive Officer issues a receipt. (2) The notice must contain the following information: 1. A detailed description of the security that the credit union proposes to issue. 2. The price of the security, if the price has been determined. 3. The name and address of a person from whom the securities may be purchased. (3) The notice must include the following statements in conspicuous, bold type on the front cover, in the same language as is used in the offering statement: 1. This is not an offer to sell the securities described in this document. 2. The securities described in this document cannot be sold until after the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario issues a receipt for an offering statement. You are advised to read the offering statement approved by the Chief Executive Officer, because the terms and conditions may be changed significantly. 3. The Chief Executive Officer may refuse to issue a receipt, in which case the securities described in this document will not be offered for sale.
Application for receipt for offering statement
 16. An application for a receipt for an offering statement must include a document that cross-references the particulars of the securities to be issued with specific terms and conditions of the credit union’s articles.
Application for renewal of receipt
 17. (1) An application for a renewal of a receipt for an offering statement must include a comparison statement that cross-references any changes in the offering statement. (2) The comparison statement described in subsection (1) must be signed by the following individuals: 1. The chair of the board of the credit union. 2. The chief financial officer of the credit union, or if there is no chief financial officer, an officer of the credit union. 3. The chief executive officer of the credit union.
Statement of material change
 18. The following information must be set out in a statement of material change respecting an offering statement by a credit union: 1. The name of the credit union. 2. The date on which the receipt for the offering statement was issued. 3. The date on which the material change occurred. 4. A description of the material change.
Transfer of securities issued after receipt for an offering statement
 19. For the purposes of subsection 67 (1) of the Act, the Authority and a central are prescribed as persons to whom a security issued under circumstances described in clause 68 (1) (a) of the Act may be transferred. PART V   Capital and Liquidity
PART V CAPITAL AND LIQUIDITY
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Adequate capital
 20. (1) For the purposes of maintaining adequate capital as required under section 77 of the Act, a credit union must satisfy the following conditions: 1. It must maintain a leverage ratio of at least 3 per cent. 2. It must maintain a total capital ratio of at least 8 per cent. (2) For the purposes of this section, “leverage ratio” and “total capital ratio” have the same meaning as in the Authority rules and shall be determined in accordance with the Authority rules. PART VI   governing a credit union Directors
PART VI GOVERNING A CREDIT UNION
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Directors
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Election of board
 21. (1) The by-laws of a credit union may provide for the election and retirement of directors in rotation. (2) A member who votes at an election of directors shall cast a number of votes less than or equal to the number of directors to be elected but the member may not cast more than one vote for one candidate.
Directors
 22. (1) If an election is not held within the period set out in the by-laws of a credit union, the directors continue in office until their successors are elected. (2) Each of the persons named as first directors in the articles is a director until replaced by a person duly elected or appointed in the first director’s stead. (3) The by-laws of a credit union shall provide for a maximum number of consecutive terms for directors.
Chair
 23. (1) The chair of the board shall hold office for such term as the by-laws of a credit union provide. (2) The by-laws of a credit union shall provide for a maximum number of consecutive terms for the chair of the board.
Vacancies
 24. (1) If a vacancy occurs in the board and a quorum of directors remains, the directors remaining in office may appoint a qualified individual to fill the vacancy until the next annual meeting of the members of the credit union. (2) If there is not a quorum of directors in office, the remaining directors shall promptly call a general meeting of the members to fill the vacancy; in default of this or if there are no remaining directors, any member may call the meeting.
Ceasing to hold office
 25. (1) A director ceases to hold office, (a) at the end of the annual meeting at which the director’s term of office expires or upon the election of a successor; (b) when the director dies or resigns; (c) when the director becomes ineligible to hold office under section 29 of this Regulation or section 83 of the Act; (d) when the director is removed from office under section 26 of this Regulation or section 94 of the Act; (e) in the circumstances described in section 27 of this Regulation; or (f) when the Chief Executive Officer replaces the board and appoints a person to assume the powers of the board under subsection 234 (1) of the Act. (2) A director’s resignation becomes effective when the credit union receives the director’s written resignation or at the time specified in the resignation, whichever is later. (3) The credit union shall notify the Chief Executive Officer if, after a director ceases to hold office, there is not a quorum of directors in office.
Removal by board
 26. If a director fails to attend three consecutive board meetings without, in the opinion of the board, reasonable cause, or fails to perform any of the duties allotted to the director as a director, the board may, by resolution, declare the director’s position vacant.
Circumstances for removal by members
 27. (1) The members of a credit union may remove a director before the director’s term of office expires. (2) A director is removed from office by a special resolution passed at a general meeting of the members duly called for that purpose. (3) The notice calling the meeting must state that the purpose of the meeting is to remove the director named in the notice. (4) At the meeting, the director is entitled to speak to the resolution calling for the director’s removal and may do so personally or through a person authorized under the Law Society Act to represent the director. (5) If the members remove the director from office, they shall elect another director at the same meeting to hold office in the removed director’s stead for the remainder of the removed director’s term of office.
Statement on resignation
 28. (1) A director who resigns is entitled to give the credit union a written statement setting out the director’s reasons for resigning. (2) The Chief Executive Officer may require the director to provide such information relating to the resignation as the Chief Executive Officer specifies and the director shall promptly do so. (3) If a director resigns as a result of a disagreement with the other directors or the officers of a credit union, the director shall give the credit union and the Chief Executive Officer a written statement setting out the nature of the disagreement. (4) The credit union shall, within 30 days after receipt of the statement under subsection (3), advise every member that a copy of the statement is available on request. (5) The advising of the members under subsection (4) may be by deliveries permitted under subsection 276 (2) of the Act or by such other method as is provided for in the credit union’s by-laws. (6) The credit union shall give a copy of the statement to every member who requests it. (7) A credit union and a person acting on its behalf do not incur any liability by reason only of advising the members under subsection (4) or giving a copy of the statement to a member.
Disqualified individuals
 29. (1) For the purposes of section 84 of the Act, the following individuals are disqualified from being directors of a credit union: 1. One whose membership in any credit union has been terminated, other than voluntarily. 2. One who has been found under the Substitute Decisions Act, 1992 or under the Mental Health Act to be incapable of managing property or who has been found to be incapable by a court in Canada or elsewhere. 3. One who is an undischarged bankrupt or who has been discharged as a bankrupt in the five years preceding the date on which the individual may be elected as director. 4. One who is unable to obtain proof of bonding insurance that is satisfactory to the Chief Executive Officer. 5. One who is more than 90 days in arrears in the payment of a debt owed to the credit union, unless the credit union has agreed to extend the time for repayment. 6. One who is a listed person within the meaning of the United Nations Suppression of Terrorism Regulations under the United Nations Act (Canada). 7. One who has been convicted, in the five years preceding the date on which the individual may be elected as a director, of an offence described in subsection (3) and who has not received a pardon for the offence. 8. One whose membership in a professional association has been terminated, in the five years preceding the date on which the individual may be elected as director, for professional misconduct. 9. An employee of the credit union or a central in which the credit union is a member or the employee’s spouse, parent or child. 10. A professional advisor who provides services to the credit union in the individual’s professional capacity or who has provided such services in the three years preceding the date on which the individual may be elected as a director. 11. An employee, director or officer of the Authority. 12. A public servant employed under Part III of the Public Service of Ontario Act, 2006 whose employment duties include regulating credit unions. 13. One who has not met the training requirements or qualifications for directors established by the credit union. 14. One who has not met any reasonable condition or qualification set out in the by-laws of the credit union. (2) An individual is not an employee for the purposes of paragraph 9 of subsection (1) solely because the individual provides, without remuneration, services to the credit union or central that are ordinarily provided by an employee. (3) An offence referred to in paragraph 7 of subsection (1) is an offence that, (a) is related to the qualifications, functions or duties of a director of a body corporate; (b) involves theft or fraud; (c) involves a contravention of or failure to comply with the Act, a predecessor of the Act or an Act governing a subsidiary of the credit union; or (d) involves a contravention of or failure to comply with the Securities Act. Powers and Duties of a Board
Powers and Duties of a Board
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Mandatory by-laws
 30. The following matters are prescribed for the purposes of subsection 98 (2) of the Act as matters that the by-laws of a credit union shall provide for: 1. The allotment of shares, including the maximum number that may be allotted to a member, the payment for shares, the redemption or transfer of shares and the recording of information about these matters. 2. The procedure for deciding how to distribute the profits of the credit union. 3. The time, place and notice to be given for a members’ meeting, the record date for determining who is entitled to vote at such a meeting, and the quorum for such a meeting. 4. The time, place and notice to be given for a board meeting. 5. The manner of the election of directors to the board. 6. The term for which directors shall hold office. 7. The term for which the chair of the board shall hold office. 7.1 The manner in which a gender diversity report shall be made public. 8. All matters that are required to be included in the by-laws by the Act, regulations or Authority rules. O. Reg. 105/22, s. 30, 138.
Frequency of board meetings
 31. The board of a credit union shall meet at least quarterly during each financial year of the credit union.
Disclosure of expenses and remuneration
 32. For the purposes of subsection 177 (1) of the Act, a credit union’s annual audited financial statements must disclose the total expenses of the board and the total remuneration paid to the directors during the year.
Limitation on delegation to committees
 33. The following powers cannot be delegated to a committee of the board: 1. Filling vacancies on the board or the audit committee. 2. Appointing or removing an officer or director of the credit union. 3. Appointing signing officers. 4. Adopting, amending or repealing by-laws. 5. Issuing securities except in the manner and on the terms authorized by the board. 6. Authorizing the payment of a commission upon the sale of shares. 7. Purchasing, redeeming or otherwise acquiring shares issued by the credit union. 8. Approving the financial statements. 9. Authorizing the purchase, sale, lease, exchange or other disposition of material assets. 10. Declaring dividends or patronage returns. 11. Expelling a member.
Gender diversity report
 34. For the purposes of subsection 103 (2) of the Act, a gender diversity report must be made public in the manner provided for in the by-laws of the credit union. Audit Committees
Audit Committees
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Audit committee
 35. (1) The audit committee shall have at least three members. (2) A person ceases to be a member of the audit committee of a credit union when the person ceases to be a director or when the person resigns from the committee or is replaced by the board. (3) Every member of an audit committee shall satisfy such training requirements or qualifications for audit committee members as are established by the credit union. (4) The audit committee shall hold a meeting no less frequently than once every quarter during each year and meetings may be called by the credit union’s auditor, a member of the audit committee or any director. (5) A majority of the members of the audit committee constitutes a quorum. (6) The audit committee shall keep minutes of its meetings. (7) The audit committee shall report to the board within 60 days after each committee meeting, or at the next board meeting, whichever is earlier, setting out the results of the meeting.
Notification about certain matters
 37. (1) The audit committee shall promptly notify the board, the credit union’s auditor and the Chief Executive Officer if any of the following matters come to the attention of the committee: 1. Funds, securities or other property of the credit union have been or may have been misappropriated or misdirected. 2. The board, a director, an officer or an employee of the credit union has contravened or failed to comply with the Act, the regulations, the Authority rules or the by-laws of the credit union and the contravention or failure to comply materially affects the credit union. (2) Subject to the board’s approval, which shall not be unreasonably withheld, the committee may retain one or more persons to assist it in determining whether a misappropriation or misdirection has occurred. (3) The committee shall fix the remuneration payable to the persons retained under subsection (2) and the credit union shall pay it.
Power to call a board meeting
 38. The audit committee may call a meeting of the board to consider a matter of concern to the committee. Officers
Officers
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Officers
 39. (1) The directors shall elect or appoint a chair of the board from among themselves. (2) In addition to the chair of the board, a credit union must have a corporate secretary and a chief executive officer, and may have such other officers as are provided for in the by-laws. (3) The board may elect or appoint the corporate secretary from among the directors or may appoint an employee of the credit union as corporate secretary. (4) The corporate secretary shall ensure that the records of the by-laws of the credit union and the minutes of board meetings are kept up to date. (5) The chief executive officer of a credit union shall be an employee of the credit union appointed by the board.
Remuneration
 40. (1) Officers are entitled to receive such remuneration and other payments as the board approves. (2) A credit union’s annual audited financial statements must disclose the following information about the remuneration paid during a year to the officers and employees of a credit union with respect to each officer and employee of the credit union whose total remuneration for the year was over $175,000: 1. The name of the officer or employee. 2. The title of the officer or position of the employee. 3. The total amount of salary received. 4. The total amount of bonuses received. 5. The monetary value of benefits received. 6. The total amount of any other compensation paid, payable, awarded, granted or given, including taxable allowances, commissions and other similar amounts. (3) Despite subsection (1), if there are more than five officers and employees of a credit union whose total remuneration for the year was over $175,000, subsection (1) only applies in respect of the five officers and employees with the highest total remuneration for the year. (4) In this section, “total remuneration” means, in respect of an officer or employee for a year, the total of the amounts described in paragraphs 3 to 6 of subsection (2) received from the credit union or a subsidiary of the credit union for the year. Miscellaneous
Miscellaneous
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Rights of withdrawing member
 41. The by-laws of a credit union shall set out the rights of a withdrawing member, which shall include the right to receive payment for the member’s membership shares, subject to subsection 54 (3) of the Act, and the return of any money on deposit and property held by the credit union.
Member rights relating to expulsion
 42. (1) The by-laws of the credit union shall provide for the following rights: 1. The right of a member to receive advance notice of any meeting of the board at which the board will consider a resolution to expel the member. 2. The right of the member not to be expelled without being given an opportunity to appear at the meeting of the board to make submissions and to be represented at the meeting by a person authorized under the Law Society Act to represent the member. 3. The right of an expelled member to appeal the decision of the board at the next general meeting of the members. 4. The right of the expelled member to be reinstated as a member of the credit union if, at the next general meeting, the members, by a majority of the votes cast at the meeting, set aside the resolution of the board. 5. The right of the expelled member to receive payment for the member’s membership shares, subject to subsection 54 (3) of the Act, and the return of any money on deposit and property held by the credit union. (2) The by-laws of the credit union shall set out the following: 1. The procedures to be followed by the board to provide the advance notice referred to in paragraph 1 of subsection (1). 2. The procedures to be followed relating to the appeal referred to in paragraph 3 of subsection (1). (3) If the board passes a resolution expelling a member, the credit union shall, within five days after the resolution is passed, notify the member of the decision of the board by registered letter addressed to the member at the member’s last known address.
Bond for persons handling money
 43. (1) For the purposes of subsection 117 (2) of the Act, the minimum amount of the bond is the lesser of $5 million and the amount of the credit union’s total assets as shown on the audited financial statements of the credit union placed before the members at the most recent annual meeting. (2) For the purposes of subsection 117 (2) of the Act, the bond shall satisfy all of the following conditions: 1. The bond shall be issued by an insurer licensed under the Insurance Act to write surety and fidelity insurance to indemnify the credit union for any loss in respect of assets owned or held by the credit union arising out of a dishonest, fraudulent or criminal act of a director, an officer or an employee of the credit union. 2. The bond shall provide that the bond shall not be cancelled or terminated by the insurer or the insured until at least 30 days after the receipt by the Chief Executive Officer of a written notice from the insurer or the insured, as the case may be, of its intention to cancel or terminate the bond.
List of members and shareholders
 44. (1) A member of a credit union may inspect, at all reasonable hours, a list, extracted from the register under section 202 of the Act, of the names of the members and shareholders. (2) A list of members or shareholders obtained under this section shall not be used by any person except in connection with, (a) an effort to influence the voting of members or shareholders of the credit union; (b) an offer to acquire shares of the credit union; or (c) any other matter relating to the affairs of the credit union. Auditors
Auditors
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Appointment of auditor
 45. (1) At their first general meeting, the members of a credit union shall appoint an auditor to hold office until the close of the first annual meeting, but if the members fail to do so, the board shall promptly make the appointment. (2) At each annual meeting, the members of a credit union shall appoint an auditor to hold office until the close of the next annual meeting, but if the members fail to do so, the auditor in office continues in office until a successor is appointed. (3) In the event the office of auditor becomes vacant before the end of the incumbent auditor’s term of office, the board may appoint an auditor to hold office until the close of the next annual meeting. (4) If no auditor is appointed under subsection (1) or (2), the Chief Executive Officer may require the board to appoint an auditor to hold office until the close of the next annual meeting. (5) The credit union shall promptly notify the auditor, in writing, of the appointment.
Qualification as auditor
 46. (1) An individual or firm of accountants is qualified to be an auditor of a credit union if, (a) in the case of an individual, the person is an accountant who is, (i) licensed under the Public Accounting Act, 2004, (ii) ordinarily resident in Canada, and (iii) independent of the credit union; and (b) in the case of a firm of accountants, the member or employee of the firm jointly designated by the firm and the credit union to conduct the audit of the credit union on behalf of the firm is qualified in accordance with clause (a). (2) For purposes of subsection (1), (a) independence is a question of fact; and (b) a person is not independent of a credit union if, (i) that person, any partner of that person or any member of a firm of accountants of which that person is an employee, (A) is a director, an officer, a committee member or an employee of the credit union, a subsidiary of the credit union or the Authority, (B) is a business partner of any director, officer, committee member or employee of the credit union or a subsidiary of the credit union, (C) beneficially owns or controls, directly or indirectly, a material interest in the shares of a credit union or of any subsidiary of the credit union, or (D) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of the credit union or of any subsidiary of the credit union within the two years immediately preceding the person’s proposed appointment as an auditor of the credit union, other than a subsidiary of the credit union acquired pursuant to section 156 of the Act, or (ii) the firm of accountants of which that person is an employee, (A) beneficially owns or controls, directly or indirectly, a material interest in the shares of a credit union or of any subsidiary of the credit union, or (B) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of the credit union or of any subsidiary of the credit union within the two years immediately preceding the person’s proposed appointment as an auditor of the credit union, other than a subsidiary of the credit union acquired pursuant to section 156 of the Act. (3) In this section, “firm of accountants” means, (a) a partnership, the members of which are accountants engaged in the practice of accounting, or (b) a body corporate that is incorporated by or under an Act of the legislature of a province or territory and engaged in the practice of accounting.
Ineligibility as receiver
 47. The following persons are not eligible to be appointed as a receiver, a receiver and manager or a liquidator of a credit union: 1. A person who is or has been an auditor of the credit union within the two years preceding the proposed appointment. 2. A partner or employer of the person described in paragraph 1. 3. A person who is a spouse, child or parent of the person described in paragraph 1.
Replacement of auditor
 48. (1) A person, other than the incumbent auditor, is not eligible to be appointed as auditor unless, at least 15 days before the meeting at which the auditor is to be appointed, a member has given notice to the credit union of an intention to nominate the person for auditor. (2) The credit union shall send a copy of the member’s notice to the incumbent auditor and to the proposed nominee and shall notify the members of the credit union of the proposed nomination. (3) The incumbent auditor is entitled to give the credit union written representations concerning the proposal not to reappoint the auditor. (4) If the incumbent auditor gives the representations to the credit union at least three days before notice of the meeting is to be given, the credit union shall, at its own expense, forward a copy of the representations together with the notice of the meeting to each member entitled to receive the notice.
Removal of auditor
 49. (1) The members of a credit union may remove an auditor before the auditor’s term of office expires. (2) An auditor is removed from office by a resolution passed by a majority of the votes cast at a general meeting of members duly called for that purpose. (3) The credit union shall, at least 15 days before giving notice of the meeting, give the following material to the auditor before calling the general meeting: 1. Written notice of the intention to call the meeting and of the date on which the notice of the meeting is to be given. 2. A copy of all material proposed to be sent to members in connection with the meeting. (4) The auditor is entitled to give the credit union written representations concerning the proposal to remove the auditor. (5) If the auditor gives the representations to the credit union at least three days before notice of the meeting is to be given, the credit union shall, at its own expense, forward a copy of the representations together with the notice of the meeting to each member entitled to receive the notice. (6) If the members remove the auditor from office, they shall appoint another auditor at the same meeting to hold office for the remainder of the auditor’s term. (7) The auditor appointed under subsection (6) must be appointed by a resolution passed by a majority of the votes cast at the meeting. (8) For purposes of paragraph 2 of subsection (3), the material must include a report setting out the circumstances and the reasons for the removal of the auditor.
Report to Chief Executive Officer for certain purposes
 50. Within 10 days after the annual meeting, the auditor shall provide a copy of the audited financial statements and the auditor’s report to the Chief Executive Officer for the purpose of assisting the Chief Executive Officer and the Authority in carrying out their duties and powers under the Act, including, without limiting the generality of the foregoing, for the purposes of the following: 1. Determining whether conditions on the deposit insurance of the credit union should be imposed or amended under section 218 of the Act. 2. Determining whether the deposit insurance of the credit union should be cancelled under section 222 of the Act. 3. Determining the annual premium for the credit union under section 225 of the Act.
Duty at meetings
 51. If the auditor is present at a meeting of members or shareholders, the auditor shall answer inquiries directed to the auditor concerning the basis for the auditor’s report under section 135 of the Act.
Duty to report contravention, etc.
 52. (1) The auditor shall report on, (a) transactions of the credit union that, in the auditor’s opinion, have not been within the powers of the credit union; (b) loans made by the credit union to any person the aggregate amount of which exceeds one half of one per cent of the total assets of the credit union and in respect of which, in the auditor’s opinion, loss to the credit union is likely to occur; or (c) any circumstances that indicate that there may have been a contravention of the Act or the regulations. (2) If a report is made with respect to loans described in clause (1) (b), it is not necessary to report those loans again unless, in the opinion of the auditor, the amount of the loss likely to occur has increased. (3) If an auditor reports under this section, (a) the auditor shall transmit the report, in writing, to the chair of the board and to the audit committee; (b) the report shall be presented at the first meeting of directors following its receipt; (c) the report shall be incorporated in the minutes of that meeting; and (d) the auditor shall, at the time of transmitting the report pursuant to clause (a), provide the Chief Executive Officer with a copy of the report. Part VII   Business powers Ancillary Businesses
PART VII BUSINESS POWERS
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Ancillary Businesses
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Ancillary businesses
 53. For the purposes of subsection 139 (1) of the Act, a credit union may engage in the following trades or businesses: 1. Operating a post office. 2. Operating a motor vehicle licence bureau. 3. Acting as an agent to receive payments for utility bills, realty tax, personal income tax and for similar transactions. 4. Providing facsimile transmission facilities. 5. Promoting merchandise and services to its members or the holder of any payment, credit or charge card issued by the credit union, its subsidiaries or affiliates. 6. Engaging in the sale of, i. tickets, including lottery tickets, on a non-profit, public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest, ii. transit fares, and iii. tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government. Financial Services
Financial Services
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Prohibition re financial services
 54. For the purposes of subsection 139 (4) of the Act, a credit union shall not directly provide the following financial services: 1. Services provided by a factoring corporation described in subsection 4 (1). 2. Services provided by an investment counselling and portfolio management corporation described in subsection 4 (3). 3. Services provided by a mutual fund corporation described in subsection 4 (4). 4. Services provided by a mutual fund distribution corporation described in subsection 4 (5). 5. Services provided by a securities dealer described in subsection 4 (6).
Financial lease agreements and conditional sales agreements
 55. (1) For the purposes of subsection 139 (4) of the Act, a credit union or subsidiary must not enter into a financial lease agreement or a conditional sales agreement unless the agreement meets the following requirements: 1. The agreement concerns personal property, i. selected by the lessee or purchaser and acquired by the credit union or subsidiary at the request of the lessee or purchaser, or ii. previously acquired by the credit union or subsidiary under another financial lease agreement or conditional sales agreement. 2. The primary purpose of the agreement is to extend credit to the lessee or purchaser. 3. The agreement is for a fixed term. (2) A credit union or subsidiary must not direct a customer or prospective customer to particular dealers for the sale of personal property under a conditional sales agreement. (3) A financial lease agreement or conditional sales agreement must yield, (a) a reasonable rate of return; and (b) a return that at least equals the investment by the subsidiary in the property that is the subject of the agreement, taking into account in the case of a financial lease agreement, (i) rental charges payable or paid by the lessee, (ii) tax benefits to the credit union or subsidiary, and (iii) the guaranteed purchase or resale price, if any, for the property at the expiry of the agreement or the lesser of the estimated residual value of the property and 25 per cent of the original acquisition cost to the credit union or subsidiary. (4) The financial lease agreement or conditional sales agreement must set out the responsibilities of the credit union or its subsidiary respecting the benefit of the warranties, guarantees and undertakings made by the manufacturer or supplier of the property. (5) The aggregate estimated residual value of all property held by a credit union and its subsidiaries under financial lease agreements must not exceed 10 per cent of the aggregate original acquisition cost. (6) This section does not apply with respect to agreements in which the credit union or its subsidiary is the lessee or conditional purchaser. Networking
Networking
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Networking
 56. (1) Subject to sections 1 to 12 of Ontario Regulation 104/22 (Sale of Insurance), for the purposes of subsection 139 (5) of the Act, the following are the prescribed persons or entities in respect of which a credit union may act as agent: 1. A financial institution. 2. The Authority. 3. Central 1 Credit Union. 4. Fédération des caisses Desjardins du Québec. 5. A financial leasing corporation described in subsection 4 (2), whether or not it is a subsidiary of the credit union. 6. A mutual fund corporation described in subsection 4 (4), whether or not it is a subsidiary of the credit union. 7. A mutual fund distribution corporation described in subsection 4 (5), whether or not it is a subsidiary of the credit union. (2) A credit union may act as agent for the Authority only with respect to the administration of deposits under a deposit administration agreement. (3) For the purposes of subsection 139 (5) of the Act, a credit union may refer its members to a person or entity listed in paragraphs 1 to 7 of subsection (1) for the purpose of obtaining a syndicated loan within the meaning of section 70. Fiduciary Activities
Fiduciary Activities
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Fiduciary activities
 57. For the purposes of section 142 of the Act, the only fiduciary activity a credit union may undertake is acting as a trustee with respect to, (a) deposits under registered retirement savings plans, registered retirement income funds, registered education savings plans, registered disability savings plans, tax-free savings accounts and first home savings accounts under the Income Tax Act (Canada); (b) trust funds established under the Funeral, Burial and Cremation Services Act, 2002 or any other funds in respect of which a credit union is expressly permitted or required, under an Act or regulation, to act as a trustee; and (c) loan proceeds and security under loan participation agreements and syndication agreements. O. Reg. 105/22, s. 57; O. Reg. 111/23, s. 1. Guarantees
Guarantees
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Guarantees
 58. For the purposes of subsection 143 (3) of the Act, the following are the prescribed conditions and restrictions on a guarantee: 1. The guarantee must have a fixed term. 2. The credit union shall not guarantee an obligation, other than its own obligation or one of its subsidiary, unless the credit union has received security at least equal to the amount of the obligation guaranteed.
Limit on amount of guarantee
 59. For the purposes of subsection 143 (4) of the Act, the prescribed percentage is 10 per cent. Restriction on Borrowing from Another Credit Union
Restriction on Borrowing from Another Credit Union
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Restriction on borrowing from another credit union
 60. For the purposes of subsection 148 (2), no credit union shall borrow money from another credit union without the written approval of the Chief Executive Officer. Syndicated Loans
Syndicated Loans
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Syndicated loans
 61. For the purposes of clause 154 (1) (c) of the Act, a syndicated loan means a syndicated loan in Ontario within the meaning of section 70 of this Regulation, or a syndicated loan outside Ontario within the meaning of section 71 of this Regulation. Part viii   Investment and Lending Security Interests in Credit Union Property
PART VIII INVESTMENT AND LENDING
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Security Interests in Credit Union Property
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Classes of Loans
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Classes of loans
 63. The following are prescribed as classes of loans: 1. Agricultural loans. 2. Bridge loans. 3. Commercial loans. 4. Institutional loans. 5. Personal loans. 6. Residential mortgage loans. 7. Syndicated loans in Ontario. 8. Syndicated loans outside Ontario. 9. Loans to unincorporated associations.
Agricultural loan
 64. An agricultural loan is a loan that is made for the purposes of financing, (a) the production of cultivated or uncultivated field-grown crops; (b) the production of horticultural crops; (c) the raising of livestock, fish, poultry or fur-bearing animals; or (d) the production of eggs, milk, honey, maple syrup, tobacco, wood from woodlots or fibre or fodder crops.
Bridge loan
 65. A bridge loan is a loan to an individual made under the following circumstances: 1. The loan is for the purchase of residential property in which the purchaser will reside. 2. The term of the loan is not greater than 120 days. 3. The funds from the sale of another residential property owned by the individual will be used to repay the loan. 4. The credit union must receive a copy of the executed purchase and sale agreement for both properties before the loan is made. 5. The conditions of each of the purchase and sale agreements must be satisfied before the loan is made. 6. The loan is fully secured by a mortgage on the residential property being sold or, before the loan is made, the borrower’s solicitor has given the credit union an irrevocable letter of direction from the borrower stating that the funds from the sale of the residential property being sold will be remitted to the credit union.