Regulatory capital
 17. (1) The regulatory capital of a credit union is the amount calculated using the formula, C + D in which, “C” is the amount of the credit union’s Tier 1 Capital as determined under subsection (2), and “D” is the amount of the credit union’s Tier 2 Capital as determined under subsection (3). O. Reg. 237/09, s. 17 (1). (2) The Tier 1 capital of a credit union is the amount calculated using the formula, E – B in which, “E” is the sum of the following amounts as they would appear in the financial statements of the credit union, if the financial statements were prepared as of the date of the calculation: 1. Membership shares. 2. Retained earnings. 3. Contributed surplus. 4. Patronage shares, other than patronage shares that are redeemable within the following 12-month period. 5. Qualifying shares described in subsection (4), other than qualifying shares that are redeemable within the following 12-month period. 6. Accumulated net after tax unrealized loss on available-for-sale equity securities reported in Other Comprehensive Income. “B” has the same meaning as in subsection 16 (1). O. Reg. 237/09, s. 17 (2); O. Reg. 514/10, s. 3 (1). (3) The Tier 2 Capital of a credit union is the lesser of the Tier 1 Capital amount determined under subsection (2) and the sum of the following amounts as they would appear in the financial statements of the credit union, if the financial statements were prepared as of the date of the calculation: 1. Patronage shares that are redeemable within the following 12-month period. 2. Fully paid shares issued by the credit union, excluding membership shares, patronage shares and the qualifying shares that are included in the definition of “E” in subsection (2). 3. Subordinated indebtedness that, i. cannot be redeemed or purchased for cancellation in the first five years after it is issued, and ii. is not convertible into or exchangeable for a security other than a qualifying share. 4. The amount of any loan loss allowance, not including an individual loan loss allowance, up to a maximum of 1.25 per cent of the risk weighted assets of the credit union. 5. Accumulated net after tax unrealized gain on available-for-sale equity securities reported in Other Comprehensive Income. 6. Any other amount set out in the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires.  O. Reg. 237/09, s. 17 (3); O. Reg. 514/10, s. 3 (2-4); O. Reg. 68/17, s. 5. (4) For the purposes of paragraph 5 of the definition of “E” in subsection (2), qualifying shares are fully paid shares other than membership shares and patronage shares issued by the credit union, but only if all of the following conditions are met: 1. Any rights or special rights as to the payment of dividends to the holders of the shares are non-cumulative. 2. Any rights or special rights, including the right to redeem the shares or call on the credit union to purchase or otherwise acquire the shares, are restricted so that the credit union is not required to redeem, purchase or otherwise acquire the shares of that class at a rate of more than 10 per cent of the outstanding shares during any one-year period. 3. Shares issued after this paragraph comes into force cannot be redeemed or purchased for cancellation in the first five years after their issue, except upon the death or expulsion from the credit union of the holder. 4. The shares do not give their holders the right to convert the shares into, or exchange the shares for, shares of any class of shares other than a class of shares described in paragraph 1, 2 or 3 that are issued to raise capital.  O. Reg. 237/09, s. 17 (4); O. Reg. 514/10, s. 3 (5).