Regulatory Capital
14. (1) The regulatory capital of a credit union is the amount represented by “C” in the formula,  in which “A” is the amount determined under subsection (2) and “B” is the amount determined under subsection (3). O. Reg. 76/95, s. 14 (1). (2) Subject to subsection (4), “A” is the sum of the following items as they would appear in financial statements of the credit union prepared as of the date of the calculation: 1. The amount of the members’ equity and shareholders’ equity. 2. The amount of any minority interests. 3. The amount of subordinated indebtedness. 4. The amount of any loan loss allowance or other amount permitted to be included in the credit union’s regulatory capital under the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires. O. Reg. 76/95, s. 14 (2); O. Reg. 314/98, s. 7 (1); O. Reg. 560/06, s. 5 (1). (3) Subject to subsection (4), “B” is the sum of the following items as they would appear in financial statements of the credit union prepared as of the date of the calculation: 1. The amount of goodwill and other intangible assets. 2. The amount of the shareholders’ equity and the subordinated indebtedness of a financial institution controlled by the credit union or of an entity controlled by such a financial institution. 3. The amount of other investments made by the credit union or by a subsidiary of the credit union, i. in a financial institution that is a subsidiary of the credit union, or ii. in a subsidiary of the financial institution, if the investments form part of the capital of the financial institution, as the financial institution’s capital is determined under the laws of the jurisdiction in which the financial institution is incorporated. 4. The amount of other loans made by the credit union or by a subsidiary of the credit union other than a subsidiary that is a financial institution, i. to an insurance company that is a subsidiary of the credit union, or ii. to a securities dealer that is a subsidiary of the credit union, if the loans form part of the capital of the insurance company or securities dealer. 5. The amount of a minority interest in a financial institution that is a subsidiary of a credit union, or in a subsidiary of such a financial institution. 6. Any other amounts required to be included under the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires. O. Reg. 76/95, s. 14 (3); O. Reg. 314/98, s. 7 (2); O. Reg. 560/06, s. 5 (2, 3). (4) An amount respecting a security may be included in the calculation of regulatory capital only in the following circumstances: 1. The security is, by its terms, subordinate in right of payment to all liabilities of the entity that issued it, other than those liabilities that, by their terms, rank equally with or are subordinate to the security. 2. The security is issued and is paid for. 3. The security, if it is subordinated indebtedness or a share, i. has an initial minimum term of five years or more or has no term, and ii. cannot be redeemed or purchased for cancellation in the first five years after it is issued. O. Reg. 76/95, s. 14 (4). (5) Subparagraph ii of paragraph 3 of subsection (4) does not apply if the Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires permits the security to be redeemed or purchased for cancellation within the first five years after it is issued. O. Reg. 76/95, s. 14 (5); O. Reg. 314/98, s. 7 (3); O. Reg. 560/06, s. 5 (4). (6) In this section, “minority interest” means an equity interest in a subsidiary of a credit union that is held by a person other than the credit union or a subsidiary of the credit union. O. Reg. 76/95, s. 14 (6). Risk Weighted Assets of a Credit Union