Investments in Associations and Cooperatively-owned Entities Regulations

The Investments in Associations and Cooperatively-owned Entities Regulations, made under the Cooperative Credit Associations Act, regulate investments made by associations and cooperatively-owned entities. The regulations aim to ensure that these entities maintain a level of control over their investments and do not accumulate excessive risk.

Key aspects of the regulations include:

• Definitions: The regulations establish specific definitions for terms such as "designated entity," "value," and "control."


• Non-application: Subsection 390(4) of the Act does not apply to associations' acquisitions or increases of substantial investments in designated entities, except those controlled by another association.


• Loss of control - rights and obligations: If a designated entity ceases to be controlled by another association, the association that has acquired or increased a substantial investment must notify the Superintendent and take steps to divest itself within two years if the total value exceeds 50% of its regulatory capital.


• Loss of group control - rights and obligations: If an entity referred to in paragraph 390(1)(a) of the Act ceases to be controlled by a group of associations, the association must notify the Superintendent and take steps to divest itself within two years if the total value exceeds 50% of its regulatory capital.


• Meaning of "control": A designated entity is deemed to be controlled by a group of associations if other associations beneficially own securities in such a number that would control the entity if they were one association.


• Limitation: References to substantial investments are excluded from certain types of transactions, such as those made under regulations or by central cooperative credit societies.