Regulatory Capital (Cooperative Credit Associations) Regulations

Regulatory Capital (Cooperative Credit Associations) Regulations:

These regulations define the regulatory capital of a cooperative credit association in Canada. The regulations come into effect on August 31, 1992, and are issued pursuant to the Cooperative Credit Associations Act.

The regulations clarify what constitutes regulatory capital for an association, which includes members' equity, shareholders' equity, minority interests, and subordinated indebtedness reported in the financial statements of the association prepared according to specific accounting principles and specifications. The amount of goodwill that would be included in those financial statements is excluded from regulatory capital.

The regulations also specify conditions under which a security can be included in the calculation of regulatory capital, such as being subordinate in right of payment to deposit liabilities and having an initial minimum term of five years or more. Furthermore, the regulations outline how the regulatory capital of an association is affected by certain investments, loans, and minority interests.

The regulations are intended to provide clarity and consistency in the calculation of regulatory capital for cooperative credit associations, ensuring that they maintain a stable and sound financial position.