O. Reg. 181/19: GENERAL
filed June 6, 2019 under Credit Unions and Caisses Populaires Act, 1994, S.O. 1994, c. 11
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made under the
Credit Unions and Caisses Populaires Act, 1994
Made: June 6, 2019
Filed: June 6, 2019
Published on e-Laws: June 7, 2019
Printed in The Ontario Gazette: June 22, 2019
Amending O. Reg. 237/09
(GENERAL)
1. The definition of “Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires” in subsection 1 (1) of Ontario Regulation 237/09 is amended by striking out “the Corporation” and substituting “the Authority”.
2. Section 9 of the Regulation is amended by striking out “the Corporation” at the end and substituting “the Authority”.
3. Paragraph 6 of section 10 of the Regulation is amended by striking out “the Corporation” and substituting “the Authority”.
4. (1) Paragraph 22 of subsection 11 (1) of the Regulation is amended by striking out “the Superintendent” and substituting “the Chief Executive Officer”.
(2) Paragraph 2 of subsection 11 (5) of the Regulation is amended by striking out “the Deposit Insurance Corporation of Ontario” and substituting “the Financial Services Regulatory Authority of Ontario”.
5. (1) Subsection 12 (1) of the Regulation is amended by striking out “the Superintendent” and substituting “the Chief Executive Officer”.
(2) Paragraph 2 of subsection 12 (3) of the Regulation is revoked and the following substituted:
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) Paragraph 3 of subsection 12 (3) of the Regulation is amended by striking out “The Superintendent” and substituting “The Chief Executive Officer”.
6. Section 14 of the Regulation is amended by striking out “the Corporation” and substituting “the Authority”.
7. (1) Paragraphs 10 and 11 of subsection 18 (2) of the Regulation are revoked and the following substituted:
10. Deposits in a league, Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
11. Interest rate contracts with a league, Central 1 Credit Union, Fédération des caisses Desjardins du Québec, a financial institution or another equivalent entity approved in writing by the Chief Executive Officer.
(2) Subsection 18 (9) of the Regulation is amended by striking out “the Corporation” in the portion before the equation and substituting “the Chief Executive Officer”.
(3) Subsection 18 (11) of the Regulation is amended by striking out “the Corporation” in the portion before the equation and substituting “the Chief Executive Officer”.
8. Subsection 19 (2) of the Regulation is amended by striking out “the Corporation” in the portion before paragraph 1 and substituting “the Chief Executive Officer”.
9. Section 22 of the Regulation is amended by striking out “the Corporation” at the end and substituting “the Authority”.
10. Paragraph 2 of subsection 23 (1) of the Regulation is amended by striking out “to the Superintendent and to the Corporation” in the portion before subparagraph i and substituting “to the Chief Executive Officer”.
11. Paragraph 13 of subsection 27 (1) of the Regulation is amended by striking out “by the Superintendent or the Corporation” and substituting “by the Chief Executive Officer”.
12. Paragraph 2 of section 30 of the Regulation is amended by striking out “by the Superintendent and the Corporation” and substituting “by the Chief Executive Officer”.
13. (1) Paragraph 2 of subsection 34 (1) of the Regulation is revoked and the following substituted:
2. The Authority.
(2) Paragraph 5 of subsection 34 (1) of the Regulation is revoked and the following substituted:
5. Fédération des caisses Desjardins du Québec.
(3) Subsection 34 (2) of the Regulation is amended by striking out “the Corporation” and substituting “the Authority”.
14. Clause 43 (4) (b) of the Regulation is amended by striking out “the Superintendent” and substituting “the Chief Executive Officer”.
15. (1) Subparagraph 2 iii of subsection 48 (3) of the Regulation is revoked and the following substituted:
iii. a league, Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
(2) Subsections 48 (4) and (5) of the Regulation are revoked and the following substituted:
(4) A credit union may create a general security interest in property of the credit union, except property required to satisfy the requirements of adequate liquidity under section 84 of the Act, if the following conditions are satisfied:
1. The debt is owed to a league, Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
2. The security agreement under which the security interest is granted provides that if the Chief Executive Officer orders the credit union to be subject to administration under section 294 of the Act or the Chief Executive Officer is appointed as liquidator of the assets of the credit union, the Chief Executive Officer may require that the security agreement be assigned to the Authority, if the Authority delivers one of the following to the secured party:
i. Payment in full of the outstanding balance, as of the close of business on the day of the assignment, of the indebtedness of the credit union secured by the agreement.
ii. A guarantee of payment for the outstanding balance, as of the close of business on the day of the assignment, of the indebtedness of the credit union secured by the agreement.
iii. Partial payment of the outstanding balance of the indebtedness of the credit union secured by the agreement and a guarantee of payment for the portion of the outstanding balance not paid as of the close of business on the day of the assignment.
3. The security agreement under which the security interest is granted provides that despite paragraph 2, if,
i. the security interest granted by the credit union forms part of the collateral security granted or assigned by Central 1 Credit Union to the Bank of Canada as security for an emergency liquidity assistance facility from the Bank of Canada, and
ii. the Chief Executive Officer orders the credit union to be subject to administration under section 294 of the Act or the Chief Executive Officer is appointed liquidator of the assets of the credit union,
the Chief Executive Officer may require the security agreement be assigned to the Authority only if the Authority delivers to the Bank of Canada payment in full of the outstanding balance of the indebtedness of the credit union secured by the agreement.
(5) A guarantee of payment made under subparagraph ii or iii of paragraph 2 of subsection (4) must provide the following:
1. The Authority shall pay the outstanding balance of the indebtedness, including interest at the interest rate provided for in the debt instrument that forms a part of the security agreement prior to any default under that instrument, by the fifth anniversary of the guarantee, or such earlier date as the Chief Executive Officer may designate.
2. The secured party is not required to exhaust its right to recourse against the credit union or any other person before being entitled to payment or performance by the Authority under the guarantee.
3. The obligations of the Authority under the guarantee are continuing, unconditional and absolute, and will not be released, discharged, diminished, limited or otherwise affected by a change affecting the credit union.
(3) Subsection 48 (6) of the Regulation is amended by striking out “the Corporation” and substituting “the Authority”.
(4) Subsection 48 (7) of the Regulation is revoked.
16. (1) Paragraphs 3, 4, 5 and 6 of subsection 52 (1) of the Regulation are revoked and the following substituted:
3. A loan that consists of deposits made by the credit union with a financial institution, Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
4. A loan that is fully secured by a deposit with,
i. a financial institution, including the credit union making the loan, or
ii. Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
5. A loan that is fully secured by debt obligations that are guaranteed by,
i. a financial institution other than the credit union making the loan, or
ii. Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
6. A loan that is fully secured by a guarantee of,
i. a financial institution other than the credit union making the loan, or
ii. Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
(2) Paragraph 10 of subsection 52 (1) of the Regulation is revoked and the following substituted:
10. An investment in a debt obligation issued by a league, Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
(3) Paragraph 14 of subsection 52 (1) of the Regulation is revoked and the following substituted:
14. An investment in shares of a league, Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
17. Subparagraph 2 v and sub-subparagraph 3 iii E of section 56 of the Regulation are revoked.
18. Subparagraph 2 iv of section 56.1 of the Regulation is revoked.
19. Subclause 58 (5) (b) (iii) of the Regulation is revoked and the following substituted:
(iii) the Authority; or
20. Subsection 62 (4) of the Regulation is amended by striking out “the Corporation” at the end and substituting “the Chief Executive Officer”.
21. Clause 64 (2) (b) of the Regulation is amended by striking out “the Corporation” and substituting “the Chief Executive Officer”.
22. Paragraph 2 of section 66 of the Regulation is revoked and the following substituted:
2. Central 1 Credit Union or Fédération des caisses Desjardins du Québec.
23. Subsection 71 (4) of the Regulation is amended by striking out “the Corporation” and substituting “the Chief Executive Officer”.
24. Subsection 72 (2) of the Regulation is amended by striking out “the Corporation” and substituting “the Chief Executive Officer”.
25. Subsection 73 (2) of the Regulation is amended by striking out “the Corporation” at the end and substituting “the Chief Executive Officer”.
26. Subsection 78 (2) of the Regulation is amended by striking out “the Superintendent” at the end and substituting “the Chief Executive Officer”.
27. Paragraph 3 of section 88 of the Regulation is revoked and the following substituted:
3. The Authority.
28. The heading to Part XIV of the Regulation is revoked and the following substituted:
PART XIV
Deposit Insurance
29. Sections 101 and 102 of the Regulation are revoked.
30. Section 104 of the Regulation is amended by striking out “the Corporation” in the portion before clause (a) and substituting “the Authority”.
31. (1) Subsection 105 (1) of the Regulation is amended by striking out “the Corporation” and substituting “the Authority”.
(2) Subsection 105 (2) of the Regulation is revoked and the following substituted:
(2) The Authority shall determine the differential premium score of each credit union and league in accordance with subsection (4.3) and with the rules set out in the Differential Premium Score Determination published by the Authority in The Ontario Gazette, as it may be amended from time to time.
(3) Paragraph 2 of subsection 105 (4.3) of the Regulation is revoked and the following substituted:
2. Corporate governance: the effectiveness of the governance practices of the credit union or league, as determined with reference to the Act and the Authority rules or by-laws.
(4) Subsection 105 (4.4) of the Regulation is amended by adding “but before January 1, 2020” after “on or after January 1, 2015” in the portion before paragraph 1.
(5) Section 105 of the Regulation is amended by adding the following subsection:
(4.5) The annual premium payable by a credit union or league for a financial year that begins on or after January 1, 2020 is calculated as follows:
1. If the differential premium score of a credit union or league is 90 or over, its annual premium is $0.75 per $1,000 of the funds described in subsection (5) for a credit union and in subsection (6) for a league.
2. If the differential premium score of a credit union or league is 0, its annual premium is $2.25 per $1,000 of those funds.
3. If the differential premium score of a credit union or league is between 0 and 90, its annual premium is the rate per $1,000 of those funds calculated using the formula,
A = 0.75($1.75 – (B / 90 × $0.75))
in which,
“A” is the rate, and
“B” is the credit union or league’s differential premium score.
(6) Subsection 105 (7) of the Regulation is amended by striking out “The Corporation” at the beginning and substituting “The Authority”.
(7) Subsection 105 (10) of the Regulation is amended by striking out “The Corporation” at the beginning and substituting “The Authority”.
32. Section 107 of the Regulation is amended by striking out “the Corporation” wherever it appears and substituting in each case “the Authority”.
33. Paragraphs 1 and 2 of section 109 of the Regulation are amended by striking out “the Superintendent” wherever it appears and substituting in each case “the Chief Executive Officer”.
34. Paragraphs 1, 2 and 3 of section 111 of the Regulation are amended by striking out “the Superintendent” wherever it appears and substituting in each case “the Chief Executive Officer”.
35. Paragraphs 1, 2 and 3 of section 112 of the Regulation are amended by striking out “the Superintendent” wherever it appears and substituting in each case “the Chief Executive Officer”.
36. (1) Subsection 116 (4) of the Regulation is amended by striking out “the Superintendent” at the end and substituting “the Chief Executive Officer”.
(2) Subsection 116 (5) of the Regulation is amended by striking out “the Superintendent” at the end and substituting “the Chief Executive Officer”.
37. (1) Subsection 117 (1) of the Regulation is amended by striking out “the Superintendent” and substituting “the Chief Executive Officer”.
(2) Subsection 117 (2) of the Regulation is revoked and the following substituted:
(2) If requested to do so by the Chief Executive Officer, the credit union shall give a copy of the Chief Executive Officer’s inquiry and the reply to each director of the credit union and the inquiry and reply shall form part of the minutes of the next board meeting.
38. (1) Subsection 118 (1) of the Regulation is amended by striking out “subsections 331.2 (1) and 331.3 (1)” and substituting “subsection 331.2 (1)”.
(2) Subsection 118 (2) of the Regulation is revoked and the following substituted:
(2) If the contravention is a failure to file a document or to provide information in accordance with subsection 331.2 (2) of the Act, the contravention occurs on the day following the day on which the document was required to be filed or the information was required to be provided and continues until it is filed or provided, as the case may be, or until the credit union is notified by the Chief Executive Officer or the Authority that the document or the information is no longer required.
(3) Subsection 118 (4) of the Regulation is revoked and the following substituted:
(4) If the contravention is a failure to hold a meeting in accordance with subsection 331.2 (2) of the Act, the contravention is deemed to occur on the third day following the day on which the meeting was required to be held and continues until the meeting is held or until the credit union is notified by the Chief Executive Officer that the meeting is no longer required.
(4) Subsection 118 (5) of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:
(5) In determining whether to impose an administrative penalty on a person or entity under section 331.2 of the Act for a purpose set out in subsection 331.1 (1) of the Act, the Chief Executive Officer shall consider only the following:
. . . . .
(5) Subsection 118 (6) of the Regulation is revoked and the following substituted:
(6) A person or entity on whom an administrative penalty has been imposed must pay the penalty,
(a) if the order is not appealed, within 30 days from the date of the order of the Chief Executive Officer imposing the penalty or such longer time as may be specified in the order; or
(b) if the order is appealed under subsection 331.2 (5) of the Act, within 30 days from the date the Tribunal confirms or varies the order or such longer time as may be specified in the order.
39. Section 119 of the Regulation is amended by striking out “the Superintendent” wherever it appears and substituting in each case “the Chief Executive Officer”.
40. Section 126 of the Regulation is amended by striking out “The Superintendent” at the beginning and substituting “The Chief Executive Officer”.
41. (1) Subsection 127 (1) of the Regulation is amended by striking out the portion before paragraph 1 and substituting the following:
Cancellation of registration, Chief Executive Officer’s order
(1) The Chief Executive Officer may make an order cancelling the registration of an extra-provincial credit union under subsection 332 (6) of the Act if, in the Chief Executive Officer’s opinion, one of the following conditions is satisfied:
. . . . .
(2) Subsection 127 (3) of the Regulation is amended by striking out “The Superintendent” at the beginning and substituting “The Chief Executive Officer”.
42. The Regulation is amended by adding the following section:
Transition
Transition
130. (1) In any document prepared in accordance with this Regulation prior to the day section 1 of Schedule 7 to the Plan for Care and Opportunity Act (Budget Measures), 2018 came into force, a statement or other provision that refers to the Superintendent or to the Corporation shall be deemed, for the purposes of this Regulation, to refer to the Chief Executive Officer or to the Authority, whichever is now required to satisfy the relevant provision in this Regulation.
(2) References in this Regulation to a form approved by, or acceptable to, the Chief Executive Officer are deemed to include the last such form approved by or deemed acceptable to the Superintendent prior to the day section 1 of Schedule 7 to the Plan for Care and Opportunity Act (Budget Measures), 2018 came into force until the Chief Executive Officer approves a subsequent form or deems it acceptable for the purposes of the relevant provision.
(3) References in this Regulation to a document published by the Chief Executive Officer or the Authority are deemed to include the last such document published by the Superintendent or the Corporation, as applicable, prior to the day section 1 of Schedule 7 to the Plan for Care and Opportunity Act (Budget Measures), 2018 came into force until the Chief Executive Officer or Authority publishes a subsequent document for the purposes of the relevant provision.
(4) An order, approval, inquiry, direction, determination, notice or report made or given by the Superintendent or the Corporation in accordance with this Regulation, as it read prior to the day section 1 of Schedule 7 to the Plan for Care and Opportunity Act (Budget Measures), 2018 came into force, is deemed to have been made or given by the Chief Executive Officer or the Authority, whichever is now required to satisfy the relevant provision in this Regulation.
(5) Any notice, document or other information provided to the Superintendent or the Corporation under this Regulation, as it read prior to the day section 1 of Schedule 7 to the Plan for Care and Opportunity Act (Budget Measures), 2018 came into force, is deemed to have been provided to the Chief Executive Officer or the Authority, whichever is now required to satisfy the relevant provision in this Regulation.
(6) In this section,
“Corporation” means the Deposit Insurance Corporation of Ontario.
Commencement
43. This Regulation comes into force on the later of the day section 1 of Schedule 7 to the Plan for Care and Opportunity Act (Budget Measures), 2018 comes into force and the day this Regulation is filed.