Cooperative Credit Associations Act
419 (1) An association may enter into a transaction with a related party of the association if the transaction
(a) subject to subsection (2), consists of a written contract for the purchase by the association of services used in the ordinary course of business;
(a.1) in the case of a retail association, involves, subject to subsection (4), the provision of services, other than loans or guarantees, normally provided to the public by the association in the ordinary course of business;
(b) consists of a written contract with a financial institution or an entity in which the association is permitted to have a substantial investment pursuant to section 390 that is a related party of the association
(i) for the networking of any services provided by the association or the financial institution or entity, or
(ii) for the referral of any person by the association to the financial institution or entity, or for the referral of any person by the financial institution or entity to the association;
(c) consists of a written contract for such pension or benefit plans or their management or administration as are incidental to directorships or to the employment of officers or employees of the association or its subsidiaries; or
(d) involves the provision by the association of management, advisory, accounting, information processing or other services in relation to any business of the related party.
Marginal note:Order concerning management by employees
(2) Where an association has entered into a contract pursuant to paragraph (1)(a) and the contract, when taken together with all other such contracts entered into by the association, results in all or substantially all of the management functions of the association being exercised by persons who are not employees of the association, the Superintendent may, by order, if the Superintendent considers that result to be inappropriate, require the association, within such time as may be specified in the order, to take all steps necessary to ensure that management functions that are integral to the carrying on of business by the association are exercised by employees of the association to the extent specified in the order.
Marginal note:Service corporations
(3) Notwithstanding subsection 413(2), an association is deemed not to have indirectly entered into a transaction in respect of which this Part applies if the transaction is entered into by a service corporation, as defined in subsection 386(1), that is controlled by the association and the transaction is on terms and conditions at least as favourable to the association as market terms and conditions, as defined in subsection 425(2).
Marginal note:Loans or guarantees not included
(4) The provision of services, for the purposes of paragraph (1)(a.1), does not include the making of loans or guarantees.
- 1991, c. 48, s. 419
- 1997, c. 15, s. 152
- 2001, c. 9, s. 318
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