Canada Cooperatives Regulations (SOR/99-256)

• 47 (1) If a constrained share cooperative has sent a further written notice referred to in subsection 46(3) and has not sold, under subsection 131(1) of the Act, any share in respect of which the notice was sent, and if the cooperative changes its conclusion referred to in paragraph 46(3)(a) or its directors change their determination referred to in paragraph 46(3)(b) or if there is a change in the reason for the conclusion or determination, the cooperative shall immediately send by registered mail to the recipient of that notice, a notice of the change to the conclusion, to the determination or to the reason for the conclusion or determination, including the reason for the change.

• (2) When a cooperative sends a notice under subsection (1), the cooperative shall, at the time the notice is sent, enter or cause to be entered in the securities register of the cooperative the particulars of the notice, including the date on which it was sent.

• 48 (1) No investment share shall be sold by a constrained share cooperative under subsection 131(1) of the Act unless

  • (a) the cooperative has sent the notices referred to in subsections 46(1) and (3) to the person shown in the securities register of the cooperative as the holder of the investment share;

  • (b) not less than 150 days but not more than 300 days have elapsed from the day on which the notice referred to in subsection 46(1) was sent to the holder of the investment share;

  • (c) not less than 60 days but not more than 150 days have elapsed from the day on which the notice referred to in subsection 46(3) was sent to the holder of the investment share;

  • (d) the cooperative has concluded that the investment share is owned, or the directors of the cooperative have determined that the investment share may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 and, at the time of sale, the cooperative has no reasonable grounds on which to change its conclusion or the directors of the cooperative have no reasonable grounds on which to change their determination, as the case may be;

  • (e) the sale takes place

    • (i) on a stock exchange on which investment shares of the cooperative are listed and posted for trading, or

    • (ii) if investment shares of the cooperative are not listed and posted for trading on any stock exchange, in such a way as to obtain the best sale price available in the circumstances at the time of sale; and

  • (f) the cooperative sells the investment share with a view to obtaining the best sale price available in the circumstances at the time of sale.

• (2) No investment share in respect of which a notice is sent in accordance with subsection 46(1) shall be sold by a constrained share cooperative under subsection 131(1) of the Act if a transfer of the share is registered in the securities register of the cooperative after the notice was sent, unless the cooperative again complies with the requirements set out in this Part respecting the sale of the share.

• 49 (1) Immediately on a sale of investment shares by a constrained share cooperative under subsection 131(1) of the Act, the cooperative shall

  • (a) register the transfer or a notice of the sale of the shares or cause the transfer or a notice of the sale of the shares to be registered in the securities register of the cooperative; and

  • (b) send a notice of the sale to the person shown in the securities register of the cooperative as the holder of the shares at the time of the sale.

• (2) The notice referred to in paragraph (1)(b) shall

  • (a) state the number of investment shares sold;

  • (b) identify the certificate evidencing the investment shares sold, by certificate number or otherwise;

  • (c) state the date and manner of sale;

  • (d) state the manner in which the person entitled to receive the net proceeds of the sale under subsection 131(1) of the Act may obtain the proceeds;

  • (e) state that the cooperative has concluded that the investment shares were owned, or that the directors determined that the investment shares may be owned, contrary to a constraint referred to in paragraph (c) of the definition constraint in section 39 and state the reason why the cooperative so concluded or the directors so determined, as the case may be; and

  • (f) contain a statement, if not all of the investment shares of the holder evidenced by a certificate were sold, that not all of the shares were sold and that a certificate evidencing the investment shares that were not sold will be issued on surrender for cancellation of the certificate evidencing the investment shares sold.

50 The proceeds of a sale by a constrained share cooperative under subsection 131(1) of the Act must be invested in an interest bearing account in a body corporate any of whose deposits are insured by the Canada Deposit Insurance Corporation or guaranteed by the Quebec Deposit Insurance Board or by any other similar entity created by the laws of another province.

Disclosure of Beneficial Ownership

51 Section 52 applies to a constrained share cooperative that has provisions in its articles imposing a constraint referred to in paragraph (a) or (b) of the definition constraint in section 39.

• 52 (1) In order to ascertain the beneficial ownership of investment shares of a constrained share cooperative, its directors may

  • (a) require any person in whose name the investment shares are registered to furnish a statutory declaration under the Canada Evidence Act

    • (i) declaring whether

      • (A) the shareholder is the beneficial owner of the investment shares or holds them for a beneficial owner,

      • (B) the shareholder is an associate of any other shareholder, and

      • (C) the shareholder or beneficial owner is a Canadian, and

    • (ii) setting out any further relevant facts; and

  • (b) require any person seeking to have a transfer of a voting investment share registered in their name or to have a voting investment share issued to them to furnish a statutory declaration as described in paragraph (a).

• (2) When a person is required to furnish a declaration under subsection (1), the directors may refuse to register a transfer of a voting investment share in the person’s name or to issue a voting investment share to the person until that person has furnished the declaration.

• (3) In administering the constrained investment share provisions set out in the articles of a constrained share cooperative, the directors of the cooperative may rely on a statement made in a declaration referred to in subsection (1) or (2).

• (4) If the directors are required to determine the total number of voting investment shares of a constrained share cooperative that are held by or on behalf of residents of Canada, the directors may rely on the latest address shown in the investment share register to conclude

  • (a) in respect of an address that is in Canada, that an individual is a resident of Canada; and

  • (b) in the case of an address that is outside Canada, that an individual is not a resident of Canada.

• (5) For the purpose of subsection (4), the directors may only rely on the investment share register of the constrained share cooperative as of any date after the day on which the cooperative became a constrained share cooperative, but that date shall not be more than four months before the day on which the determination is made.

References and Definitions for the Purposes of Section 130 of the Act

• 53 (1) For the purpose of paragraph 130(1)(b) of the Act,

  • (a) the following laws of Canada or a province are prescribed:

    • (i) the Canadian Aviation Regulations made under the Aeronautics Act,

    • (ii) the Canada Transportation Act and any regulations made under it,

    • (iii) the Canada Oil and Gas Land Regulations and the Canada Oil and Gas Drilling and Production Regulations,

    • (iv) the Broadcasting Act,

    • (v) the Northern Mineral Exploration Assistance Regulations,

    • (vi) section 19 of the Income Tax Act,

    • (vii) the Securities Act (Ontario), R.S.O. 1990, c. S.5, and any regulations made under it, as amended from time to time,

    • (viii) the Securities Act (Quebec), CQRL c. V-1.1, and any regulations made under it, as amended from time to time, and

    • (ix) any other law of Canada that has requirements in relation to Canadian ownership, or any other law of a province, as amended from time to time, that has requirements in relation to Canadian ownership; and

  • (b) financial intermediary means a bank, a trust company, a loan company, an insurance company, an investment company, an association and a body corporate carrying on business as a securities broker, a dealer or an underwriter.

• (2) For the purpose of paragraph 130(1)(c) of the Act, the following laws of Canada are prescribed:

  • (a) the Canada Petroleum Resources Act and any regulations made under it; and

  • (b) the Canada Transportation Act and any regulations made under it.

• (3) For the purpose of paragraph 130(1)(d) of the Act, the following laws are prescribed:

  • (a) the Insurance Companies Act and any regulations made under it; and

  • (b) the Trust and Loan Companies Act and any regulations made under it.

• (4) For the purpose of subsection 131(1) and paragraph 183(5)(b) of the Act, the following laws are prescribed:

  • (a) the Insurance Companies Act and any regulations made under it;

  • (b) the Trust and Loan Companies Act and any regulations made under it; and

  • (c) the Income Tax Act and any regulations made under it.

PART 6Rules of Procedure for Applications for Exemptions

Application

54 This Part applies to every application for an exemption under subsection 4(4) or 167(1), section 248 or subsection 263(2) or 267(2) of the Act.

Time of Filing Applications

• 55 (1) An application for an exemption under

  • (a) subsection 4(4) of the Act may be made at any time;

  • (b) subsection 167(1) of the Act shall be made before the date of the notice referred to in subsection 165(1) of the Act;

  • (c) section 248 of the Act shall be made at least 60 days before the documents in respect of which the exemption is requested are to be sent to the Director;

  • (d) subsection 263(2) of the Act may be made at any time; and

  • (e) subsection 267(2) of the Act shall be made at least 30 days before the cooperative is required to comply with Part 8 of the Act.

• (2) Despite subsection (1), the Director shall extend the time for making an application for an exemption if the applicant establishes that no prejudice will result from the extension.

Notice by Director of Decision

56 The Director shall, within 30 days after receipt of an application for an exemption, grant the exemption requested or send to the applicant written notice of the refusal together with reasons for the refusal.

General

57 The Director may request that an applicant for an exemption furnish the Director with further information or that any other person furnish the Director with information in writing that is relevant to the application.