Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 389a, 396a and 463b of the Cooperative Credit Associations Actc, hereby makes the annexed Specialized Financing (Cooperative Credit Associations) Regulations.S.C. 2001, c. 9, s. 314S.C. 2001, c. 9, s. 339S.C. 1991, c. 48InterpretationDefinitionsThe following definitions apply in these Regulations.Act means the Cooperative Credit Associations Act. (Loi)balance sheet value, in respect of the shares and ownership interests held by an entity, means the value reported on its balance sheet on an unconsolidated basis. (valeur au bilan)book value [Repealed, SOR/2008-168, s. 9]specialized financing entity of the association means a specialized financing entity that is controlled by the association or in which the association has a substantial investment. (entité de l’association s’occupant de financement spécial)subsidiary, in respect of an association, does not include a subsidiary that is a specialized financing entity of the association. (filiale)Definition of specialized financing entityIn these Regulations and for the purpose of the definition specialized financing entity in subsection 386(1) of the Act, specialized financing entity means an entity that acquires or holds shares of, or ownership interests in, entities that a retail association may acquire control of, or hold, acquire or increase a substantial investment in, under subsection 388(4) of the Act.SOR/2008-168, s. 9; SOR/2010-71, s. 7(E)GeneralApplicationThese Regulations apply to the ownership by an association, other than a retail association, of shares of, or ownership interests in, a specialized financing entity under paragraph 390(2)(b) of the Act.Acquisition of Specialized Financing EntitiesDefinition of non-controlling interestIn this section, non-controlling interest means an equity interest, in a specialized financing entity of the association controlled by a specialized financing entity, that is held by a person other than the association or an entity controlled by the association.Ownership restrictionsAn association shall not acquire or hold control of, or hold, acquire or increase a substantial investment in, a specialized financing entity ifthe value of the outstanding debt obligations, other than those payable to the association or to entities controlled by the association, of the specialized financing entity and any specialized financing entity of the association controlled by the specialized financing entity, as reported on their respective balance sheets on an unconsolidated basis, exceeds twice the value of the sum of the following, namely,the value of the excess of assets over liabilities of the specialized financing entity as reported on its balance sheet on an unconsolidated basis, andthe value of the non-controlling interests as reported on the balance sheet of the specialized financing entity on a consolidated basis;the specialized financing entity controls or holds shares of, or ownership interests in,an entity referred to in any of paragraphs 390(1)(a) to (h) of the Act,an entity that is primarily engaged in the leasing of motor vehicles in Canada for the purpose of extending credit to a customer or financing a customer’s acquisition of a motor vehicle,an entity that is primarily engaged in providing temporary possession of personal property, including motor vehicles, to customers in Canada for a purpose other than to finance the customer’s acquisition of the property, oran entity that acts as an insurance broker or agent in Canada;the aggregate balance sheet value of the shares and ownership interests, other than shares or ownership interests held by the specialized financing entity in a specialized financing entity of the association that it controls, that the association, the specialized financing entity, the subsidiaries of the association and the other specialized financing entities of the association hold, or would hold, in an entity that the specialized financing entity holds control of, or a substantial investment in, is more than $250 million; orthe sum of the following exceeds 10% of the association’s regulatory capital, namely,the aggregate balance sheet value of the shares and ownership interests that the association and its subsidiaries, whether individually or jointly, would acquire in the specialized financing entity,the aggregate balance sheet value of the shares and ownership interests held by the association and its subsidiaries, whether individually or jointly, in the specialized financing entities of the association, andthe aggregate value of outstanding loans made by the association and its subsidiaries, whether individually or jointly, to the specialized financing entities of the association; orthe sum of the following exceeds or would exceed 25% of the association’s regulatory capital, namely,the aggregate balance sheet value of the shares and ownership interests held by the association and its subsidiaries, whether individually or jointly, in the specialized financing entity, in the entities controlled by the specialized financing entity and in the entities in which that specialized financing entity holds a substantial investment, andthe aggregate value of outstanding loans that the association and its subsidiaries, whether individually or jointly, have made to the specialized financing entity, to the entities controlled by the specialized financing entity and to the entities in which that specialized financing entity holds a substantial investment.13 year limitAn association shall not hold control of, or a substantial investment in, a specialized financing entity of the association if either the specialized financing entity of the association or the specialized financing entity of the association and one or more of the following entities, one after another, have held control of, or a substantial investment in, an entity, other than an entity described in subsection (4), for more than 13 consecutive years:the association; orany other specialized financing entity of the association.ExceptionA specialized financing entity of the association controlled by the specialized financing entity of the association shall not be considered for the purpose of subsection (3).Prior periods not includedIf a specialized financing entity of the association held control of, or a substantial investment in, an entity for a period before becoming the specialized financing entity of the association, that period shall not be considered for the purpose of subsection (3).SOR/2008-168, s. 10Control not requiredSubsection 390(4) of the Act does not apply to an association’s acquisition or increase of a substantial investment in an entity, in accordance with these Regulations, by way of an investment of a specialized financing entity of the association.Approvals not required — generalSubsections 390(5) and (6) of the Act do not apply to an association’s acquisition of control of, or acquisition or increase of a substantial investment in, an entity, in accordance with these Regulations, by way of an investment of a specialized financing entity of the association.Coming into ForceComing into forceThese Regulations come into force on the day on which sections 389, 396 and 463 of the Cooperative Credit Associations Act, as enacted by sections 314 and 339 of the Financial Consumer Agency of Canada Act, chapter 9 of the Statutes of Canada, 2001, come into force.[Note: Regulations in force October 24, 2001, see SI/2001-102.]