The Approach Guidance Approval or Authorization of Business and Investment Activities under the Credit Unions and Caisses Populaires Act, 2020 (“Guidance”) contains information regarding the approach that FSRA will take, the principles and criteria that FSRA will apply as well as the information that FSRA may request when considering applications and exercising its discretion under the Credit Unions and Caisses Populaires Act, 2020 (the “CUCPA 2020”) for the transactions listed in the table below.

This Application Guide lists the documentation and information which is typically included in an application to enable FSRA to apply the criteria and assess whether an application satisfies the principles set out in the Guidance.

Applications should include a cover letter listing each approval required, the specific section(s) of the legislation under which the approvals are being sought, and a list of the information included with the application.

The information package that supports an application must articulate how the principles and criteria for approval (reference the Guidance for criteria) have been satisfied, including supporting documentation.

The CUCPA 2020, supporting Regulations and FSRA Rules should also be reviewed to identify all regulatory approvals required for the transaction. All regulatory approvals for a single purpose should ideally be combined into one application.

CUCPA 2020 Provisions
(unless otherwise noted)		 Transaction
139 (2) Ancillary businesses
140 (2) Partnerships
143 (2) and (5) Guarantees
145 1 (1) Accept deposits from persons or entities approved by FSRA
151 (1) Subordinated indebtedness paid for in property
156 (2) Securities acquired due to loan defaults, not permitted by lending or investment policies
168 Acquire or establish a subsidiary
169 Variation of investment requirements under section 167 or subsection 168 (6)
170 Investment in another Credit Union
171 (1) and (2) Unauthorized assets acquired in the circumstances listed
174 (2) Purchase or sale of substantial assets
62 (4) (General Regulation) Security interests in Credit Union property
78(2) and (3) (General Regulation) Substantial investment in a body corporate or unincorporated entity

Ancillary businesses, s. 139 (2)

Applications under this section typically include the following information:

  1. Board resolution or applicable internal approval authorizing the ancillary business
  2. Full business case and rationale including:
    1. Demonstration of how the ancillary business fits into the strategic and business plan of the Credit Union
    2. Demonstrated experience and expertise required to implement the ancillary business
    3. Benefits and risks to the Credit Union, its members, customers and shareholders, as applicable
    4. Financial projections of the ancillary business for the first and next two years. Assumptions should be appropriately noted and include optimistic, pessimistic and base case scenarios
    5. Analysis of impact on capital, liquidity, and profitability of the Credit Union, including the Credit Union’s pro forma financial statements for the first and next two years
    6. Enterprise Risk Management framework as it relates to the ancillary business and the Credit Union’s operations. The application must identify the key risks associated with engaging in the ancillary business and outline the plan for managing these risks, including any additional controls, limits and internal reporting planned in this regard.
      The plan should also consider what audit and compliance activities will be necessary for appropriate oversight of the ancillary business, and whether additional resources are needed.
    7. Exit strategy in the event that planned results (and profits) are not apparent
  3. Identification of all other regulatory approvals required to engage in the ancillary business, if any
  4. Compliance report attesting that the Credit Union is in full compliance with the CUCPA 2020, Regulations and FSRA Rules

Partnerships, s. 140 (2)

An application to become a partner (other than a limited partner) in a limited partnership typically includes the following information:

  1. Board resolution or applicable internal approval authorizing the partnership
  2. Full business case including the following:
    1. Business rationale for becoming a general partner in a limited partnership or a partner in any other partnership, other than a limited partner in a limited partnership
    2. A detailed description of proposed activities of the partnership and the role of the Credit Union in the partnership
    3. Details of proposed partnership arrangement, including the partnership agreement
    4. Financial projections of the partnership for the first and next two years. Assumptions should be appropriately noted and include optimistic, pessimistic and base case scenarios
    5. Analysis of impact on capital, liquidity, and profitability of the Credit Union, including the Credit Union’s pro forma financial statements for the first and next two years
    6. Enterprise Risk Management framework as it relates to the partnership and the Credit Union’s operations. The application must identify the key risks associated with entering into the partnership and outline the plan for managing these risks including any additional controls, limits and internal reporting planned in this regard.
      The plan should also consider what audit and compliance activities will be necessary for appropriate oversight of the partnership, and whether additional resources are needed.

Guarantees, ss. 143 (2) and (5)

Pursuant to section 143 of the CUCPA 2020, a Credit Union may not guarantee the payment of money on behalf of another person unless:

  1. it is a fixed sum of money, with or without interest thereon
  2. the person has an unqualified obligation to reimburse the Credit Union for the full amount being guaranteed

An application under these subsections typically includes the following information:

  1. Board resolution or applicable internal approval authorizing the guarantee
  2. A description of the guarantee, including:
    1. The name and background of the counterparty and the nature of the Credit Union’s relationship with the counterparty
    2. The nature of the guarantee and whether it is an operational guarantee or a financial/credit guarantee
    3. Whether the Credit Union guarantees the performance of the underlying assets
    4. A copy of the guarantee agreement
  3. The business case and business rationale for the guarantee, including:
    1. Why the guarantee is necessary in the business and governance framework of the Credit Union. The Credit Union must articulate why such a transaction is necessary in the context of its business plan and strategies.
    2. The expected benefits for the Credit Union, its members, customers and shareholders.
    3. An analysis of the immediate and potential effects of the transaction on the financial position and risk profile of the Credit Union, including:
      1. Enterprise Risk Management framework as it relates to the guarantee and the Credit Union’s operations. The application must identify the key risks associated with the guarantee’s potential obligations and outline the plan for managing these risks including any additional controls, limits and internal reporting planned in this regard. The plan should also consider what audit and compliance activities will be necessary for appropriate oversight of the guarantee, and whether additional resources are needed
      2. An analysis demonstrating that the guarantee will not result in any unacceptable increase in credit, concentration or other risks to the Credit Union or FSRA
      3. An analysis of the likelihood of the guarantee’s enforcement and its resulting impact on Credit Union’s financial condition and performance including capital and liquidity.

Deposits from persons/entities not listed, s. 145 (1)

Applications under this section typically include:

  1. Board resolution or applicable internal approval authorizing the acceptance of the deposits
  2. A full business case and rationale including the following information:
    1. Explanation of how this aligns with the Credit Union’s business and governance model:
    2. Identification of the Credit Union’s business purpose, and how the addition of depositors not listed in sections 145(1) and (5) would help to achieve this purpose
    3. A strong business case demonstrating that an additional person or class of depositors is necessary.
    4. Full disclosure as to the identity of the depositor or type of depositors
    5. Analysis of the impact on the Credit Union’s capital, liquidity, and profitability, including the Credit Union’s pro forma financial statements for the first and next two years
    6. Enterprise Risk Management framework as it relates to accepting such deposits and the Credit Union’s operations. The application must identify the key risks associated with accepting the deposits and outline the plan for managing these risks including any additional controls, limits and internal reporting planned in this regard, and in particular:
      1. Identification of any negative impacts on the credit union, its members, customers and shareholders
      2. Analysis and mitigation of deposit concentration, anti-money laundering requirements, foreign exchange implications, liquidity, misconduct (market conduct) or other risks to the Credit Union or FSRA associated with accepting the deposits
      3. Plans to mitigate these risks, including specific timelines.
      4. The plan should also consider what audit and compliance activities will be necessary for appropriate oversight of the deposits, and whether additional resources are needed
  3. Evidence that regulatory capital implications (if any) have been considered:
    1. Copies of the Credit Union’s most recent and audited financial statements should be provided
    2. An analysis of the Credit Union’s regulatory capital, before and after any approval granted by FSRA.

Subordinated indebtedness paid for in property, s. 151 (1)

Applications to issue subordinated indebtedness for consideration in property, typically include the following information:

  1. Board resolution or applicable internal approval authorizing the issuance of subordinated indebtedness paid for in property
  2. A business case and rationale including the following information:
    1. A description of the transaction including:
      1. The value, terms and conditions of the subordinated debt that would be issued, and why it would qualify as regulatory capital under FSRA’s Capital Adequacy Requirements Rule.
      2. The person or entity to whom the subordinated indebtedness would be issued and their relationship to the Credit Union. In particular, confirmation as to whether the person is a restricted party and full disclosure as to whether the Credit Union has any pre-existing financial exposure to the person or entity.
      3. A description of the property that the Credit Union would receive, including a substantiation for the value of the property that demonstrates fair consideration would be received in exchange for the subordinated indebtedness.
    2. The business rationale for the issuance of the subordinated debt in consideration for the property. This must include an explanation of:
      1. How the property is relevant to the Credit Union’s operations
      2. Why property is being accepted for the proposed transaction.
    3. An analysis that demonstrates and confirms the following:
      1. The Credit Union will receive fair consideration for the subordinated indebtedness to be issued
      2. The asset(s) received as consideration is/are an authorized asset type under the Credit Union’s investment policies
      3. Where the counterparty is a restricted party, confirmation that the transaction will not result in the applicant having material ongoing financial exposure to a restricted party (or, alternatively, provide a description of the exposure and of the measures or other safeguards that will be put in place to mitigate the exposure)
      4. The transaction will not have a detrimental effect on the financial position or risk profile of the Credit Union
      5. The Credit Union will be in compliance with all of its relevant policies, including those related to liquidity, capital management, risk management and investments.
    4. An analysis of the effect the transaction will have on the financial position and risk profile of the Credit Union, including:
      1. Details regarding the impact on the Credit Union’s balance sheet including its capital and liquidity position – where the transaction is material to the Credit Union, these details are expected to be in the form of a comparative pro forma balance sheet (pre- and post-transaction) including relevant assumptions
      2. Confirmation of compliance with the Credit Union’s internal target(s) and FSRA’s requirements relating to capital and liquidity.

Unauthorized securities acquired due to loan defaults, s. 156 (2)

By definition, securities acquired by a Credit Union in the circumstances of subsection 156 (2) are higher risk from a business and governance perspective. In general, FSRA will consider granting approval where the Credit Union has provided a strong rationale in support of its application for an extension.

Applications under this section typically include the following information:

  1. Board resolution or applicable internal approval authorizing the extension
  2. Business case (with full supporting rationale), including:
    1. Purpose, nature and circumstances for the extension
    2. Full details and action plan to achieve compliance, including a detailed divestiture plan and timelines
    3. Details of the circumstances in which the shares or ownership interests were acquired by the Credit Union pursuant to the loan default. This must include details of the borrower, including confirmation as to whether they are a restricted party and the Credit Union’s financial exposure to the borrower including any connected persons
    4. Explanation as to why securities not authorized by the Credit Union’s lending and investment policies were accepted as security
    5. Compelling arguments supporting the need for an extension, including:
      1. Rationale for why additional time is needed to divest the securities beyond the two-year divestiture period already permitted under section 156 (2)
      2. Evidence that the extension will not result in any unacceptable increase in market risk or credit risk (including concentration risk) for the Credit Union, its members, customers or shareholders
      3. Cost/benefit analysis of extension and divestment.
    6. Benefits to the Credit Union, and its members, customers and shareholders as applicable
    7. The Credit Union must include an analysis of the following:
      1. Would divestment of the securities at the end of the two-year period result in a material loss to the Credit Union?
      2. What would be the consequences to the Credit Union and its members, customers and shareholders if an extension is not authorized by FSRA?
    8. An analysis of the effect the transaction will have on the financial position and risk profile of the Credit Union, including:
      1. Details regarding the impact to the Credit Union’s balance sheet including its capital and liquidity position – where the transaction is material to the Credit Union, these details are expected to be in the form of a comparative pro forma balance sheet (pre- and post-transaction) including relevant assumptions
      2. Confirmation of compliance with the Credit Union’s internal target(s) and FSRA’s requirements relating to capital and liquidity.
    9. Demonstration of sufficient oversight of the securities, from a business and governance perspective, particularly if:
      1. The investment is substantial or results in control of the entity
      2. The shares or ownership interests are indirectly held by the Credit Union, i.e., they are held through affiliates or holding companies, per clauses 156 (1)(c) and (d) of the CUCPA 2020.
  3. Copies of key documents, including the loan and security agreements between the Credit Union and the person/entity defaulting on the loa; and
  4. Relevant sections of the Credit Union’s investment and lending policies, and an explanation of the following:
    1. Why the securities do not comply with the Credit Union’s policies
    2. Plans to implement additional controls in these areas, including what audit and compliance activities will be necessary for appropriate oversight in the future, and whether additional resources are needed.

Acquire or establish a subsidiary, s. 168

Applications to acquire or establish a subsidiary under this section typically include the following information:

  1. Board resolution or applicable internal approval authorizing the acquisition or establishment of the subsidiary
  2. Purchase agreement and all other relevant legal documents relating to the proposed acquisition or establishment
  3. A business case and supporting rational including the following:
    1. Purpose of subsidiary, including the nature and extent of its business activities, and its current and targeted customers. The application must indicate whether it will be a wholly owned subsidiary or majority owned by the Credit Union (Where applicable, provide background of minority shareholders along with any shareholder’s agreement, side agreements, profit sharing arrangements, etc.)
    2. Amount of investment
    3. Cost/benefit analysis of proposed subsidiary
    4. Financial projections of the subsidiary for a minimum of three years
    5. Benefits and risks to the Credit Union’s members, customers and shareholders as applicable
    6. Enterprise Risk Management framework as it relates to the subsidiary and, for the subsidiary, as it relates to its operations. The application must identify the key risks associated with the acquisition or establishment of the subsidiary and outline the Credit Union’s plans for managing these risks including any additional controls, limits and internal reporting planned in this regard
    7. The plan should also consider what audit and compliance activities will be necessary for appropriate oversight of the subsidiary, and whether additional resources are needed
    8. Analysis of impact on capital, liquidity, and profitability of the Credit Union
    9. Where the subsidiary intends to provide financial services or products to the Credit Union’s members and customers:
      1. Who will conduct the sales of these financial services or products?
      2. Where will the sales take place?
      3. How will the products or services be promoted?
      4. What mechanisms are in place to ensure the Credit Union’s members and customers are aware of the entity that is responsible for the sales and for addressing their questions and concerns?
  4. Business plan and budget incorporating the proposed subsidiary, including income statement and balance sheet year-end projections for three years. Assumptions should be appropriately noted and include optimistic, pessimistic and base case scenarios
  5. Strategic plan for the current year indicating how the proposed subsidiary fits into the plan
  6. Identification of all other regulatory approvals required for this venture
  7. Exit strategy in the event that planned results (and profits) are not apparent
  8. Compliance report attesting that the Credit Union is in full compliance with the CUCPA 2020, Regulations and FSRA Rules.

Variation of prescribed investment requirements, s. 169

Please note that if a variation of the requirements under section 169 is granted, the CEO of FSRA may impose any terms the CEO considers appropriate pursuant to subsection 169 (3) of the CUCPA 2020.

Applications under this section typically include the following information:

  1. Board resolution or applicable internal approval authorizing the variation
  2. Business case (with full supporting rationale), including:
    1. A description of the variation’s purpose, nature and circumstances
    2. A detailed description of the variation sought, including the particular statutory provision and/or limit that would be contravened and a quantification of the variation
    3. Discussion of alternative courses of action, why they have been rejected, and an explanation for why the variation is required
    4. An analysis of the effect the transaction will have on the financial position and risk profile of the Credit Union, including:
    5. A recent valuation of the proposed investment or asset (if applicable)
    6. Details regarding the impact on the Credit Union’s balance sheet including its capital and liquidity position – where the transaction is material to the Credit Union, these details are expected to be in the form of a comparative pro forma balance sheet (pre- and post-transaction) including relevant assumptions
    7. Confirmation of compliance with the Credit Union’s internal target(s) and FSRA's requirements relating to capital and liquidity
    8. Full details and action plan to achieve compliance, including a detailed divestiture plan and timelines
    9. Evidence that the variation will not result in any unacceptable increase in market risk or credit risk (including concentration risk)
    10. Cost/benefit analysis of the variation, including a description and quantification of the anticipated benefits that are reasonably expected to occur as a result of the variation, and the timeframe in which such benefits are expected to materialize
    11. Benefits to the Credit Union, its members, customers and shareholders as applicable
    12. Enterprise Risk Management framework as it relates to the variation and the Credit Union’s operations. The application must identify the key risks associated with operating above prescribed limits and outline the plan for managing these risks including any additional controls, limits and internal reporting planned in this regard.
    13. The plan should also consider what audit and compliance activities will be necessary to maintain appropriate oversight, and whether additional resources are needed
  3. Evidence that there will be sufficient oversight of the proposed transaction, from a governance perspective, since the Credit Union is proposing to:
    1. invest in an investment that is otherwise prohibited
    2. exceed the connected person limit
    3. exceed the regulatory capital percentages
    4. exceed any other limits or avoid any restrictions imposed or prescribed under the CUCPA 2020, its regulations or a FSRA rule.
  4. Compliance report attesting that the Credit Union is in full compliance with the CUCPA 2020, Regulations and FSRA Rules.

Invest in another Credit Union, s. 170

In general, FSRA will consider an application from a Credit Union to invest in another Credit Union only in exceptional circumstances.

Applications under this section typically include the following information:

  1. Board resolution or applicable internal approval authorizing the investment in another Credit Union
  2. Business case and full supporting rationale for the investment including:
    1. Purpose and benefit to the Credit Unions, and the members, customers and shareholders of both Credit Unions
    2. Specific details regarding the investment including the amount, term and capital treatment of the investment by both Credit Unions
    3. Discussion of alternative courses of action, why they have been rejected, and an explanation for why the investment is required
    4. Enterprise Risk Management framework as it relates to the investment and the Credit Union’s operations. The application must identify the key risks associated with the investment and outline the Credit Union’s plans for managing these risks including any additional controls, limits and internal reporting planned in this regard.
    5. The plan should also consider what audit and compliance activities will be necessary for appropriate oversight of the deposits, and whether additional resources are needed
  3. Financial projections indicating the impact on each Credit Union’s capital and liquidity for the term of the investment
  4. Confirmation that both Credit Unions are in full compliance with the CUCPA 2020, its Regulations and FSRA Rules.

Unauthorized assets and extension of divestiture period, ss. 171 (1) and (2)

Credit Unions will apply under this section if they are seeking authorization to:

  1. accept securities or other assets not fulfilling the requirements of the CUCPA 2020 in the circumstances set out in clauses 171 (1)(a)-(f)
  2. an extension of the two-year divestiture period.

By definition, securities or assets not fulfilling the requirements of the CUCPA 2020 are higher risk from a business and governance perspective. In general, FSRA will consider an approval only in exceptional circumstances and where the Credit Union has provided a strong rationale in support of its application.

Applications typically contain the following information:

  1. Board resolution or applicable internal approval authorizing the acceptance of the securities/assets, or the extension to the 2-year divestiture period or relieving the credit union of the obligation to divest itself of the securities/assets
  2. Business case (with full supporting rationale) including:
    1. Purpose, nature and circumstances for the application, including a fulsome explanation of why the assets do not fulfill the requirements of the CUCPA 2020
    2. Evidence that that the securities or other assets were obtained in the circumstances set out in clauses 171 (1) (a) to (f)
    3. Relevant documents based on the circumstances under which the securities or assets were acquired (e.g., for clause 171 (1)(b), a copy of the amalgamation agreement)
    4. Details of the circumstances that necessitate the acquisition of the unauthorized securities or assets
    5. Compelling arguments supporting the need for the acquisition or extension to the divestiture period, including:
      1. Rationale for why the assets must be accepted, cannot be divested, or why additional time is needed to divest the assets beyond the two-year divestiture period already permitted under section 171
      2. Discussion of alternative courses of action, why they have been rejected, and an explanation for why the investment is required
      3. Evidence that the acceptance or extension of the divestiture period will not result in any unacceptable increase in market risk or credit risk (including concentration risk) for the Credit Union, or its members, customers and shareholders
    6. Cost/benefit analysis of acquiring the assets or extending the divestiture period
    7. Benefits to the Credit Union, and its members, customers and shareholders as applicable
    8. Full details and action plan to achieve compliance, including a detailed divestiture plan and timelines. The application should indicate whether or not additional controls will be implemented, including what audit and compliance activities will be necessary for appropriate oversight, and whether additional resources are needed
      1. An analysis of the following:
      2. Would divestment of the assets at the end of the two-year period result in a material loss to the Credit Union?
      3. What would be the consequences to the Credit Union and its members, customers and shareholders if an extension is not authorized by FSRA?
    9. An analysis of the effect the transaction will have on the financial position and risk profile of the Credit Union, including:
      1. Details regarding the impact on the Credit Union’s balance sheet including its capital and liquidity position – where the transaction is material to the CU, these details are expected to be in the form of a comparative pro forma balance sheet (pre- and post-transaction) including relevant assumptions
      2. Confirmation of compliance with the Credit Union’s internal target(s) and FSRA’s requirements relating to capital and liquidity
    10. Demonstration of sufficient oversight of the securities or other assets, from a business and governance perspective, particularly if:
      1. The investment is substantial or results in control of an entity
      2. The securities or other assets are indirectly held by the Credit Union (e.g., they are held through affiliates or holding companies).

Purchase or sale of substantial assets – s. 174 (2)

Please note that the nature and circumstances of each particular application under this subsection may necessitate additional information beyond what is listed below.

Applications to purchase or sell substantial assets typically include the following information:

  1. Board resolution authorizing the Credit Union(s) to enter into the Asset Purchase (Sale) Agreement
  2. Copy of purchase and sale agreement executed by both parties, which includes terms and conditions of the transaction
  3. Other required authorizations as applicable (e.g., by-law requirement satisfied, special resolution of members)
  4. Other required approvals to be obtained from FSRA, if applicable (e.g., shareholders’ meetings, or conversion of selling entity’s investment shares)
  5. Strategic plan for the current year indicating how the proposed purchase or sale fits into the plan
  6. A business case that includes the rational for the transaction:
    1. Analysis of qualitative and quantitative benefits to members, customers and shareholders
    2. Summary of how the due diligence process was performed, including who, when, the scope of the work performed, and how much (e.g., percentage of loan type, by number and dollars)
    3. Enterprise Risk Management framework as it relates to the purchase or sale and the Credit Union’s operations. The application must identify the key risks associated with the transaction and outline the Credit Union’s plans for managing these risks including any additional controls, limits and internal reporting planned in this regard. The plan should also consider what audit and compliance activities will be necessary to maintain appropriate oversight, and whether additional resources are needed
    4. Cost/benefit analysis of proposed purchase or sale
    5. Business plan and pro forma financial statements incorporating the proposed purchase or sale (three years, inclusive of current financial year). Key assumptions should be noted and explained, with discussion and analysis of impacts on capital, profitability, and/or liquidity
    6. Valuation and quality of assets to be purchased or sold, including the valuation methodology
  7. Compliance report attesting that the Credit Union is in full compliance with the CUCPA 2020, Regulations and FSRA Rules.

Non-Approval (Order)

Where an application to approve an agreement for the purchase or sale of a Credit Union’s assets is not approved by FSRA, an Order must be issued pursuant to subsection 174(7) of the CUCPA 2020. An Order issued pursuant to subsection 174(7) of the CUCPA 2020 is subject to the procedural rules in section 209 of the CUCPA 2020, which includes the right to appeal the Order.

Security interests in Credit Union property – s. 62 (4) of Regulation 105/22

Subsection 62 (4) of the General Regulation under the CUCPA 2020 permits Credit Unions to create a general security interest in property of the Credit Union except property required to satisfy the requirements of adequate liquidity under section 77 of the CUCPA 2020, subject to certain conditions. One of the conditions is that the debt is owed to a central, Central 1 Credit Union, Fédération des caisses Desjardins du Québec or any person or entity approved by the Chief Executive Officer.

Applications under this section typically include the following information:

  1. Board resolution or applicable internal approval authorizing the transaction(s)
  2. The general security agreement and all other applicable legal documentation
  3. A business case and rational including:
    1. A description of the general security interest, including:
    2. The name and background of the counterparty and the nature of the Credit Union’s relationship with the counterparty
    3. The nature and purpose of the general security interest
    4. The business rationale for the security interest, including:
      1. Why the security interest is necessary and in accordance with the business and governance framework of the Credit Union
      2. Why such a transaction is necessary in the context of the Credit Union’s business plan and strategies
      3. Why the business requirement cannot be satisfied through the assignment of a security interest in specific assets
      4. The expected benefits for the Credit Union, it’s members, customers and shareholders
    5. An analysis of the immediate and potential effect of the transaction on the financial position and risk profile of the Credit Union, including:
      1. Enterprise Risk Management framework as it relates to the transaction and the Credit Union’s operations. The application must identify the key risks associated with the transaction and outline the plan for managing these risks including any additional controls, limits and internal reporting planned in this regard.
      2. The plan should also consider what audit and compliance activities will be necessary to maintain appropriate oversight, and whether additional resources are needed
      3. The resulting impact on the Credit Union’s financial condition and performance including capital and liquidity, and plans to mitigate this if materially negative.

Substantial investment in a body corporate or unincorporated entity, ss. 78 (2) and (3) of Regulation 105/22

Applications to make a substantial investment in an entity listed in section 78 of the Regulation 105/22 General under the CUCPA 2020, typically include the following information:

  1. Board resolution or applicable internal approval authorizing the investment
  2. Shareholders’ agreement and all other relevant legal documents, as applicable
  3. Strategic plan for the current year indicating how the proposed investment fits into the plan
  4. Business case including:
    1. Amount of the investment and an analysis of the impact on capital, liquidity, and profitability of the Credit Union, including financial projections of the Credit Union for the current and next two years.
    2. Benefits and risks to the Credit Union, its members, customers and shareholders as applicable
    3. Enterprise Risk Management framework as it relates to the investment and the Credit Union’s operations. The application must identify the key risks associated with the investment, as applicable, and outline the plan for managing these risks including any additional controls, limits and internal reporting planned in this regard
    4. The plan should also consider what audit and compliance activities will be necessary to maintain appropriate oversight of the investment, and whether additional resources are needed
  5. Compliance report attesting that the Credit Union is in full compliance with the CUCPA 2020, its Regulations and FSRA’s Rules.