Application
This procedure is applicable to a federation or a credit union that is not a member of a federation (“financial services cooperative”) that applies under the AFSC for permission from the AMF to grant a hypothec or other security on its movable property for purposes other than those determined by law.
Application for permission
Federation
Under section 81 of the AFSC, no federation may, without the AMF’s permission, grant a hypothec or other security on its movable property, except:
- to secure a loan contracted to meet short term requirements for liquid funds or any loan contracted with the Bank of Canada;
- to obtain to obtain an advance of money under section 40.5 of the Deposit Institutions and Deposit Protection Act (chapter I-13.2.2) or, if it receives deposits from outside Québec, to obtain an advance from a federal or provincial body that guarantees or insures deposits;
- to become a member of a securities clearing-house or of any association the object of which is to organize a clearing and settlement system for instruments of payment or securities transactions, and to provide the necessary guarantees; or
- to act on behalf of its members or users for the clearing and settlement of instruments of payment or securities transactions.
For all other purposes, an application containing the information and documents indicated in the checklists below must be submitted to the AMF.
Credit union that is not a member of a federation
Under section 82 of the AFSC, a credit union that is not a member of a federation must obtain the permission of the AMF before hypothecating or giving property as security.
The provisions pertaining to applying for permission to grant a hypothec or other security on movable property are found in section 81 of the Act respecting financial services cooperatives
This link will open in a new window (“AFSC”), C‑67.3.
Checklists
The following checklists summarize the information and documents to be included in or with the application for permission to grant a hypothec or other security on movable property (hereinafter, “security”).
| Information/Documents | Source | Clarification by the AMF |
|---|---|---|
| 1. The context in which the application is being made and the objective of the security | s. 167 AFSC | n/a |
| 2. The intended purpose(s) for which permission to grant security is being sought (description and circumstances) | s. 167 AFSC | n/a |
| 3. The limits provided for each purpose and the overall limit | s. 167 AFSC | Provide evidence that the parameters used to establish the limits are reasonable. |
| 4. A description of the maximum impact on the financial position, including the liquidity and capital, of the financial group to which the federation belongs or of the credit union that is not member of a federation | s. 167 AFSC | n/a |
| 5. The corporate approvals required for each purpose (for exceptions, etc.) | s. 167 AFSC | n/a |
| 6. Monitoring and control measures such as reports detailing the security and security beneficiaries | s. 167 AFSC | n/a |
| Information/Documents | Source | Clarification by the AMF |
|---|---|---|
| If applicable, attach the latest version of the security policy or any other document establishing a governance framework for the granting of security | s. 167 AFSC | The AMF considers adopting a security policy a sound and prudent management practice. |
Granting of permission
The AMF will grant its permission when the following conditions have been met:
- The applicant has provided the required information and documents
- The applicant has demonstrated that:
- The granting of security will not materially affect the financial position of the financial group to which the federation belongs or of the credit union that is not a member of a federation, and the capital adequacy requirements will continue to be met; and
- Mechanisms have been implemented to provide a clear framework for the granting, and ensure adequate monitoring, of the security.
The AMF may, in granting its permission, require any undertaking it considers necessary to ensure compliance with the Act (s. 81, 2nd par. AFSC).
The AMF, after rendering its decision, will send the financial services cooperative a document evidencing the decision.
Fees and costs payable
Refer to the complete list of fees and costs payable to the AMF.
Processing time
Except in specific circumstances, the AMF will process the application within 90 days from the date the application is complete.