Jim Davidson only planned to make a short stop on his way to retirement when he accepted the role of interim CFO of CCMBC in 2015, but the transformation of the investment program into a new legal entity took longer than expected.
Reorganization of the CCMBC deposit program and transfer of lending and borrowing into the newly created CCMBC Investments Ltd. (a wholly owned subsidiary of CCMBC Legacy Fund Inc.) was formally completed Aug. 30, 2019.
“I naively thought this process would only take 6 months,” says Davidson. “Four and a half years later, I am pleased to present the current solution.”
The process began in 2012 when the third-party legal and accounting consultants engaged to review the denomination’s unique RRSP and mortgage lending program flagged the need to make regulatory changes to bring the program into compliance with securities law.
This led to the creation of a separate entity, CCMBC Legacy Fund Inc. (Legacy).
Legacy performs administrative functions transferred from CCMBC including the employees working in finance, payroll, and accounting services. The for-profit entity CCMBC Investments Ltd. now carries out the lending and investment activities. Legacy is the only voting shareholder of CCMBC Investments Ltd.
Unique in Canada, CCMBC Investments was developed through discussions with legal and financial consultants to meet the needs of CCMBC’s investors, continued ministry, and comply with Canadian tax and securities law.
“The ministry remains the same,” says Legacy CFO Bertha Dyck. “We continue to offer cash accounts, TFSA, and RRSP/RRIF accounts. The funds you invest with us continues to provide mortgages for MB churches, camps, schools, and pastors. Excess funds not currently needed for mortgages are invested in order to earn a return and remain liquid enough to provide mortgages when needed.”
Amid structural changes behind the scenes, Davidson wanted investors to see as little disruption to their experience as possible. “This structure most closely resembles the program we have been running for the past four decades,” says Davidson.
One new aspect is the involvement of Capstone Asset Management, a faith-based private wealth management firm based in Langley, B.C., who functions as the exempt market dealer. They are registered with the securities commission, capable of facilitating the selling of securities between CCMBC Investments and the investor.
“It’s a privilege for Capstone to have been selected by the CCMBC board to partner with them as they walk out their ministry and mission,” says Glenn Murray, president of Capstone. “It’s also an opportunity for Capstone to serve the investors as they steward their wealth and leverage that through their investment in CCMBC ministry.”
“After Sept. 1, 2019, all new or additional money added to investments in CCMBC Investments will require a conversation with Capstone to complete the paperwork for the transaction,” says Stephen Smith, chief compliance officer of Capstone. “To comply with securities regulations, our obligations are to ensure investors are aware of the nature of the investment they are making, determine that it is suitable for their circumstances, verify their receipt of the Offering Memorandum, and confirm that they are eligible to make the investment under a prospectus exemption.”
Once Capstone has completed the necessary paperwork, an investor will send their investment proceeds directly to CCMBC Investments.
After a temporary restriction on accepting new funds, as of Sept. 1, 2019, CCMBC Investments is open to accepting new funds from existing or new investors who should contact Capstone (1-855-437-7103) to initiate the process. Those in the Lower Mainland can visit Capstone’s Langley office or see Capstone staff in Abbotsford (32025 George Ferguson Way, next to the BCMB office) on Friday afternoons from 12:30–3:30 p.m.
Davidson, whose role shifted to CEO of Legacy when Dyck was appointed CFO in 2018, continues on a contract basis to provide consultation and support over the next few months as outstanding items need to be completed. “It has been a joy working with CCMBC,” he says.
This article was originally published by the MB Herald.