266Bank may give directions to associated person

1. The Bank may give an associated person (B) of a licensed deposit taker (A) a direction if the Bank—

2. has reasonable grounds to believe that 1 or more of the circumstances set out in subsection (2) apply; and
3. considers that directing B is necessary or desirable for 1 or more of the following purposes:
   1. to remedy or avoid the matter set out in subsection (2):
   2. to avoid or mitigate any adverse effects arising, or likely to arise, in connection with the matter set out in subsection (2):
   3. to avoid any contravention or further contravention of a prudential obligation in connection with the matter set out in subsection (2).

4. The circumstances are as follows:

5. A’s business and affairs are so closely connected with B that the Bank would be unable to effectively exercise the powers conferred by this Part in relation to A unless a direction is issued to B:
6. the circumstances of B are such as to be prejudicial to—
   1. A’s solvency; or
   2. A’s ability to comply with a prudential obligation in a material respect:
7. B’s affairs are being conducted in a manner prejudicial to—
   1. A’s solvency; or
   2. A’s ability to comply with a prudential obligation in a material respect.