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Budget Implementation Act, 2007 (S.C. 2007, c. 29)

Assented to 2007-06-22

99. The Act is amended by adding the following after section 87:

Priority of Financial Collateral

Marginal note:Priority

88. In relation to a bankruptcy or proposal, no order may be made under this Act if the order would have the effect of subordinating financial collateral.

Marginal note:1997, c. 12, s. 78(2)

100. Subsection 95(2.1) of the Act is replaced by the following:

  • Marginal note:Exception

    (2.1) Subsection (2) does not apply in respect of the following:

    • (a) a margin deposit made by a clearing member with a clearing house; or

    • (b) a transfer, charge or payment made in connection with financial collateral and in accordance with the provisions of an eligible financial contract.

Marginal note:1997, c. 12, s. 118(1)

101. The definition “eligible financial contract” in section 253 of the Act is repealed.

Marginal note:2004, c. 25, s. 98(E)

102. Subsection 254(4) of the Act is replaced by the following:

  • Marginal note:Termination, netting or setting off or compensation

    (4) Nothing in this Part affects the rights of a party to a contract, including an eligible financial contract, with respect to termination, netting or setting off or compensation.

Marginal note:R.S., c. C-3

Canada Deposit Insurance Corporation Act

Marginal note:1996, c. 6, s. 41

  • 103. (1) Subsections 39.15(7) and (8) of the Canada Deposit Insurance Corporation Act are replaced by the following:

    • Marginal note:Financial contracts

      (7) Nothing in subsection (1) or (2) prevents the following actions from being taken in accordance with the provisions of an eligible financial contract:

      • (a) the termination of the contract;

      • (b) the netting or setting off or compensation of an amount payable under or in connection with the contract; or

      • (c) any dealing with financial collateral including

        • (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and

        • (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral.

    • Marginal note:Regulations

      (8) The Governor in Council may make regulations prescribing

      • (a) kinds of services for the purposes of subparagraph (5)(c)(xiii); and

      • (b) kinds of agreements for the purposes of the definition “eligible financial contract” in subsection (9).

    • Marginal note:Definitions

      (9) The following definitions apply in subsections (7) and (8).

      “eligible financial contract”

      « contrat financier admissible »

      “eligible financial contract” means

      • (a) a currency or interest rate swap agreement;

      • (b) a basis swap agreement;

      • (c) a spot, future, forward or other foreign exchange agreement;

      • (d) a cap, collar or floor transaction;

      • (e) a commodity swap;

      • (f) a forward rate agreement;

      • (g) a repurchase or reverse repurchase agreement;

      • (h) a spot, future, forward or other commodity contract;

      • (i) an agreement to buy, sell, borrow or lend securities, to clear or settle securities transactions or to act as a depository for securities;

      • (j) any derivative, combination or option in respect of, or agreement similar to, an agreement or contract referred to in paragraphs (a) to (i);

      • (k) any master agreement in respect of any agreement or contract referred to in paragraphs (a) to (j);

      • (l) any master agreement in respect of a master agreement referred to in paragraph (k);

      • (m) a guarantee of the liabilities under an agreement or contract referred to in paragraphs (a) to (l); and

      • (n) any agreement of a kind prescribed by the regulations.

      “financial collateral”

      « garantie financière »

      “financial collateral” means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

      • (a) cash or cash equivalents, including negotiable instruments and demand deposits;

      • (b) securities, a securities account, a securities entitlement or a right to acquire securities; or

      • (c) a futures agreement or a futures account.

      “title transfer credit support agreement”

      « accord de transfert de titres pour obtention de crédit »

      “title transfer credit support agreement” means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract.

  • (2) The definition “eligible financial contract” in subsection 39.15(9) of the Act, as enacted by subsection (1), is replaced by the following:

    “eligible financial contract”

    « contrat financier admissible »

    “eligible financial contract” means an agreement of a prescribed kind;