Budget Implementation Act, 2007 (S.C. 2007, c. 29)
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Assented to 2007-06-22
PART 9AMENDMENTS RELATING TO ELIGIBLE FINANCIAL CONTRACTS
R.S., c. C-36Companies’ Creditors Arrangement Act
105. Section 11.05 of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is repealed.
Marginal note:1997, c. 12, s. 124
106. (1) Subsection 11.1(1) of the Act is repealed.
Marginal note:1997, c. 12, s. 124
(2) Subsection 11.1(3) of the Act is replaced by the following:
Marginal note:Permitted actions
(3) The following actions are permitted in respect of an eligible financial contract that is entered into before proceedings under this Act are commenced in respect of the company and is terminated on or after that day, but only in accordance with the provisions of that contract:
(a) the netting or setting off or compensation of obligations between the company and the other parties to the eligible financial contract; and
(b) 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:Restriction
(4) No order may be made under this Act if the order would have the effect of staying or restraining the actions permitted under subsection (3).
Marginal note:Net termination values
(5) If net termination values determined in accordance with an eligible financial contract referred to in subsection (3) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim against the company in respect of those net termination values.
Marginal note:Priority
(6) No order may be made under this Act if the order would have the effect of subordinating financial collateral.
107. Paragraph 11.3(3)(a) of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
(a) under an eligible financial contract;
108. Paragraph 32(2)(a) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
(a) an eligible financial contract;
109. Section 34 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is amended by adding the following after subsection (6):
Marginal note:Eligible financial contracts
(7) Subsection (1) does not apply
(a) in respect of an eligible financial contract; or
(b) to prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for a company in accordance with the Canadian Payments Act and the by-laws and rules of that Association.
Marginal note:Permitted actions
(8) The following actions are permitted in respect of an eligible financial contract that is entered into before proceedings under this Act are commenced in respect of the company and is terminated on or after that day, but only in accordance with the provisions of that contract:
(a) the netting or setting off or compensation of obligations between the company and the other parties to the eligible financial contract; and
(b) 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:Restriction
(9) No order may be made under this Act if the order would have the effect of staying or restraining the actions permitted under subsection (8).
Marginal note:Net termination values
(10) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim against the company in respect of those net termination values.
Marginal note:Priority
(11) No order may be made under this Act if the order would have the effect of subordinating financial collateral.
1996, c. 6 (Sch.)Payment Clearing and Settlement Act
110. Section 2 of the Payment Clearing and Settlement Act is amended by adding the following in alphabetical order:
“eligible financial contract”
« contrat financier admissible »
“eligible financial contract” has the same meaning as in subsection 22.1(2) of the Winding-up and Restructuring Act;
111. (1) Section 13 of the Act is amended by adding the following after subsection (1):
Marginal note:Eligible financial contract
(1.1) If a netting agreement referred to in subsection (1) is an eligible financial contract, the financial institution or the Bank may also, in accordance with the provisions of that agreement, deal with financial collateral including
(a) selling or foreclosing or, in the Province of Quebec, surrendering financial collateral; and
(b) setting off or compensating financial collateral or applying the proceeds or value of financial collateral.
Marginal note:1999, c. 28, s. 133(2)
(2) The definition “netting agreement” in subsection 13(2) of the Act is replaced by the following:
“netting agreement”
« accord de compensation »
“netting agreement” means an agreement between two or more financial institutions or between the Bank and one or more financial institutions that is
(a) an eligible financial contract, or
(b) an agreement that provides for the netting or set-off or compensation of present or future obligations to make payments against the present or future rights to receive payments.
(3) The definition “net termination value” in subsection 13(2) of the English version of the Act is replaced by the following:
“net termination value”
« reliquat net »
“net termination value” means the net amount obtained after setting off or compensating or otherwise netting the obligations between the parties to a netting agreement in accordance with its provisions;
(4) Subsection 13(2) of the Act is amended by adding the following in alphabetical order:
“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;
Marginal note:2002, c. 14, s. 1
112. (1) The definition “netting agreement” in subsection 13.1(3) of the Act is replaced by the following:
“netting agreement”
« accord de compensation »
“netting agreement” means an agreement between a securities and derivatives clearing house and a clearing member that is
(a) an eligible financial contract; or
(b) an agreement that provides for the netting or setting off or compensation of present or future obligations to make payments or deliveries against present or future rights to receive payments or take deliveries.
Marginal note:2002, c. 14, s. 1
(2) The definition “net termination value” in subsection 13.1(3) of the English version of the Act is replaced by the following:
“net termination value”
« reliquat net »
“net termination value” means the net amount obtained after setting off or compensating or otherwise netting the obligations between a securities and derivatives clearing house and a clearing member in accordance with the netting agreement.
R.S., c. W-11; 1996, c. 6, s. 134Winding-up and Restructuring Act
Marginal note:1996, c. 6, s. 142
113. (1) Subsection 22.1(1) of the Winding-up and Restructuring Act is replaced by the following:
Marginal note:Permitted actions
22.1 (1) Nothing in this Act or an order made under this Act prevents or prohibits the following actions from being taken in accord-ance with the provisions of an eligible financial contract:
(a) the termination of the contract;
(b) the netting or setting off or compensation of obligations between a company in respect of which winding-up proceedings under this Act are commenced and another party to the contract; and
(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:Net termination values
(1.01) If the net termination values determined in accordance with the eligible financial contract referred to in subsection (1) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim provable against the company in respect of the net termination values.
Marginal note:1996, c. 6, s. 142
(2) The definition “eligible financial contract” in subsection 22.1(2) of the Act is replaced by the following:
“eligible financial contract”
« contrat financier admissible »
“eligible financial contract” means an agreement of a prescribed kind;
(3) Subsection 22.1(2) of the Act is amended by adding the following in alphabetical order:
“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;
Marginal note:1996, c. 6, s. 142
(4) Subsection 22.1(3) of the Act is replaced by the following:
Marginal note:Regulations
(3) The Governor in Council may make regulations prescribing kinds of agreements for the purposes of the definition “eligible financial contract” in subsection (2).
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