<?xml version="1.0"?><Regulation lims:pit-date="2025-09-26" hasPreviousVersion="true" lims:lastAmendedDate="2025-09-26" lims:current-date="2025-09-29" lims:inforce-start-date="2018-02-07" lims:fid="705404" lims:id="705404" gazette-part="II" regulation-type="SOR" xml:lang="en" xmlns:lims="http://justice.gc.ca/lims"><Identification lims:inforce-start-date="2018-02-07" lims:fid="705405" lims:id="705405"><InstrumentNumber>SOR/2003-346</InstrumentNumber><RegistrationDate><Date><YYYY>2003</YYYY><MM>10</MM><DD>23</DD></Date></RegistrationDate><ConsolidationDate lims:inforce-start-date="2018-02-07"><Date><YYYY>2025</YYYY><MM>9</MM><DD>30</DD></Date></ConsolidationDate><EnablingAuthority lims:inforce-start-date="2018-02-07" lims:fid="705407" lims:id="705407"><XRefExternal reference-type="act" link="C-21">CANADIAN PAYMENTS ACT</XRefExternal></EnablingAuthority><LongTitle lims:inforce-start-date="2018-02-07" lims:fid="705408" lims:id="705408">Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System</LongTitle><RegulationMakerOrder><RegulationMaker>P.C.</RegulationMaker><OrderNumber>2003-1624</OrderNumber><Date><YYYY>2003</YYYY><MM>10</MM><DD>23</DD></Date></RegulationMakerOrder></Identification><Order lims:inforce-start-date="2018-02-07" lims:fid="705409" lims:id="705409"><Provision lims:inforce-start-date="2018-02-07" lims:fid="705410" lims:id="705410" format-ref="indent-0-0" language-align="yes" list-item="no"><Text>The Board of Directors of the Canadian Payments Association, pursuant to the definition <DefinedTermEn>payment item</DefinedTermEn><FootnoteRef idref="fn_SOR-2003-346_e_hq_4670">a</FootnoteRef> in subsection 2(1) and to subsection 18(1)<FootnoteRef idref="fn_SOR-2003-346_e_hq_4671">b</FootnoteRef> of the <XRefExternal reference-type="act" link="C-21">Canadian Payments Act</XRefExternal><FootnoteRef idref="fn_SOR-2003-346_e_hq_4672">c</FootnoteRef>, hereby makes the annexed <XRefExternal reference-type="regulation">Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System</XRefExternal>.</Text><Footnote id="fn_SOR-2003-346_e_hq_4670" placement="page" status="official"><Label>a</Label><Text>S.C. 2001, c. 9, s. 219(3)</Text></Footnote><Footnote id="fn_SOR-2003-346_e_hq_4671" placement="page" status="official"><Label>b</Label><Text>S.C. 2001, c. 9, s. 233</Text></Footnote><Footnote id="fn_SOR-2003-346_e_hq_4672" placement="page" status="official"><Label>c</Label><Text>S.C. 2001, c. 9, s. 218</Text></Footnote></Provision><Provision lims:inforce-start-date="2018-02-07" lims:fid="705411" lims:id="705411" format-ref="indent-0-0" language-align="yes" list-item="no"><Text>Ottawa, June 25, 2003</Text></Provision><Provision lims:inforce-start-date="2018-02-07" lims:fid="705412" lims:id="705412" format-ref="indent-0-0" language-align="yes" list-item="no"><Text>Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 18(2) of the <XRefExternal reference-type="act" link="C-21">Canadian Payments Act</XRefExternal><FootnoteRef idref="fn_SOR-2003-346_e_hq_4672">c</FootnoteRef>, hereby approves the annexed <XRefExternal reference-type="regulation">Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System</XRefExternal>, made by the Board of Directors of the Canadian Payments Association.</Text></Provision></Order><Body lims:inforce-start-date="2018-02-07" lims:fid="705413" lims:id="705413"><Heading lims:inforce-start-date="2018-02-07" lims:fid="705414" lims:id="705414" level="1"><TitleText>Interpretation</TitleText></Heading><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705415" lims:id="705415"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705416" lims:id="705416">Definitions</MarginalNote><Label>1</Label><Text>The following definitions apply in this By-law.</Text><Definition lims:inforce-start-date="2018-02-07" lims:fid="705417" lims:id="705417" generate-in-text="no"><Text><DefinedTermEn>ACSS cycle</DefinedTermEn> means the period beginning immediately after the final adjustment time on a given business day and ending with the final adjustment time on the next business day. (<DefinedTermFr>cycle du SACR</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705418" lims:id="705418" generate-in-text="no"><Text><DefinedTermEn>Automated Clearing Settlement System</DefinedTermEn> or <DefinedTermEn>ACSS</DefinedTermEn> means the system into which direct clearers, group clearers, clearing agents and the Bank of Canada make entries for the purpose of clearing. (<DefinedTermFr>système automatisé de compensation et de règlement</DefinedTermFr> ou <DefinedTermFr>SACR</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705419" lims:id="705419" generate-in-text="no"><Text><DefinedTermEn>business day</DefinedTermEn> means any day other than an ACSS holiday specified in the rules. (<DefinedTermFr>jour ouvrable</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705420" lims:id="705420" generate-in-text="no"><Text><DefinedTermEn>clearing</DefinedTermEn> means the reconciliation of payment items that were exchanged and the calculation of the clearing balances. (<DefinedTermFr>compensation</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705421" lims:id="705421" generate-in-text="no"><Text><DefinedTermEn>clearing agent</DefinedTermEn> means the direct clearer or group clearer appointed under subsection 33(1) that, on behalf of an indirect clearer, exchanges payment items and either effects clearing and settlement or makes entries into the ACSS. (<DefinedTermFr>agent de compensation</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705422" lims:id="705422" generate-in-text="no"><Text><DefinedTermEn>clearing balance</DefinedTermEn> means the total of the net amounts owing to or by a member as a result of clearing. (<DefinedTermFr>solde de compensation</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705423" lims:id="705423" generate-in-text="no"><Text><DefinedTermEn>direct clearer</DefinedTermEn> means a member, other than the Bank of Canada, appointed under section 26 that, on its own behalf, exchanges payment items and makes entries into the ACSS. (<DefinedTermFr>adhérent</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705424" lims:id="705424" generate-in-text="no"><Text><DefinedTermEn>exchange</DefinedTermEn> means the delivery and receipt of payment items. (<DefinedTermFr>échange</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705425" lims:id="705425" generate-in-text="no"><Text><DefinedTermEn>federal credit union</DefinedTermEn> has the same meaning as in section 2 of the <XRefExternal reference-type="act" link="B-1.01">Bank Act</XRefExternal>. (<DefinedTermFr>coopérative de crédit fédérale</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705426" lims:id="705426" generate-in-text="no"><Text><DefinedTermEn>final adjustment time</DefinedTermEn> means the time, set out in the rules, prior to which the correction of errors affecting the calculation of the clearing balance of a direct clearer or group clearer for the current ACSS cycle must be made. (<DefinedTermFr>heure finale de rajustement</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705427" lims:id="705427" generate-in-text="no"><Text><DefinedTermEn>final exchange</DefinedTermEn> means the last exchange of payment items at each regional exchange point for the current ACSS cycle. (<DefinedTermFr>échange final</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705428" lims:id="705428" generate-in-text="no"><Text><DefinedTermEn>group</DefinedTermEn> means a group described in section 28 and includes the group clearer. (<DefinedTermFr>groupe</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705429" lims:id="705429" generate-in-text="no"><Text><DefinedTermEn>group clearer</DefinedTermEn> means a member that, on its own behalf or on behalf of the entities belonging to the group in respect of which it is appointed in accordance with section 28, exchanges payment items and either effects clearing and settlement or makes entries into the ACSS. (<DefinedTermFr>adhérent-correspondant de groupe</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705430" lims:id="705430" generate-in-text="no"><Text><DefinedTermEn>indirect clearer</DefinedTermEn> means a member on behalf of which a clearing agent exchanges payment items and either effects clearing and settlement or makes entries into the ACSS. (<DefinedTermFr>sous-adhérent</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705431" lims:id="705431" generate-in-text="no"><Text><DefinedTermEn>pledge</DefinedTermEn> means a grant to the Bank of Canada of security in collateral to guarantee an advance of funds that the Bank of Canada may make for the purposes described in section 34.2 and includes a grant of security in which the Bank of Canada does not take possession of the collateral. (<DefinedTermFr>nantissement</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705432" lims:id="705432" generate-in-text="no"><Text><DefinedTermEn>regional exchange point</DefinedTermEn> means each location in Canada designated in the rules for the exchange of payment items among direct clearers, group clearers and clearing agents, or between one of them and the Bank of Canada, and includes the National Electronic Settlement Region within the meaning of the rules. (<DefinedTermFr>point régional d’échange</DefinedTermFr>)</Text></Definition><Definition lims:inforce-start-date="2018-02-07" lims:fid="705433" lims:id="705433" generate-in-text="no"><Text><DefinedTermEn>settlement</DefinedTermEn> means the payment of the clearing balance. (<DefinedTermFr>règlement</DefinedTermFr>)</Text></Definition><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705435" lims:id="705435">SOR/2012-161, s. 3; SOR/2015-185, s. 21; SOR/2018-16, s. 1</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705436" lims:id="705436" level="1"><TitleText>General</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705437" lims:id="705437"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705438" lims:id="705438">Notices</MarginalNote><Label>2</Label><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705439" lims:id="705439"><Label>(1)</Label><Text>Every notice required under this By-law shall be given in accordance with the rules.</Text></Subsection><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705440" lims:id="705440"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705441" lims:id="705441">Waiver of notice</MarginalNote><Label>(2)</Label><Text>Any person entitled to be given notice under this By-law may waive the notice.</Text></Subsection></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705442" lims:id="705442" level="1"><Label>PART 1</Label><TitleText>Payment Items</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705443" lims:id="705443" level="2"><Label>DIVISION 1</Label><TitleText>Application</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705444" lims:id="705444"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705445" lims:id="705445">Application — exchanges</MarginalNote><Label>3</Label><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705446" lims:id="705446"><Label>(1)</Label><Text>This Part applies to the following exchanges:</Text><Paragraph lims:inforce-start-date="2006-03-22" lims:fid="705447" lims:id="705447"><Label>(a)</Label><Text>in respect of payment items giving rise to clearing through the ACSS,</Text><Subparagraph lims:inforce-start-date="2006-03-22" lims:fid="705448" lims:id="705448"><Label>(i)</Label><Text>the exchange among direct clearers, group clearers and clearing agents, or between one of them and the Bank of Canada, and</Text></Subparagraph><Subparagraph lims:inforce-start-date="2006-03-22" lims:fid="705449" lims:id="705449"><Label>(ii)</Label><Text>the exchange between indirect clearers through their respective clearing agent; and</Text></Subparagraph></Paragraph><Paragraph lims:inforce-start-date="2006-03-22" lims:fid="705450" lims:id="705450"><Label>(b)</Label><Text>in respect of payment items not giving rise to clearing through the ACSS,</Text><Subparagraph lims:inforce-start-date="2006-03-22" lims:fid="705451" lims:id="705451"><Label>(i)</Label><Text>the exchange between an indirect clearer and its clearing agent,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2006-03-22" lims:fid="705452" lims:id="705452"><Label>(ii)</Label><Text>the exchange between indirect clearers that are represented by the same clearing agent, through that agent,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2006-03-22" lims:fid="705453" lims:id="705453"><Label>(iii)</Label><Text>the exchange between a group clearer and an entity belonging to the group, and</Text></Subparagraph><Subparagraph lims:inforce-start-date="2006-03-22" lims:fid="705454" lims:id="705454"><Label>(iv)</Label><Text>the exchange among the entities belonging to a group, through the group clearer.</Text></Subparagraph></Paragraph></Subsection><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705455" lims:id="705455"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705456" lims:id="705456">Application — clearing and settlement</MarginalNote><Label>(2)</Label><Text>This Part also applies to the clearing of payment items that are the object of an exchange referred to in subsection (1) and to the resulting settlement.</Text></Subsection></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705457" lims:id="705457" level="2"><Label>DIVISION 2</Label><TitleText>General</TitleText></Heading><Section lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:lastAmendedDate="2025-09-26" lims:fid="705458" lims:id="1537793"><MarginalNote lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="1537794" lims:id="1537794">Obligation — non-member locals</MarginalNote><Label>4</Label><Text>Every member that exchanges payment items and either effects clearing and settlement or makes entries into the ACSS on behalf of a non-member local referred to in subparagraph 6(1)(a)(ii) shall ensure that the non-member local complies with the by-laws and the rules as if it were a member.</Text><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705461" lims:id="705461">SOR/2010-43, s. 55</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="1537795" lims:id="1537795" lims:enactId="1537554">SOR/2025-198, s. 1</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2022-06-01" lims:fid="705462" lims:id="705462"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705463" lims:id="705463">Means of settlement</MarginalNote><Label>5</Label><Text>Settlement is effected by one of the following means, as specified in the rules:</Text><Paragraph lims:inforce-start-date="2022-06-01" lims:enacted-date="2021-08-05" lims:fid="705464" lims:id="1345429"><Label>(a)</Label><Text><Repealed>[Repealed, SOR/2021-182, s. 54]</Repealed></Text></Paragraph><Paragraph lims:inforce-start-date="2021-08-28" lims:enacted-date="2021-08-05" lims:fid="1316753" lims:id="1316753"><Label>(a.1)</Label><Text>by a <DefinitionRef>payment message</DefinitionRef> as defined in section 1 of the <XRefExternal reference-type="regulation">Canadian Payments Association By-law No. 9 — Lynx</XRefExternal>;</Text></Paragraph><Paragraph lims:inforce-start-date="2006-03-22" lims:fid="705465" lims:id="705465"><Label>(b)</Label><Text>on the basis of clearing balances established by the ACSS; or</Text></Paragraph><Paragraph lims:inforce-start-date="2006-03-22" lims:fid="705466" lims:id="705466"><Label>(c)</Label><Text>through a clearing agent.</Text></Paragraph><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2021-08-28" lims:enacted-date="2021-08-05" lims:fid="1316755" lims:id="1316755" lims:enactId="1314470">SOR/2021-182, s. 54</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705467" lims:id="705467" level="2"><Label>DIVISION 3</Label><TitleText>Payment Items Acceptable for Clearing</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705468" lims:id="705468" level="3"><TitleText>Classes of Payment Items</TitleText></Heading><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2025-09-26" lims:fid="705469" lims:id="705469"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705470" lims:id="705470">Approved payment items</MarginalNote><Label>6</Label><Subsection lims:inforce-start-date="2012-08-17" lims:fid="705471" lims:id="705471"><Label>(1)</Label><Text>Paper-based payment items and electronic payment items that are specified in the rules and that conform to the following requirements may be exchanged for the purpose of clearing and settlement:</Text><Paragraph lims:inforce-start-date="2012-08-17" lims:fid="705472" lims:id="705472"><Label>(a)</Label><Text>they are drawn on</Text><Subparagraph lims:inforce-start-date="2012-08-17" lims:fid="705473" lims:id="705473"><Label>(i)</Label><Text>a member, or</Text></Subparagraph><Subparagraph lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="705474" lims:id="1537796"><Label>(ii)</Label><Text>a local that is not a member and belongs to a central or cooperative credit association that is a member; and</Text></Subparagraph><Subparagraph lims:inforce-start-date="2012-08-17" lims:fid="705475" lims:id="705475"><Label>(iii)</Label><Text><Repealed>[Repealed, SOR/2010-43, s. 56]</Repealed></Text></Subparagraph></Paragraph><Paragraph lims:inforce-start-date="2012-08-17" lims:fid="705476" lims:id="705476"><Label>(b)</Label><Text>they</Text><Subparagraph lims:inforce-start-date="2012-08-17" lims:fid="705477" lims:id="705477"><Label>(i)</Label><Text>are payable on demand,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2012-08-17" lims:fid="705478" lims:id="705478"><Label>(ii)</Label><Text>are identified in accordance with the rules, and</Text></Subparagraph><Subparagraph lims:inforce-start-date="2012-08-17" lims:fid="705479" lims:id="705479"><Label>(iii)</Label><Text>conform to the requirements set out in the rules, including those relating to value and value date.</Text></Subparagraph></Paragraph></Subsection><Subsection lims:inforce-start-date="2012-08-17" lims:fid="705480" lims:id="705480"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705481" lims:id="705481">Payment items specified in the rules</MarginalNote><Label>(2)</Label><Text>Paper-based payment items and electronic payment items that do not conform to the requirements in subsection (1) but are specified in the rules and conform to the requirements set out in the rules may also be exchanged for the purpose of clearing and settlement.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2012-08-17" lims:fid="705483" lims:id="705483">SOR/2010-43, s. 56; SOR/2012-161, s. 4</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="1537797" lims:id="1537797" lims:enactId="1537556">SOR/2025-198, s. 2</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705484" lims:id="705484" level="3"><TitleText>Government Payment Items</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705485" lims:id="705485"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705486" lims:id="705486">Government payment items</MarginalNote><Label>7</Label><Text>Paper-based payment items and electronic payment items drawn on or by the Receiver General of Canada and payable by the Government of Canada that are specified in the rules may be exchanged for the purpose of clearing and settlement.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705487" lims:id="705487" level="3"><TitleText>International Payment Items</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705488" lims:id="705488"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705489" lims:id="705489">Classes of international payment items</MarginalNote><Label>8</Label><Text>International payment items that are specified in the rules and that fall within a class specified in the rules may be exchanged for the purpose of clearing and settlement.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705490" lims:id="705490" level="3"><TitleText>Payment Items in Dispute</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705491" lims:id="705491"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705492" lims:id="705492">Prohibition</MarginalNote><Label>9</Label><Text>Members shall not exchange, for the purpose of clearing and settlement, payment items in dispute within the meaning of the rules.</Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705493" lims:id="705493"><Label>10</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 5]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705494" lims:id="705494"><Label>11</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 5]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705495" lims:id="705495"><Label>12</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 5]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705496" lims:id="705496"><Label>13</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 5]</Repealed></Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705497" lims:id="705497" level="2"><Label>DIVISION 4</Label><TitleText>Exchange, Clearing and Settlement</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705498" lims:id="705498"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705499" lims:id="705499">Exchange irrevocable and irreversible</MarginalNote><Label>14</Label><Text>Every exchange of a payment item shall become irrevocable and irreversible at the time specified in the rules or, failing such time, when settlement is effected.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705500" lims:id="705500"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705501" lims:id="705501">Compliance with by-laws and rules</MarginalNote><Label>15</Label><Text>Every member shall exchange payment items in accordance with the by-laws and the rules and ensure that its payment items comply with the provisions of the by-laws and the rules.</Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705502" lims:id="705502"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705503" lims:id="705503">Settlement account — indirect clearers</MarginalNote><Label>16</Label><Subsection lims:inforce-start-date="2012-08-17" lims:fid="705504" lims:id="705504"><Label>(1)</Label><Text>Every indirect clearer shall maintain a settlement account with each of its clearing agents.</Text></Subsection><Subsection lims:inforce-start-date="2012-08-17" lims:fid="705505" lims:id="705505"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705506" lims:id="705506">Loan facilities</MarginalNote><Label>(2)</Label><Text>Every indirect clearer shall establish a loan facility with each of its clearing agents.</Text></Subsection><Subsection lims:inforce-start-date="2012-08-17" lims:fid="705507" lims:id="705507"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705508" lims:id="705508">Settlement account and loan facility</MarginalNote><Label>(3)</Label><Text>An indirect clearer may maintain a settlement account and establish a loan facility with a central that has been designated in accordance with subsection 33(2).</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2012-08-17" lims:fid="705510" lims:id="705510">SOR/2012-161, s. 6</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705511" lims:id="705511" level="2"><Label>DIVISION 5</Label><TitleText>Return of Payment Items</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705512" lims:id="705512"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705513" lims:id="705513">Returns in accordance with the rules</MarginalNote><Label>17</Label><Text>Despite section 14, payment items, the exchange of which becomes irrevocable and irreversible when settlement is effected, may be returned after settlement in accordance with, and for the reasons set out in, the rules.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705514" lims:id="705514"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705515" lims:id="705515">Acceptance of returned payment items</MarginalNote><Label>18</Label><Text>Every member shall accept payment items returned to it in accordance with the rules.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705516" lims:id="705516" level="1"><Label>PART 2</Label><TitleText>Automated Clearing Settlement System</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705517" lims:id="705517" level="2"><Label>DIVISION 1</Label><TitleText>Application</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705518" lims:id="705518"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705519" lims:id="705519">Application</MarginalNote><Label>19</Label><Text>This Part applies to the exchange of payment items giving rise to clearing through the ACSS, and to the clearing of those payment items and the resulting settlement.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705520" lims:id="705520" level="2"><Label>DIVISION 2</Label><TitleText>General</TitleText></Heading><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705521" lims:id="705521"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705522" lims:id="705522">Exclusion of liability</MarginalNote><Label>20</Label><Text>Neither the Association nor a director, an officer or an employee is liable for any loss or damage suffered by a member for anything done or omitted to be done, honestly and in good faith, in relation to the ACSS, in the administration or discharge of any powers or duties that under this By-law are intended or authorized to be executed or performed.</Text><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705524" lims:id="705524">SOR/2010-43, s. 57</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705525" lims:id="705525"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705526" lims:id="705526">Ownership</MarginalNote><Label>21</Label><Text>The Association owns the ACSS.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705527" lims:id="705527"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705528" lims:id="705528">ACSS operated by Association</MarginalNote><Label>22</Label><Text>The operation, management and ongoing maintenance of the ACSS form part of the business of the Association.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705529" lims:id="705529"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705530" lims:id="705530">Operation of ACSS</MarginalNote><Label>23</Label><Text>Subject to section 46 and except in case of a national failure of the ACSS within the meaning of the rules, the Association shall ensure that the ACSS is operational on all business days.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705531" lims:id="705531"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705532" lims:id="705532">Access to information</MarginalNote><Label>24</Label><Text>Access to information relating to clearing and to the operation of the ACSS shall be governed by the rules.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705533" lims:id="705533" level="2"><Label>DIVISION 3</Label><TitleText>Participation in the ACSS</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705534" lims:id="705534" level="3"><TitleText>Participants</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705535" lims:id="705535"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705536" lims:id="705536">Participants</MarginalNote><Label>25</Label><Text>Only direct clearers, group clearers, clearing agents and the Bank of Canada may make entries into the ACSS.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705537" lims:id="705537" level="3"><TitleText>Requirements</TitleText></Heading><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2020-07-16" lims:fid="705538" lims:id="705538"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705539" lims:id="705539">Direct Clearers Appointment</MarginalNote><Label>26</Label><Text>Subject to section 32, the Board may, on completion by a member of the application procedures set out in the rules, appoint the member to act as a direct clearer if the member</Text><Paragraph lims:inforce-start-date="2018-02-07" lims:fid="705540" lims:id="705540"><Label>(a)</Label><Text>maintains a settlement account with the Bank of Canada;</Text></Paragraph><Paragraph lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="705541" lims:id="1257804"><Label>(b)</Label><Text>has established a loan facility with the Bank of Canada and has entered into any agreements that may be required by the Bank of Canada governing the settlement of the member’s clearing balance, the administration of the loan facility, the provision by the Bank of Canada of advances for ACSS purposes and the pledging of collateral to secure advances that may be made under the loan facility; and</Text></Paragraph><Paragraph lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="705542" lims:id="1257805"><Label>(c)</Label><Text><Repealed>[Repealed, SOR/2020-167, s. 4]</Repealed></Text></Paragraph><Paragraph lims:inforce-start-date="2018-02-07" lims:fid="705543" lims:id="705543"><Label>(d)</Label><Text>meets the technical, financial and other requirements set out in the rules.</Text></Paragraph><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705545" lims:id="705545">SOR/2018-16, s. 2</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="1257806" lims:id="1257806" lims:enactId="1257669">SOR/2020-167, s. 4</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705546" lims:id="705546"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705547" lims:id="705547">Revocation of status</MarginalNote><Label>27</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705548" lims:id="705548"><Label>(1)</Label><Text>The Board may revoke the direct clearer status of a member if that member no longer meets the requirements set out in section 26.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705549" lims:id="705549"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705550" lims:id="705550">Notification of revocation</MarginalNote><Label>(2)</Label><Text>The President shall, as soon as practicable, notify all members of the revocation.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705552" lims:id="705552">SOR/2010-43, s. 58</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2015-08-01" lims:lastAmendedDate="2025-09-26" lims:fid="705553" lims:id="705553"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705554" lims:id="705554">Groups and Group Clearers Composition of group</MarginalNote><Label>28</Label><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705555" lims:id="705555"><Label>(1)</Label><Text>A group may consist of</Text><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705556" lims:id="705556"><Label>(a)</Label><Text>a central or cooperative credit association that has been appointed to be the group clearer and one or more of the following, including any combination of them:</Text><Subparagraph lims:inforce-start-date="2015-08-01" lims:fid="705557" lims:id="705557"><Label>(i)</Label><Text>centrals,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2015-08-01" lims:fid="705558" lims:id="705558"><Label>(ii)</Label><Text>cooperative credit associations,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2015-08-01" lims:fid="705559" lims:id="705559"><Label>(iii)</Label><Text>federal credit unions,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="705560" lims:id="1537798"><Label>(iv)</Label><Text>locals, whether members or non-members, that belong to the group clearer, or</Text></Subparagraph><Subparagraph lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="705561" lims:id="1537799"><Label>(v)</Label><Text>locals, whether members or non-members, that belong to another central or cooperative credit association if that central or cooperative credit association belongs to the group; or</Text></Subparagraph></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705562" lims:id="705562"><Label>(b)</Label><Text>two or more members from one of the following categories that have appointed a member of the category to be the group clearer:</Text><Subparagraph lims:inforce-start-date="2015-08-01" lims:fid="705563" lims:id="705563"><Label>(i)</Label><Text>authorized foreign banks and banks, excluding federal credit unions,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2015-08-01" lims:fid="705564" lims:id="705564"><Label>(ii)</Label><Text>trust companies and loan companies,</Text></Subparagraph><Subparagraph lims:inforce-start-date="2015-08-01" lims:fid="705565" lims:id="705565"><Label>(iii)</Label><Text>securities dealers, or</Text></Subparagraph><Subparagraph lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="705566" lims:id="1537800"><Label>(iv)</Label><Text>other members, excluding centrals, cooperative credit associations, federal credit unions, locals, qualified corporations, trustees of qualified trusts and life insurance companies.</Text></Subparagraph></Paragraph></Subsection><Subsection lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="705567" lims:id="1537801"><MarginalNote lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="1537802" lims:id="1537802">Central acting for non-member locals</MarginalNote><Label>(2)</Label><Text>For greater certainty, if two or more non-member locals belong to two centrals, one of which belongs to the other central, one of the centrals may appoint the other central to act as group clearer for itself and the non-member locals.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2015-08-01" lims:fid="705570" lims:id="705570">SOR/2012-279, s. 2; SOR/2015-185, s. 22</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2025-09-26" lims:enacted-date="2025-09-26" lims:fid="1537803" lims:id="1537803" lims:enactId="1537558">SOR/2025-198, s. 3</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2020-07-16" lims:fid="705571" lims:id="705571"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705572" lims:id="705572">Required approval</MarginalNote><Label>29</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705573" lims:id="705573"><Label>(1)</Label><Text>An appointment referred to in section 28 is subject to the approval of the Board.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705574" lims:id="705574"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705575" lims:id="705575">Criteria for approval</MarginalNote><Label>(2)</Label><Text>The Board may approve the appointment if</Text><Paragraph lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="705576" lims:id="1257807"><Label>(a)</Label><Text>the appointed member complies with the requirements set out in paragraphs 26(a), (b) and (d); and</Text></Paragraph><Paragraph lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="705577" lims:id="1257808"><Label>(b)</Label><Text><Repealed>[Repealed, SOR/2020-167, s. 5]</Repealed></Text></Paragraph><Paragraph lims:inforce-start-date="2010-03-01" lims:fid="705578" lims:id="705578"><Label>(c)</Label><Text>in the case of a group referred to in paragraph 28(1)(b), the appointed member enters into contractual commitments with each of the entities belonging to the group that are necessary to ensure the ability of the member to satisfy its liability as group clearer.</Text></Paragraph></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705580" lims:id="705580">SOR/2010-43, s. 59(E)</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="1257809" lims:id="1257809" lims:enactId="1257670">SOR/2020-167, s. 5</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2020-07-16" lims:fid="705581" lims:id="705581"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705582" lims:id="705582">Revocation of status</MarginalNote><Label>30</Label><Subsection lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="705583" lims:id="1257810"><Label>(1)</Label><Text>The Board may revoke the group clearer status of a member if that member no longer complies with the requirements set out in paragraph 26(a), (b) or (d) or, in the case of a group referred to in paragraph 28(1)(b), the contractual commitments referred to in paragraph 29(2)(c) no longer ensure the ability of the member to satisfy its liability as group clearer.</Text></Subsection><Subsection lims:inforce-start-date="2012-08-17" lims:fid="705584" lims:id="705584"><MarginalNote lims:inforce-start-date="2012-08-17" lims:fid="705585" lims:id="705585">Notification of revocation</MarginalNote><Label>(2)</Label><Text>The President shall, as soon as practicable, notify all members of the revocation.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2012-08-17" lims:fid="705587" lims:id="705587">SOR/2010-43, s. 60; SOR/2012-161, s. 7</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="1257811" lims:id="1257811" lims:enactId="1257671">SOR/2020-167, s. 6</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705588" lims:id="705588"><Label>31</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 8]</Repealed></Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705589" lims:id="705589"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705590" lims:id="705590">Exception — Direct Clearer and Group Clearer Exception</MarginalNote><Label>32</Label><Text>A qualified corporation, on behalf of its money market mutual fund, a trustee of a qualified trust and a life insurance company are not eligible to be a direct clearer or group clearer.</Text></Section><Section lims:inforce-start-date="2015-08-01" lims:lastAmendedDate="2015-08-01" lims:fid="705591" lims:id="705591"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705592" lims:id="705592">Clearing agents appointment</MarginalNote><Label>33</Label><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705593" lims:id="705593"><Label>(1)</Label><Text>The Board may, on completion by a direct clearer or group clearer of the application procedures set out in the rules, appoint it to act as a clearing agent if the direct clearer or group clearer meets the technical, financial and other requirements set out in the rules.</Text></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705594" lims:id="705594"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705595" lims:id="705595">Designation of a central</MarginalNote><Label>(2)</Label><Text>A group clearer that has been appointed to act as a clearing agent for an indirect clearer may, in accordance with the rules, designate a central that belongs to the group where the settlement account of that indirect clearer is maintained and the loan facility of that indirect clearer is established.</Text></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705596" lims:id="705596"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705597" lims:id="705597">Effect of designation</MarginalNote><Label>(3)</Label><Text>The designation of a central in accordance with subsection (2) by the group clearer appointed to act as a clearing agent does not preclude the group clearer from remaining subject to all obligations applicable to clearing agents set out in this By-law and in the applicable rules.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2015-08-01" lims:fid="705599" lims:id="705599">SOR/2012-161, s. 9; SOR/2015-185, s. 23(F)</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705600" lims:id="705600"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705601" lims:id="705601">Revocation of status</MarginalNote><Label>34</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705602" lims:id="705602"><Label>(1)</Label><Text>The Board may revoke the clearing agent status of a direct clearer or group clearer that no longer meets the requirements set out in the rules.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705603" lims:id="705603"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705604" lims:id="705604">Automatic revocation</MarginalNote><Label>(2)</Label><Text>If a member’s status as direct clearer or group clearer is revoked, its status as clearing agent is also revoked.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705605" lims:id="705605"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705606" lims:id="705606">Notification of revocation</MarginalNote><Label>(3)</Label><Text>The President shall, as soon as practicable, notify all members of the revocation.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705608" lims:id="705608">SOR/2010-43, s. 61</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705609" lims:id="705609" level="3"><TitleText>Pledging Collateral</TitleText></Heading><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705610" lims:id="705610"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705611" lims:id="705611">Calculation of necessary collateral</MarginalNote><Label>34.1</Label><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705612" lims:id="705612"><Label>(1)</Label><Text>The Association shall calculate, in accordance with the rules, the required amount of the ACSS collateral pool and the amount of each direct clearer and group clearer’s collateral pool pledge. The Association shall periodically recalculate these amounts, in accordance with the rules.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705613" lims:id="705613"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705614" lims:id="705614">Pledging collateral</MarginalNote><Label>(2)</Label><Text>Each direct clearer and group clearer shall pledge collateral to the Bank of Canada, in an amount determined by the Association in accordance with the rules, within the time and in the manner set out in the rules. If the amount of the collateral pool pledge increases as a result of a recalculation under subsection (1), the direct clearer or group clearer shall pledge the recalculated amount, within the time and in the manner set out in the rules.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705615" lims:id="705615"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705616" lims:id="705616">Valuation by Bank of Canada</MarginalNote><Label>(3)</Label><Text>Any collateral pledged by a direct clearer or group clearer for ACSS purposes is subject to valuation by the Bank of Canada at the time the pledge is made.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705617" lims:id="705617"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705618" lims:id="705618">Insufficient collateral</MarginalNote><Label>(4)</Label><Text>If, on valuation of the collateral by the Bank of Canada, the value assigned by the Bank of Canada to the collateral pledged is less than the amount that is required to be pledged, the direct clearer or group clearer shall pledge additional collateral.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705619" lims:id="705619"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705620" lims:id="705620">Exceeding collateral requirement</MarginalNote><Label>(5)</Label><Text>If the value of the direct clearer or group clearer’s collateral pledge exceeds the amount that is required to be pledged, the direct clearer or group clearer shall, on request for a release made to the Bank of Canada, obtain a release of the excess collateral from the pledge.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705622" lims:id="705622">SOR/2018-16, s. 3</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705623" lims:id="705623"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705624" lims:id="705624">Restricted purpose</MarginalNote><Label>34.2</Label><Text>A direct clearer or group clearer shall not use the collateral pledged under subsection 34.1(2) for any purpose other than securing an advance from the Bank of Canada to enable settlement under section 50.</Text><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705626" lims:id="705626">SOR/2018-16, s. 3</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705627" lims:id="705627" level="2"><Label>DIVISION 4</Label><TitleText>Representation</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705628" lims:id="705628" level="3"><TitleText>General</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705629" lims:id="705629"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705630" lims:id="705630">Representation of indirect clearers</MarginalNote><Label>35</Label><Text>An indirect clearer shall designate at least one clearing agent. However, for those payment items specified in the rules, an indirect clearer shall be represented at every regional exchange point by the same clearing agent.</Text></Section><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705631" lims:id="705631"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705632" lims:id="705632">Amalgamations</MarginalNote><Label>36</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705633" lims:id="705633"><Label>(1)</Label><Text>If two members amalgamate, for a period of one year following the amalgamation,</Text><Paragraph lims:inforce-start-date="2010-03-01" lims:fid="705634" lims:id="705634"><Label>(a)</Label><Text>payment items, including those not giving rise to clearing through the ACSS, drawn on or payable by the member that ceases to exist, may continue to be exchanged; and</Text></Paragraph><Paragraph lims:inforce-start-date="2010-03-01" lims:fid="705635" lims:id="705635"><Label>(b)</Label><Text>in the case of an indirect clearer that ceases to exist, it may be represented at a regional exchange point, despite section 35, by more than one clearing agent for the payment items specified in the rules.</Text></Paragraph></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705636" lims:id="705636"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705637" lims:id="705637">Extension of period</MarginalNote><Label>(2)</Label><Text>The President may extend the one-year period if it is necessary for the proper conduct of the business of the amalgamating members.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705639" lims:id="705639">SOR/2010-43, s. 62</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705640" lims:id="705640" level="3"><TitleText>Prior to Acting — Clearing Agent</TitleText></Heading><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705641" lims:id="705641"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705642" lims:id="705642">Notice</MarginalNote><Label>37</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705643" lims:id="705643"><Label>(1)</Label><Text>Subject to section 41, a clearing agent shall give at least 30 days’ notice to the President prior to acting as clearing agent for an indirect clearer.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705644" lims:id="705644"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705645" lims:id="705645">Obligation of President</MarginalNote><Label>(2)</Label><Text>The President shall inform the direct clearers and group clearers of the notice in accordance with the rules.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705647" lims:id="705647">SOR/2010-43, s. 63</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705648" lims:id="705648" level="3"><TitleText>Ceasing to Act — Clearing Agent and Group Clearer</TitleText></Heading><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705649" lims:id="705649"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705650" lims:id="705650">30 days notice</MarginalNote><Label>38</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705651" lims:id="705651"><Label>(1)</Label><Text>A clearing agent shall give at least 30 days’ notice to an indirect clearer and to the President prior to ceasing to act as clearing agent for the indirect clearer.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705652" lims:id="705652"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705653" lims:id="705653">Obligation of President</MarginalNote><Label>(2)</Label><Text>The President shall inform the direct clearers and group clearers of the notice in accordance with the rules.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705654" lims:id="705654"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705655" lims:id="705655">Exception</MarginalNote><Label>(3)</Label><Text>Despite subsection (1), the clearing agent shall not cease acting for an indirect clearer if another clearing agent is designated to act for the indirect clearer until the other clearing agent has started acting for the indirect clearer.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705656" lims:id="705656"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705657" lims:id="705657">Status revoked</MarginalNote><Label>(4)</Label><Text>Despite subsections (1) and (3), a clearing agent shall cease to act without delay if its status is revoked.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705659" lims:id="705659">SOR/2010-43, s. 64</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2015-08-01" lims:lastAmendedDate="2020-07-16" lims:fid="705660" lims:id="705660"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705661" lims:id="705661">Exception — ceasing to act immediately</MarginalNote><Label>39</Label><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705662" lims:id="705662"><Label>(1)</Label><Text lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="1257704" lims:id="1257812">Subject to subsection 39.15(3.1) of the <XRefExternal reference-type="act" link="C-3">Canada Deposit Insurance Corporation Act</XRefExternal>, a clearing agent may, despite subsections 38(1) and (3), immediately cease to act for an indirect clearer if</Text><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705663" lims:id="705663"><Label>(a)</Label><Text>the clearing agent reasonably believes that the indirect clearer poses a legal, financial or operational risk to the clearing agent; or</Text></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705664" lims:id="705664"><Label>(b)</Label><Text>the indirect clearer has breached a substantial term of an agreement entered into with the clearing agent for the purposes of clearing and settlement.</Text></Paragraph></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705665" lims:id="705665"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705666" lims:id="705666">Notification to other clearing agents</MarginalNote><Label>(2)</Label><Text>The clearing agent shall give notice, before the time set out in the rules and at least one hour prior to ceasing to act, to the other clearing agents acting for the indirect clearer. The other clearing agents may unanimously waive the notice or abridge the time for the notice.</Text></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705667" lims:id="705667"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705668" lims:id="705668">Notification to indirect clearers and group clearers</MarginalNote><Label>(3)</Label><Text>The clearing agent shall, immediately on ceasing to act,</Text><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705669" lims:id="705669"><Label>(a)</Label><Text>give written notice to the indirect clearer of its decision to immediately cease to act for the indirect clearer; and</Text></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705670" lims:id="705670"><Label>(b)</Label><Text>give notice of its decision to the President, to its other indirect clearers and to the other clearing agents acting for the indirect clearer and, in so far as is practicable, give notice of its decision to the other direct clearers and group clearers.</Text></Paragraph></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705671" lims:id="705671"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705672" lims:id="705672">Notice by the President</MarginalNote><Label>(4)</Label><Text>The President shall give notice to every other direct clearer and group clearer of the clearing agent’s decision to immediately cease to act for the indirect clearer.</Text></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705673" lims:id="705673"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705674" lims:id="705674">Notice by direct clearers and group clearers</MarginalNote><Label>(5)</Label><Text>Every other direct clearer or group clearer shall immediately notify every indirect clearer for which it acts as clearing agent or every entity belonging to the group for which it acts as group clearer, as the case may be, of that decision.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2015-08-01" lims:fid="705676" lims:id="705676">SOR/2010-43, s. 65; SOR/2015-185, s. 24</HistoricalNoteSubItem><HistoricalNoteSubItem lims:inforce-start-date="2020-07-16" lims:enacted-date="2020-07-16" lims:fid="1257813" lims:id="1257813" lims:enactId="1257673">SOR/2020-167, s. 7</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705677" lims:id="705677"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705678" lims:id="705678">Obligation to accept payment items</MarginalNote><Label>40</Label><Text>A clearing agent that ceases to act for an indirect clearer shall accept payment items, including those not giving rise to clearing through the ACSS, that are drawn on or payable by the indirect clearer and either effect clearing and settlement or make entries into the ACSS until the final exchange on the business day on which the clearing agent ceases to act.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705679" lims:id="705679"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705680" lims:id="705680">Designation of new clearing agent</MarginalNote><Label>41</Label><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705681" lims:id="705681"><Label>(1)</Label><Text>An indirect clearer may, immediately on receiving the notice referred to in subsection 38(1) or 39(3), designate a new clearing agent from among the direct clearers and group clearers appointed by the Board to act as clearing agent.</Text></Subsection><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705682" lims:id="705682"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705683" lims:id="705683">When designation takes effect</MarginalNote><Label>(2)</Label><Text>The designation takes effect at the time agreed on by the indirect clearer and the new clearing agent.</Text></Subsection></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705684" lims:id="705684"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705685" lims:id="705685">Duty to cooperate</MarginalNote><Label>42</Label><Text>The former and the new clearing agent shall cooperate to ensure an orderly change in representation.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705686" lims:id="705686" level="3"><TitleText>Change to Composition of Group</TitleText></Heading><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705687" lims:id="705687"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705688" lims:id="705688">Notice</MarginalNote><Label>43</Label><Text>A group clearer shall, at least 30 days prior to its effective date, give notice to the President of its decision to cease acting as a group clearer for an entity belonging to the group or of the withdrawal of an entity from the group for which it acts as a group clearer.</Text><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705690" lims:id="705690">SOR/2010-43, s. 66</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2015-08-01" lims:lastAmendedDate="2015-08-01" lims:fid="705691" lims:id="705691"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705692" lims:id="705692">Exception — immediately ceasing to act</MarginalNote><Label>43.1</Label><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705693" lims:id="705693"><Label>(1)</Label><Text>Despite section 43, a group clearer may immediately cease to act for an entity belonging to the group if</Text><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705694" lims:id="705694"><Label>(a)</Label><Text>the group clearer reasonably believes that the entity poses a legal, financial or operational risk to the group clearer; or</Text></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705695" lims:id="705695"><Label>(b)</Label><Text>the entity has breached a substantial term of an agreement entered into with the group clearer for the purposes of clearing and settlement.</Text></Paragraph></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705696" lims:id="705696"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705697" lims:id="705697">Notice</MarginalNote><Label>(2)</Label><Text>The group clearer shall, immediately on ceasing to act,</Text><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705698" lims:id="705698"><Label>(a)</Label><Text>give written notice to the entity of its decision to immediately cease to act for that entity;</Text></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705699" lims:id="705699"><Label>(b)</Label><Text>give notice of its decision to the President;</Text></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705700" lims:id="705700"><Label>(c)</Label><Text>give notice of its decision to the other entities belonging to the group for which it is a group clearer or to every indirect clearer for which it acts as clearing agent, as the case may be; and</Text></Paragraph><Paragraph lims:inforce-start-date="2015-08-01" lims:fid="705701" lims:id="705701"><Label>(d)</Label><Text>in so far as is practicable, to give notice of its decision to the direct clearers and other group clearers.</Text></Paragraph></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705702" lims:id="705702"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705703" lims:id="705703">Notice by the President</MarginalNote><Label>(3)</Label><Text>The President shall give notice to the direct clearers and other group clearers of the group clearer’s decision to immediately cease to act for the entity.</Text></Subsection><Subsection lims:inforce-start-date="2015-08-01" lims:fid="705704" lims:id="705704"><MarginalNote lims:inforce-start-date="2015-08-01" lims:fid="705705" lims:id="705705">Notice by direct clearers and group clearers</MarginalNote><Label>(4)</Label><Text>The direct clearers and other group clearers shall immediately notify every indirect clearer for which they act as a clearing agent or every entity belonging to the group for which they act as a group clearer of that decision.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2015-08-01" lims:fid="705707" lims:id="705707">SOR/2012-161, s. 10; SOR/2015-185, s. 25</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705708" lims:id="705708"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705709" lims:id="705709">Obligation to accept payment items</MarginalNote><Label>44</Label><Text>The group clearer shall accept payment items, including those not giving rise to clearing through the ACSS, drawn on or payable by an entity for which it is ceasing to act or an entity that withdraws from the group for which it acts as group clearer and either effect clearing and settlement or make entries into the ACSS until the final exchange on the business day on which the group clearer ceases to act or on which the entity withdraws.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705710" lims:id="705710" level="2"><Label>DIVISION 5</Label><TitleText>Exchange, Clearing and Settlement</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705711" lims:id="705711" level="3"><TitleText>Exchange</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705712" lims:id="705712"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705713" lims:id="705713">Reception of payment items</MarginalNote><Label>45</Label><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705714" lims:id="705714"><Label>(1)</Label><Text>A direct clearer, group clearer and clearing agent shall receive payment items at every regional exchange point.</Text></Subsection><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705715" lims:id="705715"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705716" lims:id="705716">Use of representative</MarginalNote><Label>(2)</Label><Text>A direct clearer, group clearer, clearing agent or the Bank of Canada may exchange payment items through a direct clearer or group clearer, acting on its behalf.</Text></Subsection><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705717" lims:id="705717"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705718" lims:id="705718">Responsibility</MarginalNote><Label>(3)</Label><Text>The direct clearer, group clearer or clearing agent or the Bank of Canada shall remain responsible to ensure that the payment items are exchanged in accordance with the by-laws and the rules.</Text></Subsection></Section><Section lims:inforce-start-date="2010-03-01" lims:lastAmendedDate="2010-03-01" lims:fid="705719" lims:id="705719"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705720" lims:id="705720">Suspension of exchanges</MarginalNote><Label>46</Label><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705721" lims:id="705721"><Label>(1)</Label><Text>If it becomes impractical to exchange any class of payment items at a particular regional exchange point on a given day, the President may, after consulting the direct clearers, group clearers and the Bank of Canada, suspend the exchange of the class of payment items or of all payment items for the regional exchange point for the current ACSS cycle.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705722" lims:id="705722"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705723" lims:id="705723">Measures</MarginalNote><Label>(2)</Label><Text>Immediately on suspension, the President shall, after consulting the direct clearers, group clearers and the Bank of Canada, take any measures that are necessary in the circumstances.</Text></Subsection><Subsection lims:inforce-start-date="2010-03-01" lims:fid="705724" lims:id="705724"><MarginalNote lims:inforce-start-date="2010-03-01" lims:fid="705725" lims:id="705725">Notification of measures taken</MarginalNote><Label>(3)</Label><Text>The President shall notify the direct clearers, group clearers and the Bank of Canada of the measures taken.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2010-03-01" lims:fid="705727" lims:id="705727">SOR/2010-43, s. 67</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705728" lims:id="705728" level="3"><TitleText>Clearing</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705729" lims:id="705729"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705730" lims:id="705730">Entries</MarginalNote><Label>47</Label><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705731" lims:id="705731"><Label>(1)</Label><Text>Direct clearers, group clearers, clearing agents and the Bank of Canada shall make entries into the ACSS, in accordance with the rules, for the purpose of clearing.</Text></Subsection><Subsection lims:inforce-start-date="2006-03-22" lims:fid="705732" lims:id="705732"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705733" lims:id="705733">Manual clearing</MarginalNote><Label>(2)</Label><Text>In case of a national failure of the ACSS within the meaning of the rules, direct clearers, group clearers, clearing agents and the Bank of Canada shall effect manual clearing in accordance with the rules.</Text></Subsection></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705734" lims:id="705734"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705735" lims:id="705735">Establishment of clearing balances</MarginalNote><Label>48</Label><Text>The Association shall ensure that clearing is effected by the ACSS and clearing balances are made available to the Bank of Canada.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705736" lims:id="705736"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705737" lims:id="705737">Errors in clearing balances</MarginalNote><Label>49</Label><Text>Direct clearers, group clearers and the Bank of Canada shall correct errors in their clearing balances prior to the final adjustment time and in accordance with the rules.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705738" lims:id="705738" level="3"><TitleText>Settlement</TitleText></Heading><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705739" lims:id="705739"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705740" lims:id="705740">Settlement</MarginalNote><Label>50</Label><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705741" lims:id="705741"><Label>(1)</Label><Text>Subject to subsection (2), once the clearing balances have been established by the ACSS and corrected, if necessary, the Bank of Canada shall effect settlement by making the appropriate debit or credit entry into each direct clearer’s or group clearer’s settlement account.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705742" lims:id="705742"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705743" lims:id="705743">Default</MarginalNote><Label>(2)</Label><Text>In the case of a default by a direct clearer or group clearer under paragraph 53(1)(a), the Bank of Canada shall only effect settlement once the contributions by the other direct clearers, group clearers or the Bank of Canada have been made under subsection 57(2) or 57.01(2).</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705745" lims:id="705745">SOR/2018-16, s. 4</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705746" lims:id="705746"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705747" lims:id="705747">Notification of settlement</MarginalNote><Label>51</Label><Text>The Bank of Canada shall notify a direct clearer or group clearer on settlement.</Text></Section><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705748" lims:id="705748"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705749" lims:id="705749">Settlement is final</MarginalNote><Label>52</Label><Text>Settlement at the Bank of Canada is final and shall not be reversed under any circumstances.</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705750" lims:id="705750" level="2"><Label>DIVISION 6</Label><TitleText>Default</TitleText></Heading><Heading lims:inforce-start-date="2018-02-07" lims:fid="705751" lims:id="705751" level="3"><TitleText>Default of Direct Clearer or Group Clearer</TitleText></Heading><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705752" lims:id="705752"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705753" lims:id="705753">Default of direct clearer or group clearer</MarginalNote><Label>53</Label><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705754" lims:id="705754"><Label>(1)</Label><Text>A direct clearer or group clearer is in default for the purposes of this By-law if</Text><Paragraph lims:inforce-start-date="2018-02-07" lims:fid="705755" lims:id="705755"><Label>(a)</Label><Text>its settlement account at the Bank of Canada has a shortfall that would preclude settlement and it does not obtain an advance from the Bank of Canada sufficient for that settlement; or</Text></Paragraph><Paragraph lims:inforce-start-date="2018-02-07" lims:fid="705756" lims:id="705756"><Label>(b)</Label><Text>it is not able to meet its collateral pool pledge requirement as established by section 34.1.</Text></Paragraph></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705757" lims:id="705757"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705758" lims:id="705758">Notice</MarginalNote><Label>(2)</Label><Text>The Bank of Canada shall immediately notify the President of a default and, in the case of a default under paragraph (1)(a), of the amount of the shortfall. The President shall then notify all other direct clearers and group clearers of the default.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705760" lims:id="705760">SOR/2010-43, s. 68; SOR/2018-16, s. 5</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705761" lims:id="705761"><Label>54</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 11]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705762" lims:id="705762"><Label>55</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 11]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705763" lims:id="705763"><Label>56</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 11]</Repealed></Text></Section><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705764" lims:id="705764"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705765" lims:id="705765">Allocation of shortfall</MarginalNote><Label>57</Label><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705766" lims:id="705766"><Label>(1)</Label><Text>Subject to subsection (3), upon receiving notice from the Bank of Canada of a default by a direct clearer or group clearer under paragraph 53(1)(a) and of the amount of the shortfall, the Association shall allocate the shortfall between the direct clearers and group clearers that are not in default by calculating, in accordance with the rules, the default contribution to be made by each of them.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705767" lims:id="705767"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705768" lims:id="705768">Default contribution</MarginalNote><Label>(2)</Label><Text>The direct clearers and group clearers that are not in default shall make a default contribution to the settlement account of the direct clearer or group clearer in default in the amount determined under subsection (1) within the time and in the manner specified by the rules.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705769" lims:id="705769"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705770" lims:id="705770">Limit of contribution</MarginalNote><Label>(3)</Label><Text>The total amount of default contributions under subsection (2) from the direct clearers and group clearers that are not in default shall not exceed the amount of the ACSS collateral pool calculated in subsection 34.1(1), less the amount pledged as collateral by the defaulting direct clearer or group clearer.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705772" lims:id="705772">SOR/2010-43, s. 69(F); SOR/2012-161, s. 12; SOR/2018-16, s. 6</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705773" lims:id="705773"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705774" lims:id="705774">Calculation of additional contribution</MarginalNote><Label>57.01</Label><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705775" lims:id="705775"><Label>(1)</Label><Text>In the event that the default contributions made under section 57 are not sufficient to enable the Bank of Canada to effect settlement, the Association shall calculate, in accordance with the rules, an additional contribution to be made by direct clearers and group clearers that are not in default and by the Bank of Canada to effect settlement.</Text></Subsection><Subsection lims:inforce-start-date="2018-02-07" lims:fid="705776" lims:id="705776"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705777" lims:id="705777">Additional contribution</MarginalNote><Label>(2)</Label><Text>The direct clearers and group clearers that are not in default and the Bank of Canada shall make the additional contribution, in the amount determined under subsection (1), to the account of the direct clearer or group clearer in default within the time and in the manner specified in the rules.</Text></Subsection><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705779" lims:id="705779">SOR/2018-16, s. 6</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2018-02-07" lims:lastAmendedDate="2018-02-07" lims:fid="705780" lims:id="705780"><MarginalNote lims:inforce-start-date="2018-02-07" lims:fid="705781" lims:id="705781">Reimbursement with interest</MarginalNote><Label>57.02</Label><Text>A direct clearer or group clearer shall reimburse each direct clearer, group clearer, or the Bank of Canada for any amount received as a contribution under subsection 57(2) or 57.01(2), plus interest at the rate specified in the rules, and those amounts constitute a debt that survives irrespective of the status of the defaulting direct clearer or group clearer.</Text><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2018-02-07" lims:fid="705783" lims:id="705783">SOR/2018-16, s. 6</HistoricalNoteSubItem></HistoricalNote></Section><Section lims:inforce-start-date="2016-11-02" lims:lastAmendedDate="2016-11-02" lims:fid="705784" lims:id="705784"><MarginalNote lims:inforce-start-date="2016-11-02" lims:fid="705785" lims:id="705785">Prohibition — entries into ACSS</MarginalNote><Label>57.1</Label><Text>A direct clearer or group clearer that is in default shall not make entries into the ACSS unless the direct clearer or group clearer or its assets are under the control or ownership of a federal or provincial regulator or supervisory body or any agent of Her Majesty in right of Canada or agent or mandatary of Her Majesty in right of a province.</Text><HistoricalNote><HistoricalNoteSubItem lims:inforce-start-date="2016-11-02" lims:fid="705787" lims:id="705787">SOR/2016-284, s. 1</HistoricalNoteSubItem></HistoricalNote></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705788" lims:id="705788" level="3"><TitleText>Default of Indirect Clearer</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705789" lims:id="705789"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705790" lims:id="705790">Default of indirect clearer</MarginalNote><Label>58</Label><Text>An indirect clearer is in default in respect of its clearing agent for the purposes of this By-law if</Text><Paragraph lims:inforce-start-date="2006-03-22" lims:fid="705791" lims:id="705791"><Label>(a)</Label><Text>the settlement account of the indirect clearer with its clearing agent has a shortfall that would preclude settlement; and</Text></Paragraph><Paragraph lims:inforce-start-date="2006-03-22" lims:fid="705792" lims:id="705792"><Label>(b)</Label><Text>the indirect clearer does not obtain an advance sufficient for settlement.</Text></Paragraph></Section><Section lims:inforce-start-date="2016-11-02" lims:lastAmendedDate="2016-11-02" lims:fid="705793" lims:id="705793"><Label>59</Label><Text><Repealed>[Repealed, SOR/2016-284, s. 2]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705794" lims:id="705794"><Label>60</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 13]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705795" lims:id="705795"><Label>61</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 13]</Repealed></Text></Section><Section lims:inforce-start-date="2012-08-17" lims:lastAmendedDate="2012-08-17" lims:fid="705796" lims:id="705796"><Label>62</Label><Text><Repealed>[Repealed, SOR/2012-161, s. 13]</Repealed></Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705797" lims:id="705797" level="1"><TitleText>Repeal</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705798" lims:id="705798"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705799" lims:id="705799">Repeal</MarginalNote><Label>63</Label><Text>[Repeal]</Text></Section><Heading lims:inforce-start-date="2018-02-07" lims:fid="705800" lims:id="705800" level="1"><TitleText>Coming into Force</TitleText></Heading><Section lims:inforce-start-date="2006-03-22" lims:lastAmendedDate="2006-03-22" lims:fid="705801" lims:id="705801" type="amending"><MarginalNote lims:inforce-start-date="2006-03-22" lims:fid="705802" lims:id="705802">Coming into force</MarginalNote><Label>64</Label><Text>This By-law comes into force on the day on which it is registered.</Text></Section></Body><RecentAmendments><Amendment><AmendmentCitation>SOR/2025-198</AmendmentCitation><AmendmentDate>2025-09-26</AmendmentDate></Amendment><Amendment><AmendmentCitation>SOR/2021-182</AmendmentCitation><AmendmentDate>2022-06-01</AmendmentDate></Amendment><Amendment><AmendmentCitation>SOR/2021-182</AmendmentCitation><AmendmentDate>2021-08-28</AmendmentDate></Amendment><Amendment><AmendmentCitation>SOR/2020-167</AmendmentCitation><AmendmentDate>2020-07-16</AmendmentDate></Amendment></RecentAmendments></Regulation>