Canadian Payments Act (R.S.C., 1985, c. C-21)

30 [Repealed, 2001, c. 9, s. 240]

Insolvency

Marginal note:Definition of priority payment instrument

• 31 (1) In this section, priority payment instrument means a money order, bank draft or similar instrument issued, directly or indirectly, by a member other than a money order, bank draft or similar instrument issued by a member to another member for the purpose of effecting a payment between those members.

• Marginal note:Priority on insolvency

  (2) Despite any other Act of Parliament but subject to subsection (5) and to the rights of secured creditors with respect to any security interest in or charge on the property of a member, if a bankruptcy order is made against a member or a winding-up order is made in respect of a member (hereinafter in this section referred to as an “insolvent member”) the items set out in paragraphs (a) and (b) shall be paid from the estate of the insolvent member, in priority to any other claim against the estate of the insolvent member, in the following order:

  • (a) unpaid cheques or orders that had been drawn on the insolvent member and certified by such member prior to the making of the bankruptcy order or winding-up order; and

  • (b) unpaid priority payment instruments drawn on the insolvent member and issued prior to the making of the bankruptcy order or winding-up order.

• (3) [Repealed, 1996, c. 6, s. 163]

• Marginal note:Time limit

  (4) Despite subsection (2), no payment of an unpaid cheque, order or priority payment instrument shall be made under that subsection in priority to any other claim against the estate of an insolvent member unless a request for such payment is made within sixty days after the making of the bankruptcy order or winding-up order.

• Marginal note:Preferences

  (5) Subsection (2) shall not be construed or applied to permit an unpaid cheque, an order or a priority payment instrument to be paid in priority to any other claim

  • (a) where the cheque or order had been certified by the insolvent member, or

  • (b) where the priority payment instrument had been issued, directly or indirectly, by the insolvent member,

  with a view to giving the drawee of the cheque, order or unpaid priority instrument a preference over the other creditors of the insolvent member.

• Marginal note:Definition of preference

  (6) In subsection (5), preference means a preference within the meaning of the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act.

• Marginal note:Definition of member

  (7) For purposes of this section, member includes a local that is a member of a central that is a member of the Association.

Marginal note:Insolvency

• 32 (1) No law relating to the insolvency of any body corporate, except Part I.1 of the Payment Clearing and Settlement Act, applies to the Association.

• Marginal note:Winding-up

  (2) No law relating to the winding-up of any body corporate applies to the Association and in no case shall its affairs be wound up unless Parliament so provides.

33 [Repealed, 2001, c. 9, s. 241]

Application of Other Acts

Marginal note:Application of Canada Business Corporations Act

• 34 (1) Subsections 16(1) and 21(1), sections 23, 116, 155, 158, 159, 161, 164 to 166 and 168, subsection 169(1), section 170, subsections 171(7) and (8), section 172 and subsections 257(1) and (2) of the Canada Business Corporations Act apply, with such modifications as the circumstances require, to the Association as if it were a corporation incorporated under that Act.

• Marginal note:Exemption from Canada Not-for-profit Corporations Act

  (2) The Canada Not-for-profit Corporations Act does not apply to the Association.

Regulations

Marginal note:Regulations by Governor in Council

• 35 (1) The Governor in Council may make regulations

  • (a) providing for the mandate of committees established under section 20 or 21, eligibility criteria for membership in those committees and their number of members;

  • (b) respecting the election of directors of the Association, including the eligibility of individuals to be elected as directors, and defining independent for the purposes of paragraph 8(1)(d);

  • (c) prescribing the form and content of the Association’s corporate plans and annual reports, and the time and manner in which they must be prepared or submitted;

  • (d) establishing requirements for membership in the Association to be met by persons or classes of persons;

  • (e) respecting the conditions that a money market mutual fund must satisfy; and

  • (f) generally, for carrying out the purposes and provisions of this Part.

• (2) [Repealed, 2014, c. 39, s. 356]

PART 2Designated Payment Systems

Interpretation

Marginal note:Definitions

36 The definitions in this section apply in this Part.

designated payment system

designated payment system means a payment system designated under subsection 37(1). (système de paiement désigné)

participant

participant means a party to an arrangement in respect of a payment system. (participant)

payment system

payment system means a system or arrangement for the exchange of messages effecting, ordering, enabling or facilitating the making of payments or transfers of value. (système de paiement)

rule

rule means a rule, by whatever name called, that governs a designated payment system. It includes an amendment to or a repeal of a rule. (règles)

Application

Marginal note:Application

36.1 This Part does not apply to the Association.

Designation

Marginal note:Designation by Minister

• 37 (1) The Minister may, if he or she considers that it is in the public interest to do so, designate a payment system that in the opinion of the Minister

  • (a) is national or substantially national in its scope; or

  • (b) plays a major role in supporting transactions in Canadian financial markets or the Canadian economy.

• Marginal note:Factors

  (2) The following factors shall be considered in a determination of whether it is in the public interest to designate a payment system:

  • (a) the level of financial safety provided by the payment system to the participants and users;

  • (b) the efficiency and competitiveness of payment systems in Canada; and

  • (c) the best interests of the financial system in Canada.

• Marginal note:Consultation

  (3) Before a payment system is designated, the Minister shall consult the manager and the participants of the payment system and may consult interested parties, with respect to the effect of the designation.

• Marginal note:Notice

  (4) The Minister shall notify the manager and the participants of a designated payment system in any manner that the Minister considers appropriate.

• Marginal note:Designation not statutory instrument

  (5) A designation is not a statutory instrument for the purposes of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

Rules

Marginal note:Copies of rules to be sent to Minister

• 38 (1) A copy of every rule governing a designated payment system shall be sent by the manager of the designated payment system or, if there is none, by the participants to the Minister

  • (a) in the case of a rule made before the designation of the payment system, within 30 days after the designation; and

  • (b) in the case of a rule made after the designation, within 10 days after it is made.

• Marginal note:Effective date of rule

  (2) A rule, other than a rule referred to in paragraph (1)(a), does not come into force before the thirtieth day after a copy of it is sent to the Minister under subsection (1), but the Minister may declare the rule to be in force at any time before that period expires.

• Marginal note:Extension of time

  (3) If the Minister is of the opinion that an extension of the period mentioned in subsection (2) is necessary to permit adequate review of a rule, the Minister may within 10 days after its receipt, on written notice to the sender of the rule, extend that period by up to 30 days.

• Marginal note:Disallowance

  (4) The Minister may disallow the whole or a part of a rule.

• Marginal note:Exemption

  (5) The Minister may exempt a designated payment system from the application of subsection (2).

Guidelines and Directives

Marginal note:Minister may issue guidelines

• 39 (1) The Minister may issue guidelines in respect of any matter relating to the administration or enforcement of this Part.

• Marginal note:Guidelines public

  (2) Guidelines shall be made available to the public and the Minister shall give notice of them in any manner that the Minister considers appropriate.

Marginal note:Minister may issue directive

• 40 (1) The Minister may issue a written directive to the manager or a participant of a designated payment system in respect of

  • (a) the conditions an entity must meet to become a participant in the designated payment system;

  • (b) the operation of the designated payment system;

  • (c) the interaction of the designated payment system with other payment systems; or

  • (d) the relationship of the designated payment system with users.

• Marginal note:Consultation

  (2) Before giving a directive, the Minister shall consult the person to whom it is to be given, and may consult any interested party, with respect to the content and effect of the directive.

• Marginal note:Content

  (3) The Minister may specify in a directive that a manager of a designated payment system or a participant shall, within such time as the Minister considers necessary,

  • (a) cease or refrain from engaging in an act or course of conduct;

  • (b) perform such acts as in the opinion of the Minister are necessary in the public interest; or

  • (c) make, amend or repeal a rule.

• Marginal note:Notification of implementation

  (4) As soon as is practicable after implementing a directive and completing any actions required to be taken in connection with it, the person to whom it is given shall notify the Minister that the directive has been implemented and the action completed.

• Marginal note:Directive not statutory instrument

  (5) A directive is not a statutory instrument for the purposes of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

• Marginal note:Duty to comply

  (6) A directive is binding on the person to whom it is given.

Information Requirements

Marginal note:Information requests

• 41 (1) If the Minister requires information in order to determine whether a payment system should be designated under subsection 37(1), the Minister may request that the manager of the payment system or a participant provide the Minister with any information and documents regarding the system that the Minister may require.

• Marginal note:Ongoing information requests

  (2) Every manager of a designated payment system or, if there is none, the participants shall, in respect of the designated payment system, provide the Minister with such information and documents as the Minister may from time to time request.

• Marginal note:Compliance with request required

  (3) Every person to whom a request is directed shall comply with the request.

Participants

Marginal note:Responsibility if foreign system manager

• 42 (1) If a designated payment system does not have a Canadian manager, the Canadian participants

  • (a) shall comply with the obligations imposed under this Part on a manager of a designated payment system, and

  • (b) have all the rights conferred by this Part on a manager of a designated payment system

  in the same manner and to the same extent as if the Canadian participants were the manager of the designated payment system on which those obligations and rights are imposed or conferred and, for that purpose, any action that the Minister may take in respect of the manager of the designated payment system may only be taken in respect of its Canadian participants.

• Marginal note:Failure to comply of system manager

  (2) If a manager of a designated payment system fails to comply with the obligations imposed on it under this Part in respect of the designated payment system or otherwise contravenes this Part, the participants jointly and severally shall comply with those obligations or are liable for the contravention in the same manner and to the same extent as the manager.

• Marginal note:Interpretation

  (3) In subsection (1), a manager of a designated payment system or a participant is “Canadian” if the manager or participant is incorporated or formed under the laws of Canada or a province.