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

Rights and Duties of Members

Marginal note:Members

29 Members may present payment items and shall accept and arrange for settlement of payment items in accordance with the by-laws and the rules.

30 [Repealed, 2001, c. 9, s. 240]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• (3) [Repealed, 1996, c. 6, s. 163]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 persons 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.