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Payment Clearing and Settlement Act (S.C. 1996, c. 6, Sch.)

Act current to 2019-08-28 and last amended on 2019-06-23. Previous Versions

PART IClearing and Settlement System Regulation (continued)

Directives (continued)

Marginal note:Representations

  •  (1) Before issuing a directive to a clearing house or a participant, the Governor of the Bank shall provide the clearing house or participant, as the case may be, with an opportunity to make representations.

  • Marginal note:Exception

    (2) If, in the opinion of the Governor of the Bank, providing the clearing house or participant with an opportunity to make representations would undermine the effectiveness of the directive, the Governor of the Bank may, without providing that opportunity, issue a directive under section 6 to the clearing house or participant that has effect for a period of not more than 15 days and may extend the directive once, in writing, for a further period of not more than 15 days.

  • 2017, c. 33, s. 190

Bank Powers

Marginal note:General powers

 The Bank may do all or any of the following things in relation to a designated clearing and settlement system and its clearing house:

  • (a) provide a secured or unsecured guarantee of settlement by participants;

  • (b) make liquidity loans to the clearing house and the central counter-party; and

  • (c) act as the central counter-party to the participants.

Settlement Provisions

Marginal note:Validity, etc.

  •  (1) Despite anything in any statute or other law of Canada or a province, but subject to paragraph 11.07(1)(a) and subject to an order made under section 11.11,

    • (a) the settlement rules of a designated clearing and settlement system are valid and are binding on the clearing house, the participants, a central counter-party and the Bank and any action may be taken or payment made in accordance with the settlement rules;

    • (b) the obligation of a participant, a clearing house or a central counter-party to make payment to a participant and the right of a participant, a clearing house or a central counter-party to receive payment from a participant, a clearing house or a central counter-party shall be netted and a net settlement or close-out amount shall be determined in accordance with the settlement rules, if they so provide; and

    • (c) if a payment is made, property is delivered or an interest in, or in Quebec a right to, property is transferred in accordance with the settlement rules of a designated clearing and settlement system, the payment, delivery or transfer shall not be required to be reversed, repaid or set aside.

  • Marginal note:Payments not subject to set aside provisions

    (2) An entry to or a payment out of the account of a participant, a clearing house or a central counter-party at the Bank to settle a payment obligation in a designated clearing and settlement system shall not be the subject of any provision or order that operates as a stay of that activity.

  • Marginal note:Rights, etc., not subject to stay

    (3) The rights and remedies of a participant, a clearing house, a central counter-party or the Bank in respect of collateral granted to it as security for a payment or the performance of an obligation incurred in a designated clearing and settlement system may not be the subject of any stay provision or order affecting the ability of creditors to exercise rights and remedies with respect to the collateral.

  • Marginal note:Sections 39.15 and 39.152 of Canada Deposit Insurance Corporation Act

    (3.1) Despite subsections (1) to (3) and the settlement rules,

    • (a) no action may be taken in respect of an eligible financial contract, as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act, if it is prevented by subsection 39.15(7.1), (7.104), (7.11), (7.12) or (7.2) or section 39.152 of that Act; and

    • (b) a clearing house, as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act, shall comply with subsection 39.15(3.3) of that Act, shall take any action required by subsection 39.15(7.12) of that Act and shall not take any action prevented by that subsection 39.15(7.12).

  • Marginal note:Application of Canadian law

    (4) Notwithstanding that all or part of the administration or operation of a designated clearing and settlement system is conducted outside Canada or that its settlement rules are governed by the laws of a foreign jurisdiction, where in any judicial proceedings in Canada a court determines that the rights and obligations of any person arising out of or in connection with the operation of the designated clearing and settlement system are governed in whole or in part by Canadian law, the provisions of this section shall be applied to the extent that the Canadian law applies in determining those rights and obligations.

  • Marginal note:Interpretation

    (5) In this section, settlement rules means the rules, however established, that provide the basis on which payment obligations, delivery obligations or other transfers of property or interests in, or in Quebec rights to, property are made, calculated, netted or settled and includes rules for the taking of action in the event that a participant is unable or likely to become unable to meet its obligations to the clearing house, a central counter-party, other participants or the Bank.

  • 1996, c. 6, s. 162 (Sch., s. 8)
  • 1999, c. 28, s. 132(E)
  • 2012, c. 31, s. 169
  • 2016, c. 7, s. 165
  • 2017, c. 33, s. 182
  • 2018, c. 12, s. 233

Notice and Approvals

Marginal note:Significant change

  •  (1) For the purposes of this section, a change is significant if it could reasonably be expected to have a material impact on the efficiency, safety or soundness of the designated clearing and settlement system.

  • Marginal note:Notice required

    (2) A clearing house shall provide the Bank with reasonable notice before making

    • (a) any significant change in relation to the designated clearing and settlement system;

    • (b) any change in relation to the design or operation of the system or to the by-laws, agreements, rules, procedures, guides or other documentation governing the system; or

    • (c) any change to the constating documents and by-laws of the clearing house.

  • Marginal note:Approval required

    (3) If the Governor of the Bank is of the opinion that a significant change that the clearing house intends to make in relation to the designated clearing and settlement system would have an effect on the control of risk for the system, the clearing house, the participants or the financial system in Canada, that change shall not take effect unless it is approved in writing by the Governor, subject to any conditions that the Governor considers appropriate.

  • Marginal note:Notice required of other changes

    (4) A clearing house shall, without delay after it makes any change in relation to the designated clearing and settlement system, other than a change referred to in subsection (2), provide the Bank with written notice of the change, including any change affecting

    • (a) the composition of a board of directors of the clearing house due to resignation or otherwise; or

    • (b) the appointed auditor of the clearing house.

  • 1996, c. 6, s. 162 (Sch., s. 9)
  • 2014, c. 39, s. 366
  • 2017, c. 33, s. 191

Audits and Inspections

Marginal note:Powers of Bank

  •  (1) The Bank may, for the purposes of carrying out its functions under this Act, conduct audits and inspections of a clearing house, and every clearing house shall, as required, assist the Bank to the extent necessary to enable the Bank to carry out an audit or inspection.

  • Marginal note:Powers of Bank

    (2) For the purpose of obtaining evidence under oath in relation to an audit or inspection under subsection (1), the Bank has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act.

PART I.1Clearing and Settlement System Resolution

Scope

Marginal note:Application

 This Part applies in respect of a clearing and settlement system that is designated under subsection 4(1) if its clearing house is located in Canada.

  • 1996, c. 6, s. 162 (Sch., s. 11)
  • 2014, c. 39, s. 367
  • 2018, c. 12, s. 234

Resolution Authority

Marginal note:Resolution Authority

 The Bank is the resolution authority for clearing and settlement systems and clearing houses.

  • 2018, c. 12, s. 234

Marginal note:Objects

 The objects of the Bank as the resolution authority are to

  • (a) pursue the stability of the financial system in Canada;

  • (b) allow for the continuity of critical clearing and settlement system functions; and

  • (c) pursue the objects set out in paragraphs (a) and (b) in a manner that minimizes the exposure of public moneys to loss.

  • 2018, c. 12, s. 234
 
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