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

Act current to 2022-07-13 and last amended on 2021-06-29. Previous Versions

PART IIGeneral (continued)

Agreements

Marginal note:Clearing house or participant

 The Bank may enter into an agreement with a clearing house or a participant, or both, in respect of

  • (a) netting arrangements;

  • (b) risk-sharing and risk-control mecha­nisms;

  • (c) certainty of settlement and finality of payment;

  • (d) the nature of financial arrangements among participants;

  • (e) the operational systems and financial soundness of the clearing house;

  • (e.1) the exercise of the Bank’s powers and the performance of its duties and functions; and

  • (f) any other matters pertaining to systemic risk or payments system risk.

  • 2014, c. 39, s. 369
  • 2017, c. 33, s. 192

Marginal note:Cooperation

 The Bank may enter into an agreement or arrangement with any government authority or regulatory body for the purpose of consulting, sharing information and coordinating their actions with respect to clearing and settlement systems.

  • 2014, c. 39, s. 369

Information Requirements

Marginal note:Information requests — systems or arrangements

  •  (1) If the Governor of the Bank has reasonable grounds to believe that a system or arrangement exists for the clearing or settlement of payment obligations or for the exchange of payment messages for the purpose of clearing or settlement of payment obligations but requires further information in order to determine whether the system or arrangement is a clearing and settlement system, the Governor may, with the agreement of the Minister, request a person who is a party to the system or arrangement to provide the Bank with such information and documents regarding the system or arrangement as the Governor may require to make the determination.

  • Marginal note:Compliance with request required

    (2) Every person to whom a request is directed under subsection (1) shall comply with the request.

  • Marginal note:Risk information

    (3) Every clearing house shall provide the Bank with any information and documents that the Governor of the Bank may require to enable them to determine whether the clearing and settlement system poses a systemic risk or payments system risk, including

    • (a) the names of its participants;

    • (b) copies of its constating documents, by-laws, resolutions, agreements, rules, procedures and other documents governing its establishment and operation;

    • (c) the names of its directors, committee members and auditors;

    • (d) copies of its reports, statements or other documents that are required to be filed with any government authority or regulatory body; and

    • (e) copies of its financial statements.

Enforcement

Marginal note:Compliance orders

  •  (1) The Bank or the Governor of the Bank may apply to a superior court for an order

    • (a) directing a clearing house or participant to comply with this Act, a directive issued under this Act or an agreement that it has entered into under section 13.2, if the clearing house or participant has failed to comply with this Act, the directive or the agreement, as the case may be;

    • (b) directing a person to comply with a request made under subsection 14(1), if the person has failed to comply with the request; or

    • (c) directing a person to comply with a prohibition or to respect a condition imposed under this Act, if the person has failed to comply with the prohibition or to respect the condition.

  • Marginal note:Powers of the court

    (2) The court may make any order referred to in subsection (1) and may also make any further order that it considers appropriate.

  • 1996, c. 6, s. 162 (Sch., s. 15)
  • 2012, c. 5, s. 214
  • 2014, c. 39, s. 371

Marginal note:Offence and punishment

 Every person who, without reasonable cause, contravenes any provision of this Act is guilty of an offence and

  • (a) in the case of a natural person, liable on summary conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding twelve months, or to both; or

  • (b) in the case of any other entity, liable on summary conviction to a fine not exceeding $500,000.

Guidelines

Marginal note:Governor or Bank may issue

 The Governor of the Bank or the Bank may issue guidelines in respect of any matter relating to the administration or enforcement of this Act.

Disclosure of Information

Marginal note:Information confidential

  •  (1) Information obtained under this Act is confidential and shall be treated accordingly.

  • Marginal note:Disclosure permitted

    (2) Nothing in subsection (1) prevents the Bank from disclosing any information, if the Bank is satisfied that the information will be treated as confidential by the authority, body or person to which it is disclosed,

    • (a) to any government authority or regulatory body charged with the regulation of

      • (i) financial institutions, as defined in section 2 of the Trust and Loan Companies Act, for purposes related to that regulation, or

      • (ii) entities that provide clearing or settlement services in connection with securities transactions or eligible financial contracts, for purposes related to that regulation; and

    • (b) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Chief Executive Officer of the Canada Deposit Insurance Corporation or any other officer of that Corporation authorized in writing by the Chief Executive Officer.

  • Marginal note:Disclosure permitted

    (3) Nothing in subsection (1) prevents the Bank from disclosing any information regarding a clearing and settlement system that the Bank has designated under subsection 4(1) to any government authority or regulatory body charged with the regulation of systems or arrangements for the clearing or settlement of payment obligations or for the exchange of payment messages for the purpose of clearing or settlement of payment obligations, for purposes related to that regulation, if the Bank is satisfied that the information will be treated as confidential by the authority or body to which it is disclosed.

  • Marginal note:Disclosure outside Canada

    (4) Before the Bank discloses information to a government authority or regulatory body outside Canada, the Bank shall enter into an arrangement or agreement with the authority or body regarding the terms of the disclosure.

  • 1996, c. 6, s. 162 (Sch., s. 18)
  • 2012, c. 5, s. 215
  • 2014, c. 39, s. 372
  • 2016, c. 7, s. 178
  • 2021, c. 23, s. 137

Marginal note:No disclosure

 Subject to the regulations, a clearing house shall not disclose oversight information.

Marginal note:Evidentiary privilege

  •  (1) Oversight information shall not be used as evidence in any civil proceedings and is privileged for that purpose.

  • Marginal note:No testimony or production

    (2) No person shall by an order of any court, tribunal or other body be required in any civil proceedings to give oral testimony or to produce any document relating to any oversight information.

  • Marginal note:Exceptions to subsection (1)

    (3) Despite subsection (1),

    • (a) the Minister, the Governor of the Bank, the Bank or the Attorney General of Canada may, subject to the regulations, use oversight information as evidence in any proceedings; and

    • (b) a clearing house may, subject to the regulations, use oversight information as evidence in any proceedings in relation to the administration or enforcement of this Act, the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act or the Winding-up and Restructuring Act that are commenced by the Minister, the Bank or the Attorney General of Canada.

  • Marginal note:Exceptions to subsections (1) and (2)

    (4) Despite subsections (1) and (2), a court, tribunal or other body may, by order, require the Minister, the Governor of the Bank, the Bank or a clearing house to give oral testimony or to produce any document relating to any oversight information in any civil proceedings in relation to the administration or enforcement of this Act that are commenced by the Minister, the Governor of the Bank, the Bank or the Attorney General of Canada.

  • Marginal note:No waiver

    (5) The disclosure of any oversight information, other than under subsection (3) or (4), does not constitute a waiver of the privilege referred to in subsection (1).

Statutory Instruments Act

Marginal note:Statutory Instruments Act

 A designation under subsection 4(1), a directive issued under this Act, a declaration of non-viability made under subsection 11.06(1), a direction given under subsection 11.1(6) or an order made under subsection 11.09(1) or 11.11(1) is not a statutory instrument for the purposes of the Statutory Instruments Act.

Liability

Marginal note:No liability if in good faith

 No action lies against Her Majesty, the Minister, the Bank, any officer, employee or director of the Bank or any person acting under the direction of the Governor of the Bank for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under this Act are intended or authorized to be executed or performed.

  • 1996, c. 6, s. 162 (Sch., s. 20)
  • 1999, c. 28, s. 134

Judicial Review

Marginal note:No stay on judicial review

 On an application for judicial review under the Federal Courts Act of any designation under subsection 4(1) or of any directive issued under this Act, no stay of the designation or directive shall be granted pending the final disposition of the application.

  • 1996, c. 6, s. 162 (Sch., s. 21)
  • 2002, c. 8, s. 182

Participants

Marginal note:Participants responsible where no clearing house

  •  (1) Where a clearing and settlement system does not have a clearing house located in Canada, the Canadian participants

    • (a) shall comply with the obligations imposed under this Act on a clearing house in respect of a clearing and settlement system, and

    • (b) have all the rights conferred by this Act on a clearing house in respect of a clearing and settlement system

    in the same manner and to the same extent as if the Canadian participants were the clearing house on which those obligations and rights are imposed or conferred and, for that purpose, any action that the Bank may take in respect of a clearing house may only be taken in respect of the Canadian participants.

  • Marginal note:Participants responsible where clearing house fails to comply, etc.

    (2) Where a clearing house fails to comply with the obligations imposed on it under this Act in respect of its clearing and settlement system or otherwise contravenes this Act, 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 if the participants were the clearing house on which the obligations are imposed or that committed the contravention.

  • (3) [Repealed, 2012, c. 5, s. 216]

  • 1996, c. 6, s. 162 (Sch., s. 22)
  • 2012, c. 5, s. 216

Marginal note:Foreign participation

  •  (1) An authorized foreign bank or foreign institution that is or wishes to be a participant in a designated clearing and settlement system shall provide the Governor of the Bank with any information regarding the application of foreign laws to the authorized foreign bank or foreign institution that the Governor considers necessary.

  • Marginal note:Prohibition or conditions

    (2) The Governor of the Bank may prohibit the authorized foreign bank or foreign institution from being a participant in the designated clearing and settlement system or may require it to comply with any conditions with respect to its participation that the Governor considers necessary if the Governor is of the opinion, on the basis of the information provided under subsection (1) or of any other information that the Governor considers relevant, that its participation could pose a systemic risk or a payments system risk or could pose an unacceptable risk to the Bank in guaranteeing settlement of the authorized foreign bank’s or foreign institution’s obligations.

  • Marginal note:Powers of Governor of Bank

    (3) The Governor’s powers under subsection (2) are in addition to all other powers conferred on the Governor and the Bank by this Act.

  • Marginal note:Definitions

    (4) The definitions in this subsection apply in this section.

    authorized foreign bank

    authorized foreign bank means an authorized foreign bank within the meaning of section 2 of the Bank Act. (banque étrangère autorisée)

    designated clearing and settlement system

    designated clearing and settlement system[Repealed, 2014, c. 39, s. 373]

    foreign institution

    foreign institution means a foreign institution within the meaning of section 2 of the Bank Act. (institution étrangère)

  • 1999, c. 28, s. 135
  • 2014, c. 39, s. 373
  • 2017, c. 33, s. 193

Marginal note:Information

 A participant is not required to provide information to the Bank under this Act concerning another participant of a clearing and settlement system if that information is not available to all the participants.

Regulations

Marginal note:Regulations

 The Governor in Council may make regulations

  • (a) providing for rules concerning conflicts of interest for the purpose of subsection 11.04(6);

  • (b) respecting resolution plans and the requirement that the Bank develop and maintain them under subsection 11.05(1);

  • (c) respecting what constitutes a service that is critical to the operation of the clearing and settlement system or of the clearing house for the purposes of paragraph 11.07(1)(f);

  • (d) respecting what constitutes a limited clearing member for the purposes of subsection 11.11(4);

  • (e) for the purpose of section 11.18, respecting what constitutes costs of the resolution and the recovery of those costs, including to specify the persons or entities from which costs may be recovered;

  • (f) respecting the compensation for the purposes of sections 11.26 to 11.3, including to

    • (i) prescribe persons or entities referred to in subsection 11.26(1),

    • (ii) provide for the factors that the Bank shall or shall not consider in making a decision under subsection 11.26(1),

    • (iii) provide for the circumstances in which any shares or other right or interest received by another person or entity as a result of an order made under paragraph 11.09(1)(b) or retained by another person or entity may be taken into account in determining the amount of compensation to which a prescribed person or entity is entitled,

    • (iv) prescribe the circumstances in which an assessor must be appointed under section 11.28,

    • (v) provide for the factors that an assessor shall or shall not consider in making a decision, and

    • (vi) provide for procedural requirements;

  • (g) prescribing collateral for the purpose of paragraph (e) of the definition financial collateral in subsection 13(2);

  • (h) respecting what constitutes oversight information for the purposes of sections 18.1 and 18.2;

  • (i) respecting the disclosure of oversight information for the purposes of section 18.1; and

  • (j) respecting the circumstances in which oversight information may be used as evidence for the purposes of subsection 18.2(3).

 
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