Payment Clearing and Settlement Act

Marginal note:Governor may issue

• 6 (1) Where the Governor of the Bank is of the opinion that

  • (a) a clearing house for a designated clearing and settlement system is engaging in or is about to engage in any act, omission or course of conduct,

  • (b) a participant is engaging in or is about to engage in any act, omission or course of conduct with respect to its participation in the designated clearing and settlement system, or

  • (c) the designated clearing and settlement system is operating or is about to operate in a way

  that results or is likely to result in systemic risk being inadequately controlled, the Governor may issue a directive in writing to the clearing house requiring it, within such time as the Governor considers necessary and may specify in the directive, to

  • (d) cease or refrain from engaging in the act, omission or course of conduct or have the participants cease or refrain from engaging in the act, omission or course of conduct, and

  • (e) perform such acts or have the participants perform such acts as in the opinion of the Governor are necessary to remedy the situation.

• Marginal note:Directive to participants

  (2) Where the Governor of the Bank has formed an opinion under subsection (1) that systemic risk is being inadequately controlled and

  • (a) the clearing house fails to comply with a directive that has been issued to it under that subsection,

  • (b) the designated clearing and settlement system does not have a clearing house located in Canada, or

  • (c) in the opinion of the Governor,

    • (i) the systemic risk is being inadequately controlled due to an act, omission or course of conduct by a participant with respect to its participation in the designated clearing and settlement system, and

    • (ii) the act, omission or course of conduct is not subject to the by-laws, agreements, rules, procedures, guides or other documentation governing the designated clearing and settlement system,

  the Governor may issue a directive in writing to the participants requiring them, within such time as the Governor considers necessary and may specify in the directive, to

  • (d) cease or refrain from engaging in certain acts, omissions or courses of conduct with respect to their participation in the designated clearing and settlement system, and

  • (e) perform such acts with respect to their participation as the Governor considers necessary to remedy the situation.

• Marginal note:Directive limited

  (3) For greater certainty, a directive under this section may not be made in respect of

  • (a) the capital adequacy of a participant;

  • (b) the management of its investments;

  • (c) its corporate governance;

  • (d) its relations with customers who are not themselves participants in the designated clearing and settlement system;

  • (e) its ownership structure; or

  • (f) any other matter that is not directly related to its participation in the designated clearing and settlement system.

• Marginal note:Directive may apply to statutory system

  (4) Subject to the approval of the Minister, a directive, if it so provides, applies to a designated clearing and settlement system that is established by or under a statute.