Winding-up and Restructuring Act

Marginal note:Permitted actions

• 22.1 (1) Nothing in this Act or an order made under this Act prevents or prohibits the following actions from being taken in accordance with the provisions of an eligible financial contract:

  • (a) the termination of the contract;

  • (b) the netting or setting off or compensation of obligations between a company in respect of which winding-up proceedings under this Act are commenced and another party to the contract; and

  • (c) any dealing with financial collateral including

    • (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and

    • (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral.

• Marginal note:Net termination values

  (1.01) If the net termination values determined in accordance with the eligible financial contract referred to in subsection (1) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim provable against the company in respect of the net termination values.

• Marginal note:Application to authorized foreign banks

  (1.1) In its application to authorized foreign banks, subsection (1) only applies to the eligible financial contracts and obligations between the authorized foreign bank, in respect of its business in Canada, and another party.

• Marginal note:Definitions

  (2) In subsection (1),

  eligible financial contract

  eligible financial contract means an agreement of a prescribed kind; (contrat financier admissible)

  financial collateral

  financial collateral means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

  • (a) cash or cash equivalents, including negotiable instruments and demand deposits,

  • (b) securities, a securities account, a securities entitlement or a right to acquire securities, or

  • (c) a futures agreement or a futures account; (garantie financière)

  net termination value

  net termination value means the net amount obtained after setting off the mutual obligations between the parties to an eligible financial contract in accordance with its provisions; (valeurs nettes dues à la date de résiliation)

  title transfer credit support agreement

  title transfer credit support agreement means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract. (accord de transfert de titres pour obtention de crédit)

• Marginal note:Regulations

  (3) The Governor in Council may make regulations prescribing kinds of agreements for the purposes of the definition eligible financial contract in subsection (2).