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

Act current to 2019-06-20 and last amended on 2017-12-14. Previous Versions

PART IIGeneral (continued)

Netting Agreements

Marginal note:Termination

  •  (1) Despite anything in any law relating to bankruptcy or insolvency or any order of a court made in respect of a reorganization, arrangement or receivership involving insolvency, a party to a netting agreement may terminate the agreement and determine a net termination value or net settlement amount in accordance with the provisions of the agreement and the party entitled to the net termination value or net settlement amount is to be a creditor of the party owing the net termination value or net settlement amount for that value or amount.

  • Marginal note:Eligible financial contract

    (1.1) If a netting agreement referred to in subsection (1) is an eligible financial contract, a party to the agreement may also, in accordance with the provisions of that agreement, deal with financial collateral including

    • (a) selling or foreclosing or, in the Province of Quebec, surrendering financial collateral; and

    • (b) setting off or compensating financial collateral or applying the proceeds or value of financial collateral.

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

    (1.2) Despite subsections (1) and (1.1), 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.

  • Marginal note:Interpretation

    (2) The following definitions apply in this section.

    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,

    • (c) a futures agreement or a futures account,

    • (d) an assignment of a right to payment or delivery against a clearing house, or

    • (e) any other collateral that is prescribed. (garantie financière)

    financial institution

    financial institution means

    • (a) a financial institution within the meaning of section 2 of the Trust and Loan Companies Act,

    • (b) such other entity or entity within a class of entities engaged primarily in the business of providing financial services as may be designated by order of the Governor in Council to be a financial institution for the purposes of this section,

    • (c) a trustee, manager or administrator of a pension fund maintained to provide benefits under a pension plan registered under the Income Tax Act,

    • (d) the Canada Pension Plan Investment Board, or

    • (e) the Public Sector Pension Investment Board. (institution financière)

    net termination value

    net termination value means the net amount obtained after setting off or compensating or otherwise netting the obligations between the parties to a netting agreement in accordance with its provisions. (reliquat net)

    netting agreement

    netting agreement means an agreement between two or more financial institutions, between the Bank and one or more financial institutions or between a participant and a customer to which the participant provides clearing services that is

    • (a) an eligible financial contract; or

    • (b) an agreement that provides for the netting or set-off or compensation of present or future obligations to make payments against the present or future rights to receive payments. (accord de compensation)

    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)

  • 1996, c. 6, s. 162 (Sch., s. 13)
  • 1997, c. 40, s. 109
  • 1999, c. 28, s. 133, c. 34, s. 228
  • 2007, c. 29, s. 111
  • 2012, c. 31, s. 170
  • 2016, c. 7, s. 166
  • 2017, c. 33, s. 183

Securities and Derivatives Clearing Houses

Marginal note:Securities and derivatives clearing houses

  •  (1) Nothing in any law relating to bankruptcy or insolvency or in any order of a court made in respect of the administration of a reorganization, arrangement or receivership involving insolvency, including in any foreign law or order of a foreign court, has the effect of

    • (a) preventing a securities and derivatives clearing house from

      • (i) if it is a party to a netting agreement, terminating the agreement and determining a net termination value or net settlement amount in accordance with the provisions of the agreement, with the party entitled to the value or amount becoming a creditor of the party owing the value or amount for that value or amount, or

      • (ii) acting in accordance with any of its rules that provide the basis on which payment and delivery obligations are calculated, netted and settled; or

    • (b) interfering with the rights or remedies of a securities and derivatives clearing house in respect of any collateral that has been granted to it as security for the performance of an obligation incurred in respect of the clearing and settlement services provided by the securities and derivatives clearing house.

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

    (1.1) Despite subsection (1), 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.

  • Marginal note:Designation by Minister

    (2) For the purpose of this section, the Minister may designate an entity, other than one mentioned in paragraph (a), (b) or (c) of the definition securities and derivatives clearing house in subsection (3), as a securities and derivatives clearing house if

    • (a) the Minister is of the opinion that it is in the public interest to do so; and

    • (b) the entity provides clearing and settlement services to its clearing members in respect of transactions that involve securities or derivatives.

  • Marginal note:Definitions

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

    clearing member

    clearing member means a person who uses the services of a securities and derivatives clearing house. (membre)

    net termination value

    net termination value means the net amount obtained after setting off or compensating or otherwise netting the obligations between a securities and derivatives clearing house and a clearing member in accordance with the netting agreement. (reliquat net)

    netting agreement

    netting agreement means an agreement between a securities and derivatives clearing house and a clearing member that is

    • (a) an eligible financial contract; or

    • (b) an agreement that provides for the netting or setting off or compensation of present or future obligations to make payments or deliveries against present or future rights to receive payments or take deliveries. (accord de compensation)

    securities and derivatives clearing house

    securities and derivatives clearing house means, in addition to an entity designated under subsection (2),

    • (a) the Canadian Derivatives Clearing Corporation, incorporated under the Canada Business Corporations Act;

    • (b) the CDS Clearing and Depository Services Inc., a corporation incorporated under the Canada Business Corporations Act; or

    • (c) the WCE Clearing Corporation, incorporated under The Corporations Act, chapter C225 of the Re-enacted Statutes of Manitoba 1987. (chambre spécialisée)

  • 2002, c. 14, s. 1
  • 2007, c. 6, s. 442, c. 29, s. 112
  • 2012, c. 31, s. 171
  • 2016, c. 7, s. 167
  • 2017, c. 33, s. 184
 
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