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

Act current to 2019-08-15 and last amended on 2019-06-23. Previous Versions

PART I.1Clearing and Settlement System Resolution (continued)

Vesting and Receivership (continued)

Marginal note:Additional powers

  •  (1) If the Governor of the Bank has made an order under subsection 11.09(1), the Governor may, by order,

    • (a) require any participant to make a contribution of cash or cash equivalents to the clearing house within a specified time;

    • (b) reduce the amount of a variation margin gain returnable to a participant;

    • (c) require any participant to make a contribution to the clearing house’s default fund within a specified time;

    • (d) transfer a contract between the clearing house or the central counter-party and a participant to another participant;

    • (e) terminate or liquidate a contract, in whole or in part, between the clearing house or the central counter-party and a participant;

    • (f) write-down fully or partially the equity of the shareholders, partners or owners of the clearing house; or

    • (g) take any measures that the Governor of the Bank considers necessary to allocate among the participants the amount of the shortfall due to the clearing house.

  • Marginal note:Condition precedent

    (2) The Governor of the Bank shall only make an order under subsection (1) if the Governor is of the opinion that the order is necessary for the stability of the financial system in Canada.

  • Marginal note:Effect of transfer of contract

    (3) If a contract is transferred under paragraph (1)(d), the Bank shall transfer all of

    • (a) the clearing house’s or the central counter-party’s obligations arising from the contract; and

    • (b) the clearing house’s or the central counter-party’s interest or right in property that secures its obligations under the contract.

  • Marginal note:Non-application

    (4) An order made under any of paragraphs (1)(a) to (e) or (g) does not apply in respect of a participant that is a limited clearing member within the meaning of the regulations.

  • Marginal note:For greater certainty

    (5) For greater certainty, an order is not necessary for any of the actions described under subsection (1) if those actions are provided for under the settlement rules as defined in subsection 8(5).

  • Marginal note:Order and action final

    (6) An order made under subsection (1) and any action taken or decision made in furtherance of the order are for all purposes final.

  • Marginal note:Notice

    (7) After an order is made under subsection (1), the Governor of the Bank shall, without delay, notify

    • (a) the Minister;

    • (b) the committee established under subsection 11.04(1);

    • (c) the clearing house; and

    • (d) any government authority or regulatory body that has entered into an agreement or arrangement with the Bank under section 13.3 related to the clearing and settlement system.

  • Marginal note:Publication

    (8) The Governor of the Bank shall cause a copy of the order to be published in the Canada Gazette.

  • 2018, c. 12, s. 234

Bridge Clearing Houses

Marginal note:Request to Minister

  •  (1) The Governor of the Bank may request the Minister to issue letters patent incorporating a company under the Trust and Loan Companies Act.

  • Marginal note:Order to commence and carry on business

    (2) The Superintendent of Financial Institutions shall, without delay after the letters patent are issued, make an order approving the commencement and carrying on of business by the company.

  • 2018, c. 12, s. 234

Marginal note:Power of Governor of Bank

  •  (1) If the Bank is the sole shareholder, the Governor of the Bank may designate as a bridge clearing house a corporation incorporated under the Canada Business Corporations Act or a company referred to in section 11.12.

  • Marginal note:Termination of designation

    (2) A corporation’s or company’s designation as a bridge clearing house terminates if

    • (a) the Bank is no longer the sole shareholder; or

    • (b) the corporation or company is amalgamated with a body corporate that is not a bridge clearing house.

  • Marginal note:For greater certainty — not a Crown corporation

    (3) For greater certainty, a bridge clearing house is not a Crown corporation, as defined in subsection 83(1) of the Financial Administration Act.

  • 2018, c. 12, s. 234

Marginal note:Terms and conditions of transactions

  •  (1) If the Bank, as receiver for a clearing house, carries out a transaction with a bridge clearing house, the Bank shall establish the terms and conditions of the transaction, including

    • (a) which assets the bridge clearing house shall acquire and the consideration to be paid for them; and

    • (b) which liabilities the bridge clearing house shall assume and the consideration to be paid for them.

  • Marginal note:Reasonable consideration

    (2) The consideration referred to in paragraph (1)(a) shall be reasonable in the circumstances.

  • 2018, c. 12, s. 234

Non-application of Certain Legislative Provisions

Marginal note:Canadian Payments Act

  •  (1) The application of sections 4.1, 8 to 16.1, 19.2, 19.3, 20 and 22 to 25 of the Canadian Payments Act is suspended while the Canadian Payments Association is in resolution.

  • Marginal note:Canadian Payments Association rules

    (2) If an exit plan is approved by the Minister, the changes to the rules included in the exit plan under subsection 11.2(4) are not subject to section 19.2 of the Canadian Payments Act.

  • 2018, c. 12, s. 234

Marginal note:Trust and Loan Companies Act

 Sections 375, 375.1, 376, 379 and 396 and subsection 399(2) of the Trust and Loan Companies Act do not apply in respect of:

  • (a) a clearing house incorporated under that Act that is in resolution; or

  • (b) a bridge clearing house incorporated under that Act.

  • 2018, c. 12, s. 234

Marginal note:Order — Canadian Payments Act

  •  (1) If an order is made under paragraph 11.09(1)(a), the Governor in Council may, by order, suspend the application of any provision of Part 1 of the Canadian Payments Act until the day on which the clearing and settlement system or clearing house is no longer in resolution.

  • Marginal note:Order — other Acts

    (2) The Governor in Council may, by order, exempt a clearing house that is in resolution or a bridge clearing house from the application of any provision of the Trust and Loan Companies Act or the Canada Business Corporations Act or the regulations made under them. The order ceases to be in effect on the day on which, as the case may be,

    • (a) the clearing house is no longer in resolution; or

    • (b) the designation of the corporation as a bridge clearing house terminates.

  • 2018, c. 12, s. 234

Funding

Marginal note:Cost recovery

 The Bank may, in accordance with the regulations, recover the costs of the resolution of a clearing and settlement system or a clearing house.

  • 2018, c. 12, s. 234
 
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