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

Act current to 2019-12-03 and last amended on 2019-06-23. Previous Versions

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

Funding (continued)

Marginal note:Loans to Bank

  •  (1) At the request of the Governor of the Bank, the Minister may, out of the Consolidated Revenue Fund, lend money to the Bank, on the terms and conditions specified by the Minister, for the purpose of assisting the Bank in carrying out its objects as the resolution authority.

  • Marginal note:Total indebtedness

    (2) The total principal indebtedness outstanding at any time in respect of borrowings under subsection (1) shall not exceed $3,200,000,000.

  • Marginal note:Fees for borrowing

    (3) The Minister may fix a fee to be paid by the Bank to the Receiver General in respect of any borrowings by the Bank and the Minister shall notify the Bank in writing of any such fee.

  • 2018, c. 12, s. 234

End of Resolution

Marginal note:Exit plan

  •  (1) For a clearing and settlement system or clearing house that is in resolution, the Bank shall, as soon as feasible, develop an exit plan to end resolution.

  • Marginal note:Consultation

    (2) In developing the exit plan for a clearing and settlement system or a clearing house, the Bank shall consult with the committee established under subsection 11.04(1) and any government authority or regulatory body that has entered into an agreement or arrangement with the Bank under section 13.3 related to that clearing and settlement system.

  • Marginal note:Contents of plan

    (3) The exit plan shall contain, among other things

    • (a) the expected timeline for implementation of the plan;

    • (b) all proposed transactions to restructure the clearing house;

    • (c) the recovery of the costs of the resolution; and

    • (d) the repayment schedule of any loan made under subsection 11.19(1).

  • Marginal note:Canadian Payments Association rules

    (4) In the case of the Canadian Payments Association, the exit plan shall also include any change to the rules made under subsection 19(1) of the Canadian Payments Act since the order was made under paragraph 11.09(1)(a).

  • Marginal note:Prior approval of Minister

    (5) The exit plan shall not be implemented unless it has been approved by the Minister.

  • 2018, c. 12, s. 234

Marginal note:Restructuring transactions

  •  (1) If an order is made under paragraph 11.09(1)(a), the Bank may, in accordance with the exit plan and for the purpose of restructuring the business of the Canadian Payments Association, sell or otherwise alienate all or part of the Association’s assets or carry out any transaction that provides for the assumption by another person or entity of all or part of its liabilities.

  • Marginal note:Restructuring transactions — receivership order

    (2) If an order is made under subparagraph 11.09(1)(b)(i), the Bank may, in accordance with the exit plan and for the purpose of restructuring the business of the clearing house, carry out any transaction, including a transaction that involves the sale or other alienation of all or part of the clearing house’s assets or the assumption by another person or entity of all or part of its liabilities.

  • Marginal note:Restructuring transactions — vesting order

    (3) If an order is made under subparagraph 11.09(1)(b)(ii) the Bank may, in accordance with the exit plan and for the purpose of restructuring the business of the clearing house, carry out any transaction, including a transaction that involves

    • (a) the sale or other alienation of all or part of the shares of the clearing house;

    • (b) the amalgamation of the clearing house;

    • (c) the sale or other alienation by the clearing house of all or part of its assets; or

    • (d) the assumption by another person or entity of all or part of the clearing house’s liabilities.

  • Marginal note:Restrictions inapplicable

    (4) No restriction on the rights of the clearing house, including the right to amalgamate, to sell or otherwise alienate any of its assets or to provide for the assumption of any of its liabilities, other than a restriction provided for in an Act of Parliament, applies so as to prevent the Bank or the clearing house from carrying out a transaction referred to in this section.

  • Marginal note:Transfer of liabilities

    (5) Any person or entity who assumes an obligation or liability of the clearing house under a transaction referred to in any of subsections (1) to (3) becomes liable — instead of the clearing house — in respect of the obligation or liability.

  • 2018, c. 12, s. 234

Marginal note:Liquidator bound

  •  (1) The liquidator of a clearing house appointed under the Winding-up and Restructuring Act is bound by the terms and conditions of any transaction that involves the sale or other alienation of the clearing house’s assets or the assumption by a bridge clearing house of any portion of the clearing house’s liabilities and shall carry out those transactions or cause them to be carried out.

  • Marginal note:Expenses

    (2) All costs, charges and expenses properly incurred by the liquidator in complying with the terms and conditions of any transaction referred to in subsection (1), including the liquidator’s remuneration, are payable by the bridge clearing house.

  • 2018, c. 12, s. 234

Marginal note:Dissolution

  • 2018, c. 12, s. 234

Marginal note:Notice — end of resolution

 If the Bank considers that the exit plan has been substantially implemented, it shall cause a notice to that effect to be published in the Canada Gazette. The notice must specify the day on which the clearing and settlement system or clearing house is no longer in resolution.

  • 2018, c. 12, s. 234

Compensation

Marginal note:No compensation — Canadian Payments Association

 If an order is made under paragraph 11.09(1)(a), neither the Canadian Payments Association nor its members are entitled to compensation as a result of the receivership of the Association.

  • 2018, c. 12, s. 234

Marginal note:Amount of compensation

  •  (1) If an order is made under paragraph 11.09(1)(b) or subsection 11.11(1), the Bank shall, in accordance with the regulations, determine the amount of compensation, if any, to be paid to a prescribed person or entity.

  • Marginal note:Entitlement to compensation

    (2) A person or entity that was a prescribed person or entity at the time a declaration of non-viability was made is entitled to be paid compensation only if they are in a worse financial position than they would have been if

    • (a) in the case of a clearing house incorporated under the Trust and Loan Companies Act, the clearing house had been liquidated under the Winding-up and Restructuring Act at the time a declaration of non-viability was made; or

    • (b) in all other cases, the clearing house had become bankrupt and been liquidated at the time a declaration of non-viability was made and the measures to address financial loss, shortfalls in liquidity or capital adequacy that were specified in its by-laws or rules, or in an arrangement that relates to the clearing and settlement system, were exhausted.

  • Marginal note:Duty to pay compensation

    (3) The Bank shall pay the compensation and shall decide whether to pay it wholly or partly in cash or wholly or partly in any other form, including shares, that the Bank considers appropriate.

  • Marginal note:Compensation not payable

    (4) No compensation is payable under subsection (1) before the 90th day after the day on which the clearing and settlement system or clearing house is no longer in resolution.

  • 2018, c. 12, s. 234
 
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