Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System

Marginal note:Allocation of shortfall

• 57 (1) Upon receiving notice from the Bank of Canada that a direct clearer or group clearer is in default, the direct clearers and group clearers that are not in default and the Bank of Canada shall each deposit into the defaulting direct clearer’s or group clearer’s settlement account the amount determined by the formula

  A x B/C

  where, for a given direct clearer or group clearer that is not in default or the Bank of Canada,

  A

  is the amount of the shortfall;

  B

  is the value of the payment items that the given direct clearer or group clearer or the Bank of Canada entered into the ACSS during the ACSS cycle prior to the default and that are drawn on or payable by the direct clearer or group clearer that is in default; and

  C

  is the total value of payment items that were entered into the ACSS during that cycle by all direct clearers and group clearers that are not in default and by the Bank of Canada and that are drawn on or payable by the direct clearer or group clearer that is in default.

• Marginal note:Interest

  (2) The amount deposited in accordance with subsection (1) shall bear interest at the rate specified in the rules.

• Marginal note:Right of recovery

  (3) The amount deposited and the interest on it constitute a debt that is immediately due and payable by the direct clearer or group clearer that is in default to the direct clearer, group clearer or the Bank of Canada, as the case may be.