Canadian Payments Association By-law No. 10 — RTR (SOR/2026-133)

Suspension of Approval

Marginal note:Suspension — access to settlement account

17 The President must suspend an approval provided under section 16 if the Bank notifies the President that the direct settlement participant no longer has access to the settlement account referred to in paragraph 16(2)(a).

Marginal note:Suspension — other

• 18 (1) The President may suspend an approval provided under section 16 if the direct settlement participant

  • (a) no longer meets the technical, operational, security, settlement account funding or testing requirements set out in the Rules that are applicable to settlement agents; or

  • (b) fails to pay a fee that is applicable to settlement agents set out in a by-law or the Rules.

• Marginal note:Prior notice to Bank

  (2) Before making a suspension, the President must provide the Bank with notice of the intention to make the suspension.

Marginal note:Notice to participants

19 After making a suspension under section 17 or 18, the President must

• (a) without delay, notify the direct settlement participant that its approval under section 16 is suspended; and

• (b) as soon as feasible, notify all other participants of the suspension.

Revocation of Approval

Marginal note:Revocation by Board

• 20 (1) The Board may revoke an approval provided under section 16 if the direct settlement participant

  • (a) no longer has access to the settlement account used in relation to its activities as a settlement agent;

  • (b) no longer meets the technical, operational, security, settlement account funding or testing requirements set out in the Rules that are applicable to settlement agents; or

  • (c) fails to pay a fee that is applicable to settlement agents set out in a by-law or the Rules.

• Marginal note:Prior notice to Bank

  (2) Before making a revocation, the Board must provide the Bank with notice of the intention to make the revocation.

• Marginal note:Notice by President

  (3) After the Board makes a revocation, the President must

  • (a) without delay, notify the direct settlement participant that its approval under section 16 is revoked; and

  • (b) as soon as feasible, notify all participants of the revocation.

Reinstatement of Approval

Marginal note:Application

• 21 (1) A direct settlement participant whose approval under section 16 is suspended under section 17 or 18 or revoked under section 20 may, in the form and manner set out in the Rules, make an application to the President to have that approval reinstated.

• Marginal note:Reinstatement

  (2) The President must reinstate the approval if the application demonstrates that the circumstances giving rise to the suspension or revocation no longer exist.

Designation

Marginal note:Designation of settlement agents

• 22 (1) Subject to subsection (6), an indirect settlement participant must, in accordance with the Rules, designate

  • (a) for the RTR Exchange, one settlement agent to act on its behalf in respect of RTR payment obligations set out in RTR payment messages; and

  • (b) for each third-party exchange in which it exchanges payment messages, one settlement agent to act on its behalf in respect of RTR payment obligations set out in those payment messages.

• Marginal note:Multiple designations

  (2) A settlement agent may be designated in respect of more than one payment exchange referred to in subsection (1).

• Marginal note:Identification of payment exchange

  (3) The designation must identify each payment exchange in respect of which it is made.

• Marginal note:Prior notice

  (4) A settlement agent must, for each payment exchange in respect of which the designation is made, provide written notice to the Association, in the form and manner set out in the Rules, before acting for the first time on behalf of the indirect settlement participant in respect of the payment exchange.

• Marginal note:New designation required

  (5) The indirect settlement participant must designate a new settlement agent for a payment exchange if

  • (a) the current settlement agent for the payment exchange has its designation terminated under section 24 or notice to terminate that designation is provided under subsection 25(1); and

  • (b) the designation is for the RTR Exchange or a third-party exchange in which the indirect settlement participant intends to continue to exchange payment messages.

• Marginal note:Termination under section 25

  (6) In the case where notice to terminate the current settlement agent’s designation is provided under subsection 25(1) and a new settlement agent must be designated in accordance with subsection (5), designation of the new settlement agent must be made before the day on which the current settlement agent’s designation is terminated.

Marginal note:Identified payment exchanges

23 A settlement agent may only act on behalf of an indirect settlement participant in relation to a payment exchange identified by the indirect settlement participant in its designation made under section 22.

Termination of Designations After Suspension or Revocation

Marginal note:Termination

• 24 (1) All designations made under section 22 in respect of a settlement agent are terminated if the settlement agent is, in its capacity as a direct settlement participant or a settlement agent, subject to

  • (a) a suspension under any of sections 9 to 11, 17 or 18; or

  • (b) a revocation under section 13 or 20.

• Marginal note:When termination occurs

  (2) The designations are terminated at the time at which the suspension or revocation is made.

• Marginal note:Settlement agent — effect of termination

  (3) A settlement agent must not act on behalf of an indirect settlement participant after its designations are terminated under this section.

Termination After Prior Notice

Marginal note:Termination

• 25 (1) An indirect settlement participant or settlement agent who wishes to terminate a designation made under section 22 must, in accordance with the Rules, provide written notice that the designation is to be terminated to the Association and the indirect settlement participant or settlement agent, as the case may be.

• Marginal note:When termination occurs

  (2) The designation is terminated on the earlier of

  • (a) the day on which the notice period specified in the Rules ends; and

  • (b) one of the following days, as applicable:

    • (i) in the case where a new settlement agent is designated under section 22, the day on which the new settlement agent begins to act on behalf of the indirect settlement participant,

    • (ii) in any other case, the day agreed to by the indirect settlement participant and the current settlement agent.

Marginal note:Settlement agent must continue to act

• 26 (1) Subject to subsections (2) and (3), a settlement agent must continue to act on behalf of the indirect settlement participant until the day on which its designation is terminated under section 25.

• Marginal note:Exceptions

  (2) Subject to subsection 39.15(3.1) of the Canada Deposit Insurance Corporation Act, a settlement agent may immediately cease to act on behalf of an indirect settlement participant if

  • (a) the settlement agent reasonably believes that the indirect settlement participant poses a legal, financial or operational risk to the settlement agent; or

  • (b) the indirect settlement participant has breached a substantial term of an agreement entered into with the settlement agent for the purposes of clearing and settlement.

• Marginal note:Exception

  (3) A settlement agent must immediately cease to act on behalf of an indirect settlement participant during any period of time that the indirect settlement participant is subject to a suspension under any of sections 9 to 11 or to a revocation under section 13.

Clearing and Settlement

General

Marginal note:Payment items

27 For the purpose of the definition payment item in subsection 2(1) of the Act, the classes of payment items are the following:

• (a) RTR payment messages;

• (b) settlement instructions generated by RTR Clearing and Settlement for participant-to-participant transfers; and

• (c) settlement instructions submitted to RTR Clearing and Settlement by a third-party exchange for payment messages exchanged in the exchange.

Marginal note:Settlement accounts

• 28 (1) The Association must operate, on behalf of the Bank, one settlement account in RTR Clearing and Settlement for each direct settlement participant.

• Marginal note:Procedures

  (2) Each settlement account must be operated in accordance with the procedures set out in the Rules.

RTR Exchange Processes

Marginal note:Sending RTR payment messages

29 A participant may send RTR payment messages only in the form and manner set out in the Rules.

Marginal note:Irrevocable

30 An RTR payment message cannot be amended or revoked after it is sent to the RTR Exchange.

Marginal note:Acceptance by RTR Exchange

31 The RTR Exchange must accept an RTR payment message if

• (a) the message is sent to the exchange in accordance with the Rules;

• (b) the message is not a duplicate of any other message and does not contain an error specified in the Rules;

• (c) the amount necessary to settle the RTR payment obligation set out in the message does not exceed the “RTR Exchange value limit” as defined in the Rules; and

• (d) neither the sending participant nor the receiving participant is subject to a suspension under any of sections 9 to 11 or to a direction made under paragraph 48(b).

Marginal note:Actions required after acceptance

• 32 (1) Immediately after accepting an RTR payment message, the RTR Exchange must

  • (a) on the basis of the RTR payment message, generate settlement instructions and submit them to RTR Clearing and Settlement; and

  • (b) send the RTR payment message to the receiving participant.

• Marginal note:Ability to receive RTR payment message

  (2) Except in the circumstances specified in the Rules, a participant must always be able to receive a RTR payment message referred to in paragraph (1)(b).

• Marginal note:Notice to RTR Exchange

  (3) Immediately after receiving the RTR payment message referred to in paragraph (1)(b), the receiving participant must, in accordance with the Rules, send the RTR Exchange a notice indicating whether or not it accepts the payment set out in the message.

Clearing

General

Marginal note:Irrevocable

33 Settlement instructions are irrevocable once they are generated by or submitted to RTR Clearing and Settlement.

Marginal note:Acceptance for clearing and settlement

34 Settlement instructions that are submitted to RTR Clearing and Settlement by a payment exchange must be accepted for clearing and settlement if

• (a) the instructions are submitted in accordance with the Rules;

• (b) the instructions are not a duplicate of any other instructions and do not contain an error specified in the Rules;

• (c) the amount necessary to clear and settle the RTR payment obligation set out in the instructions does not exceed the “RTR clearing and settlement value limit” as defined in the Rules;

• (d) the amount of funds available in the sending participant’s settlement account to settle RTR payment obligations is not less than the amount necessary to clear and settle the RTR payment obligation set out in the instructions;

• (e) in the case where the sending participant is an indirect settlement participant, clearing and settlement of the RTR payment obligation set out in the instructions would not cause the participant to fall below its “net debit cap” as defined in the Rules; and

• (f) neither the sending participant nor the receiving participant or their respective settlement agents, if any, are subject to a suspension under any of sections 9 to 11, 17 or 18 or to a direction made under paragraph 48(b).

Marginal note:Reservation of funds

• 35 (1) Immediately after RTR Clearing and Settlement accepts settlement instructions for clearing and settlement, the Association must reserve, in the sending participant’s settlement account, an amount of funds that is equal to the amount necessary to clear and settle the RTR payment obligation if the settlement instructions contain an instruction to reserve the funds.

• Marginal note:Entries

  (2) For the purpose of subsection (1), the amount is reserved in the sending participant’s settlement account when the Association makes the entries to the account required by the Rules.

• Marginal note:Use of reserved funds

  (3) Subject to subsection 40(2), funds that are reserved under subsection (1) must only be used to settle the RTR payment obligation, regardless of any claim or interest in — or, in Quebec, any right to — those funds that any person other than the sending participant may have.

• Marginal note:Notice to payment exchange

  (4) RTR Clearing and Settlement must send to the payment exchange that submitted the settlement instructions a notice indicating whether or not the funds have been reserved.

RTR Exchange

Marginal note:Payment outcome report

• 36 (1) The RTR Exchange must, in accordance with the Rules, send the sending participant and the receiving participant a payment outcome report that indicates whether or not the RTR payment obligation will be settled.

• Marginal note:Positive payment outcome report

  (2) If the following conditions are met, the payment outcome report must indicate that the RTR payment obligation will be settled:

  • (a) the RTR Exchange has received, within the time limit set out in the Rules, a notice under subsection 32(3) indicating that the receiving participant will accept the payment; and

  • (b) the RTR Exchange has, within the time limit set out in the Rules, received a notice under subsection 35(4) indicating that the funds have been reserved.

Marginal note:Direction to implement

37 The RTR Exchange must submit a direction to RTR Clearing and Settlement to implement the settlement instructions if the conditions referred to in subsection 36(2) are met.

Participant-to-Participant Transfers

Marginal note:Direction

38 A direct settlement participant who seeks to effect a participant-to-participant transfer must submit, in accordance with the Rules, a direction to RTR Clearing and Settlement to effect the transfer.