Canadian Payments Act (R.S.C., 1985, c. C-21)

Short Title

Marginal note:Short title

1 This Act may be cited as the Canadian Payments Act.

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  Association

  Association means the Canadian Payments Association established by section 3; (Association)

  authorized foreign bank

  authorized foreign bank means a foreign bank in respect of which an order under subsection 524(1) of the Bank Act has been made but does not include a foreign bank that is subject to the restrictions and requirements referred to in subsection 524(2) of that Act; (banque étrangère autorisée)

  Board

  Board means the Board of Directors of the Association; (conseil)

  by-law

  by-law means a by-law of the Association; (règlement administratif)

  central cooperative credit society

  central cooperative credit society and central mean a cooperative credit society incorporated by or under an Act of the legislature of a province, one of whose principal purposes is to provide liquidity support to local cooperative credit societies, and

  • (a) whose membership consists wholly or primarily of local cooperative credit societies, or

  • (b) whose directors are wholly or primarily persons elected or appointed by local cooperative credit societies; (société coopérative de crédit centrale ou centrale)

  Chairman

  Chairman[Repealed, 2001, c. 9, s. 219]

  Chairperson

  Chairperson means the Chairperson of the Board referred to in section 15; (président du conseil)

  cooperative credit association

  cooperative credit association means an association to which the Cooperative Credit Associations Act applies; (association coopérative de crédit)

  Executive Committee

  Executive Committee[Repealed, 2014, c. 39, s. 334]

  federation of cooperative credit societies

  federation of cooperative credit societies or federation[Repealed, 2001, c. 9, s. 219]

  General Manager

  General Manager[Repealed, 2007, c. 6, s. 422]

  Inspector

  Inspector[Repealed, R.S., 1985, c. 18 (3rd Supp.), s. 33]

  life insurance company

  life insurance company means

  • (a) a life company within the meaning of subsection 2(1) of the Insurance Companies Act,

  • (b) a foreign life company within the meaning of section 571 of that Act, acting in respect of its insurance business in Canada, or

  • (c) a body corporate that carries on under a constating instrument issued under an Act of the legislature of a province a business substantially similar to the business of a life company referred to in paragraph (a); (société d’assurance-vie)

  loan company

  loan company means a corporation that accepts deposits transferable by order and that

  • (a) is a company to which the Trust and Loan Companies Act applies and that is not a trust company pursuant to subsection 57(2) of that Act, or

  • (b) carries on, under an Act of the legislature of a province or a constating instrument issued under provincial jurisdiction, a business substantially similar to the business of a company referred to in paragraph (a); (société de prêt)

  local cooperative credit society

  local cooperative credit society and local mean a cooperative credit society incorporated by or under an Act of the legislature of a province

  • (a) whose members consist substantially of individuals, and

  • (b) whose principal purpose is to receive deposits from, and make loans to, its members; (société coopérative de crédit locale)

  member

  member means any of those persons who are members of the Association pursuant to section 4; (membre)

  Minister

  Minister means the Minister of Finance; (ministre)

  money market mutual fund

  money market mutual fund means a fund

  • (a) the assets of which are fully or principally invested in short-term and highly liquid debt securities, and

  • (b) that satisfies conditions prescribed by regulation; (fonds mutuel en instruments du marché monétaire)

  payment item

  payment item means an item within a class of items prescribed by by-law; (instrument de paiement)

  President

  President means the President of the Association appointed under section 16; (président)

  qualified corporation

  qualified corporation means a body corporate

  • (a) that has issued shares to the public under a prospectus, filed in accordance with the laws of the province in which the shares were issued, having conditions attached to the shares requiring the body corporate to accept the surrender of any fully-paid shares, or fractions or portions of the shares,

    • (i) at the demand of their holder, and

    • (ii) at prices determined and payable in accordance with specified conditions,

  • (b) whose shares referred to in paragraph (a) have a fair market value, determined without regard to any voting rights attached to the shares, that is not less than 95% of the fair market value of all of the issued shares of the capital stock of the body corporate, and

  • (c) having assets that constitute a money market mutual fund; (société admissible)

  qualified trust

  qualified trust means an inter vivos trust

  • (a) in which the interest of its beneficiaries is described by reference to units of the trust that have been issued to the public under a prospectus, filed in accordance with the laws of the province in which the units were issued, having conditions attached to the units requiring the trustee to accept the surrender of any fully-paid units, or fractions or portions of the units,

    • (i) at the demand of their holder, and

    • (ii) at prices determined and payable in accordance with specified conditions,

  • (b) whose units referred to in paragraph (a) have a fair market value, determined without regard to any voting rights attached to the units, that is not less than 95% of the fair market value of all of the issued units of the trust, and

  • (c) whose assets constitute a money market mutual fund; (fiducie admissible)

  rule

  rule means a rule of the Association; (règle)

  securities dealer

  securities dealer means a body corporate that is registered or licensed under the laws of a province to trade in securities, as agent or for its own behalf; (courtier en valeurs mobilières)

  Superintendent

  Superintendent[Repealed, 2001, c. 9, s. 219]

  trust company

  trust company means a corporation that accepts deposits transferable by order and that

  • (a) is a company to which the Trust and Loan Companies Act applies and that is a trust company pursuant to subsection 57(2) of that Act, or

  • (b) carries on, under an Act of the legislature of a province or a constating instrument issued under provincial jurisdiction, a business substantially similar to the business of a company referred to in paragraph (a); (société de fiducie)

  trustee

  trustee, in respect of a qualified trust, means a trustee that is a body corporate; (fiduciaire)

  user

  user means

  • (a) in Part 1, a person who is a user of payment services but is not a member, and

  • (b) in Part 2, a person who is a user of services provided by a participant of a payment system but is not a participant in the system. (usager)

• Marginal note:Societies and federations

  (2) For the purposes of Part 1, a local cooperative credit society, a cooperative credit association, a central cooperative credit society or a federation of cooperative credit societies is deemed not to be a loan company or a trust company.

• Marginal note:Not statutory instrument

  (3) Rules, statements of principle and standards made by the Board and orders made under a by-law are not statutory instruments for the purposes of the Statutory Instruments Act.

Act Binding on Her Majesty

Marginal note:Her Majesty

• 2.1 (1) This Act is binding on Her Majesty in right of Canada.

• Marginal note:Her Majesty in right of a province

  (2) If Her Majesty in right of a province becomes a member of the Association, this Act is binding on Her Majesty in right of the province.

PART 1Canadian Payments Association

Establishment and Membership

Marginal note:Association established

• 3 (1) A corporation is hereby established to be called the Canadian Payments Association.

• Marginal note:Association not an agent of Her Majesty

  (2) The Association is not an agent of Her Majesty.

Marginal note:Members of Association

• 4 (1) The Association shall consist of the following members:

  • (a) the Bank of Canada;

  • (b) every bank;

  • (c) every authorized foreign bank;

  • (c.1) every cooperative credit association, loan company or trust company that is designated as a bridge institution under the Canada Deposit Insurance Corporation Act; and

  • (d) any other person who is entitled under this Part to be a member and who, on application to the Association for membership in the Association, establishes entitlement to be a member.

• Marginal note:Entitled members

  (2) Each of the following persons is entitled to be a member of the Association if they meet the requirements set out in the regulations and the by-laws:

  • (a) a central, a trust company, a loan company and any other person, other than a local that is a member of a central or a cooperative credit association, that accepts deposits transferable by order;

  • (b) [Repealed, 2001, c. 9, s. 223]

  • (c) Her Majesty in right of a province or an agent or mandatary of Her Majesty in right of a province, if Her Majesty in right of a province or the agent or mandatary accepts deposits transferable by order;

  • (d) a life insurance company;

  • (e) a securities dealer;

  • (f) a cooperative credit association;

  • (g) the trustee of a qualified trust; and

  • (h) a qualified corporation, on behalf of its money market mutual fund.

• Marginal note:Commencement of membership

  (3) Membership in the Association commences

  • (a) in the case of a bank and an authorized foreign bank, on the day on which an order is made under the Bank Act approving its commencement and carrying on of business; and

  • (b) in the case of a person referred to in paragraph (1)(d), on the day on which the person’s application for membership in the Association is approved by the Board.

• Marginal note:Suspension of membership rights

  (4) A suspension, imposed in accordance with the by-laws, of any of a member’s membership rights is not effective unless the Association has, in advance, sent the Minister a notice of the suspension.

• Marginal note:Termination of membership

  (5) A member, other than a member referred to in paragraphs (1)(a) to (c), ceases being a member of the Association if

  • (a) the member gives the Association notice of its intention to cease being a member at least ninety days prior to the effective date thereof or such longer notice as the by-laws may require; and

  • (b) the member satisfies its liabilities to the Association.

• Marginal note:Termination of membership

  (6) A member, other than a member referred to in paragraphs (1)(a) to (c), ceases being a member of the Association three days after the day on which the Board adopts a resolution, by a majority of not less than two-thirds of the votes cast by directors voting in respect of the resolution, declaring that, in the opinion of the Board, the member does not meet the requirements set out in the regulations and the by-laws.

• Marginal note:Effect of resolution

  (7) A member to which a resolution of the Board described in subsection (6) is applicable is not

  • (a) eligible to vote at any meeting of members held in the three days following the day on which the resolution is adopted;

  • (b) eligible, despite any other provision of this Part, for readmission to the Association as a member until a resolution is adopted by the Board, by a majority of not less than two-thirds of the votes cast by directors voting in respect of the resolution, declaring that, in the opinion of the Board, the member or former member concerned meets the requirements set out in the regulations and the by-laws; or

  • (c) relieved of the obligation to pay to the Association its liabilities to the Association on the day it ceases being a member.

Marginal note:Right to vote

• 4.1 (1) Each member shall have one vote on all matters to be decided by members.

• Marginal note:Proxies

  (2) A member entitled to vote at a meeting of members may, by means of a proxy, appoint a proxyholder or one or more alternate proxyholders to attend and act at the meeting in the manner and to the extent authorized by the proxy and within the authority conferred by the proxy.

• Marginal note:Quorum

  (3) At a meeting of members, the members present, in person or by proxy, constitute a quorum if, together, they represent the majority of all members.

Objects and Powers

Marginal note:Objects

• 5 (1) The objects of the Association are to

  • (a) establish and operate national systems for the clearing and settlement of payments and other arrangements for the making or exchange of payments;

  • (b) facilitate the interaction of its clearing and settlement systems and related arrangements with other systems or arrangements involved in the exchange, clearing or settlement of payments; and

  • (c) facilitate the development of new payment methods and technologies.

• Marginal note:Duty of Association

  (2) In pursuing its objects, the Association shall promote the efficiency, safety and soundness of its clearing and settlement systems and take into account the interests of users.

Marginal note:Powers

• 6 (1) The Association may, in carrying out its objects,

  • (a) arrange the exchange of payment items at such places in Canada as the Association considers appropriate;

  • (b) require the payment of dues by members and establish the amount thereof;

  • (c) employ such officers and employees and engage the services of such advisers, agents and consultants as it considers necessary for the proper conduct of its business, and fix the terms and conditions of their employment or engagement and remuneration; and

  • (d) provide or procure the provision of pension, insurance or other benefits for officers and employees of the Association.

• Marginal note:Capacity and powers

  (2) For the purpose of carrying out its objects, the Association has the capacity, rights, powers and privileges of a natural person.

Head Office

Marginal note:Head office

7 The head office of the Association shall be at such place in Canada as may be designated in the by-laws of the Association.

Board of Directors

Marginal note:Composition

• 8 (1) There shall be a Board of Directors of the Association consisting of the following 13 directors:

  • (a) the President;

  • (b) three directors who are directors, officers or employees of members that, in the normal course of business, maintain a settlement account at the Bank of Canada;

  • (c) two directors who are directors, officers or employees of members other than those described in paragraph (b); and

  • (d) seven directors who are independent of the Association and of its members.

• Marginal note:Election of directors

  (2) The directors referred to in paragraphs (1)(b) to (d) are to be elected by the members.

• Marginal note:Quorum

  (3) At a meeting of the Board, the directors present constitute a quorum if at least seven directors are present and a majority of the directors present are directors referred to in paragraph (1)(d).

Marginal note:Ineligibility

• 9 (1) No person is eligible to be a director if they are

  • (a) a director, officer or employee of the Bank of Canada;

  • (b) employed in any capacity in the federal public administration or the public service of a province or hold any office or position for which any salary or other remuneration is payable out of public moneys; or

  • (c) a member of the Senate or House of Commons or a member of a provincial legislature.

• Marginal note:Restriction

  (2) When a director, officer or employee of a member is a director of the Association, no other director, officer or employee of that member, or of an affiliate of that member, is eligible to be a director of the Association.

• Marginal note:Affiliates

  (3) For the purposes of this section,

  • (a) one corporation is affiliated with another corporation if one of them is the subsidiary of the other or both are subsidiaries of the same corporation or each of them is controlled by the same person; and

  • (b) if two corporations are affiliated with the same corporation at the same time, they are deemed to be affiliated with each other.

• Marginal note:Definition of control

  (4) In paragraph (3)(a), control means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, agreement or arrangement, the ownership of any corporation or otherwise.

Marginal note:Term of office — elected directors

• 9.1 (1) The elected directors hold office for a term of three years and are eligible to be elected for two further terms.

• Marginal note:Removal of elected directors

  (2) If a resolution passed by a two-thirds majority of the members who are present at a special meeting of members called to consider the resolution provides for the recall of an elected director, then, despite subsection (1), that director ceases to be a director of the Association at the time notice of the resolution is given to the director or at any other time that may be fixed by by-law.

• Marginal note:Remuneration

  (3) A director referred to in paragraph 8(1)(d) shall be paid by the Association the remuneration that is fixed by by-law.

Marginal note:Vacancy

10 A vacancy on the Board does not impair the right of the remaining directors to act.

Marginal note:Vacancies

• 11 (1) If a vacancy among the elected directors occurs, the directors shall cause a meeting to be held of the members for the purpose of electing a director to fill the vacancy for the remainder of the term of the director whose departure resulted in the vacancy.

• Marginal note:Election by the Board

  (2) If the meeting is called and there is no quorum or the meeting fails to elect a director to fill the vacancy, the Board shall elect a director for the remainder of the term of the director whose departure from the Board resulted in the vacancy.

12 [Repealed, 2014, c. 39, s. 338]

13 [Repealed, 2014, c. 39, s. 338]

Marginal note:Canadian citizens

14 At least three quarters of the directors of the Association must be Canadian citizens ordinarily resident in Canada.

Chairperson

Marginal note:Chairperson and Deputy Chairperson

• 15 (1) The elected directors shall elect a Chairperson of the Board and a Deputy Chairperson of the Board from among the directors referred to in paragraph 8(1)(d) for a renewable term of up to three years. However, the Chairperson and Deputy Chairperson shall each serve no more than six years in office in total.

• Marginal note:Duties of Chairperson

  (2) The Chairperson shall preside at meetings of the Board and perform the duties that are assigned by the by-laws.

• Marginal note:Absence of Chairperson

  (3) If the Chairperson is unable to act by reason of absence or incapacity, the Deputy Chairperson shall perform the duties of the Chairperson.

• Marginal note:Additional vote

  (4) The Chairperson or, in the absence or incapacity of the Chairperson, the Deputy Chairperson has, in the event of a tie vote on any matter before the Board at a meeting of the Board, a second vote.

President

Marginal note:President

• 16 (1) The elected directors shall appoint the President of the Association.

• Marginal note:Duties

  (2) The President is the chief executive of the Association and has, on behalf of the Board, the direction and management of the business of the Association with authority to act in all matters that are not by the by-laws or by resolution of the Board specifically reserved to be done by the Chairperson or the Board.

• Marginal note:Exercise of powers by officers and employees

  (3) Except as otherwise provided by the President, and subject to any terms and conditions that may be specified by the President, an officer or employee of the Association may exercise any power and perform any duty or function of the Association if the officer or employee is appointed to serve in a capacity appropriate to the exercise of the power or performance of the duty or function.

Duty of Care

Marginal note:Duty of care of directors and officers

16.1 Every director and officer of the Association, in exercising their powers and performing their duties, shall

• (a) act honestly and in good faith with a view to the best interests of the Association; and

• (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

Duties and Powers of Board

Marginal note:Duties and powers of Board

• 17 (1) The Board shall direct and manage the affairs of the Association and may for such purposes exercise all the powers of the Association.

• Marginal note:Power to borrow

  (2) Subject to the by-laws, the Board may

  • (a) borrow money on the credit of the Association;

  • (b) issue, reissue, sell or pledge debt obligations of the Association; and

  • (c) mortgage, pledge or otherwise create a security interest in all or any property of the Association owned or subsequently acquired, to secure any obligation of the Association.

• Marginal note:Definitions

  (3) For the purposes of this section,

  debt obligation

  debt obligation means a bond, debenture, note or other evidence of indebtedness or guarantee of the Association, whether secured or unsecured; (titre de créance)

  security interest

  security interest means an interest in or charge on the property of the Association by way of mortgage, pledge or otherwise, taken by a creditor to secure payment of an obligation of the Association. (sûreté)

Marginal note:By-laws

• 18 (1) The Board may make any by-laws that it considers advisable for the attainment of the objects of the Association, including by-laws

  • (a) providing for eligibility criteria for membership in the Stakeholder Advisory Council or the Member Advisory Council and their number of members;

  • (b) establishing, subject to this Part, requirements for membership in the Association;

  • (c) and (c.1) [Repealed, 2014, c. 39, s. 342]

  • (d) respecting the exchange and clearing of payment items and related matters;

  • (e) respecting settlements and related matters;

  • (f) respecting the payment of dues by the members and the payment of fees for services performed by or on behalf of the Association, and establishing the method of determining the amount of those dues and those fees;

  • (f.1) [Repealed, 2014, c. 39, s. 342]

  • (g) establishing penalties for any failure by members to comply with the by-laws, rules and orders made under the by-laws, except by-laws made under paragraph (k), including penalties that provide for the payment of interest or the making of restitution and procedures in respect of the imposition of those penalties;

  • (h) respecting the authenticity and integrity of payment items and messages;

  • (i) respecting the identification and authentication of members and other persons;

  • (i.1) prescribing classes of members of the Stakeholder Advisory Council for the purposes of subsection 21.2(7);

  • (j) limiting the liability of the Association, its members, its employees and other persons for any loss or damage suffered by a member as a result of anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under a by-law or a rule are intended or authorized to be exercised or performed; and

  • (k) respecting the internal administration of the business of the Association, including

    • (i) the procedures for all business that is conducted at meetings of the Board, the Board’s committees, the Stakeholder Advisory Council or the Member Advisory Council,

    • (ii) the remuneration of directors referred to in paragraph 8(1)(d) and of persons referred to in subsection 21.2(7),

    • (ii.1) the payment of reasonable travel and living expenses incurred by members of the Stakeholder Advisory Council, and

    • (iii) the procedures for the nomination, selection and appointment of persons to be members of the Stakeholder Advisory Council or the Member Advisory Council.

• Marginal note:Approval

  (2) A by-law, except a by-law made under paragraph (1)(k), shall not come into force unless it is approved by the Minister and, once approved, copies of it must be sent by the President to every member.

• Marginal note:Notice

  (3) The President shall notify the Minister of the making of a by-law under paragraph (1)(k) and shall send copies of the by-law to every member.

• (4) [Repealed, 2014, c. 39, s. 342]

Rules, Statements of Principle and Standards

Marginal note:Rules

• 19 (1) Subject to the by-laws, the Board may make any rules that it considers advisable for the attainment of the objects of the Association, including rules

  • (a) respecting payment items acceptable for exchange, clearing or settlement;

  • (b) establishing standards and procedures in respect of the exchange and clearing of payment items;

  • (b.1) respecting the destruction of payment items;

  • (c) respecting settlements and related matters;

  • (d) respecting the authenticity and integrity of payment items and messages; and

  • (e) respecting the identification and authentication of members and other persons.

• (2) [Repealed, 2014, c. 39, s. 344]

• Marginal note:Rules to be available

  (3) The Association shall make a copy of every rule available to members in the manner determined by the President.

• Marginal note:Copies of rules to be sent to Minister

  (4) A copy of every rule shall be sent to the Minister within ten days after it is made.

Marginal note:Statements of principle and standards

19.1 Subject to the by-laws and rules, the Board may make any statements of principle and standards that it considers advisable for the attainment of the objects of the Association.

Disallowance

Marginal note:Effective date of rule

• 19.2 (1) A rule, including an amendment to or a repeal of a rule, made under subsection 19(1) shall not come into force before the thirtieth day after a copy of it is sent to the Minister in accordance with subsection 19(4), but the Minister may declare the rule to be in force at any time before that period expires.

• Marginal note:Extension of time

  (2) If the Minister is of the opinion that an extension of the period mentioned in subsection (1) is necessary to permit adequate review of a rule, the Minister may within 10 days after its receipt, on written notice to the sender of the rule, extend that period by up to 30 days.

• Marginal note:Minister’s disallowance

  (3) The Minister may disallow the whole or a part of a rule.

Directives

Marginal note:Directives by Minister

• 19.3 (1) If the Minister is of the opinion that it is in the public interest to do so, the Minister may issue a written directive to the Association, including a directive to make, amend or repeal a by-law, rule or standard.

• Marginal note:Consultation

  (2) Before a directive is given to the Association, the Minister shall consult the Board, and may consult any interested party, with respect to the content and effect of the directive. If the directive relates to the operation of a clearing and settlement system designated under subsection 4(1) of the Payment Clearing and Settlement Act, the Minister shall also consult the Governor of the Bank of Canada.

• Marginal note:Notification of implementation

  (3) As soon as is practicable after implementing a directive and completing any action required to be taken in connection with it, the Association shall notify the Minister that the directive has been implemented and the action completed.

• Marginal note:Directive not statutory instrument

  (4) A directive is not a statutory instrument for the purposes of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

• Marginal note:Implementation

  (5) The Board shall ensure that a directive is implemented in a prompt and efficient manner.

• Marginal note:Duty to comply

  (6) Every director, officer and employee of the Association shall comply with any directive given to the Association.

Information Requirements

Marginal note:Request by Minister

19.4 For the purpose of the administration of this Part, the Association shall provide the Minister with such information and documents as the Minister may from time to time request.

Marginal note:Notice of developments

19.5 The President shall, as soon as feasible, notify the Minister of any financial or other developments that have or are likely to have a material adverse effect on the business of the Association.

Committees of the Board

Marginal note:Nominating committee

• 20 (1) The Board shall establish a nominating committee to identify and propose qualified candidates for the election of directors.

• Marginal note:Composition

  (2) The nominating committee shall consist of elected directors, a majority of whom shall be directors referred to in paragraph 8(1)(d).

• Marginal note:Representative character

  (3) When the nominating committee is identifying qualified candidates for the election of directors referred to in paragraph 8(1)(c), it shall endeavour to identify candidates that are broadly representative of the diversity of the membership of the Association.

Marginal note:Other committees

21 The Board may, subject to the regulations, establish other committees consisting of such persons as the Board considers appropriate.

Marginal note:Powers and duties

21.1 Subject to the by-laws, the Board may delegate to its committees such powers and duties as the Board considers appropriate.

Stakeholder Advisory Council

Marginal note:Stakeholder Advisory Council

• 21.2 (1) There shall be a Stakeholder Advisory Council consisting of persons appointed by the Board in consultation with the Minister.

• Marginal note:Object

  (2) The object of the Council is to provide counsel and advice to the Board on payment and clearing and settlement matters and any other matter relating to the objects of the Association.

• (3) [Repealed, 2019, c. 29, s. 96]

• (4) [Repealed, 2019, c. 29, s. 96]

• Marginal note:Representative character

  (5) The Council shall be broadly representative of users and payment service providers.

• (6) [Repealed, 2019, c. 29, s. 96]

• Marginal note:Remuneration

  (7) The Association may pay the remuneration that is fixed by by-law to the following persons:

  • (a) any member of the Council that falls within a class prescribed by by-laws; and

  • (b) any person who represents the interests of such a member or who is represented by such a member.

• Marginal note:Travel and living expenses

  (8) The members of the Council may be paid by the Association any reasonable travel and living expenses incurred by them when engaged on the business of the Council while absent from their ordinary places of residence.

Marginal note:Report of Council

21.3 The Chairperson of the Stakeholder Advisory Council shall, as soon as feasible after the end of each fiscal year, submit a report on its activities in that fiscal year to the Board.

Member Advisory Council

Marginal note:Member Advisory Council

• 21.4 (1) There shall be a Member Advisory Council consisting of persons appointed by the Board.

• Marginal note:Object

  (2) The object of the Council is to provide counsel and advice to the Board on the Association’s operation of clearing and settlement systems, the interaction of those systems with other systems involved in the exchange, clearing or settlement of payments and the development of new technologies.

• Marginal note:Representative character

  (3) The Council shall be broadly representative of the diversity of the membership of the Association.

Budgets

Marginal note:Budgets

• 22 (1) In each year, the Board shall cause an operating budget and a budget setting out proposed capital expenditures of the Association to be prepared.

• Marginal note:Consultation

  (2) The Board shall consult the members before establishing the operating budget and capital expenditures budget.

Corporate Plan and Annual Report

Marginal note:Corporate plan

• 23 (1) In each year, the Board shall, within the time prescribed by the regulations, submit to the Minister for approval a five-year corporate plan for the Association.

• Marginal note:Contents of corporate plan

  (2) The corporate plan shall include

  • (a) the Association’s objectives;

  • (b) the strategies that the Association intends to use to achieve its objectives, including operational, financial and human resource strategies;

  • (c) the Association’s expected performance over the five-year period;

  • (d) the Association’s operating and capital expenditures budgets;

  • (e) any material changes that have occurred in respect of information provided in the previous corporate plan; and

  • (f) any other information that the Minister may require.

Marginal note:Annual report

• 24 (1) The Board shall, within the time prescribed by the regulations, prepare a report on the Association’s operations for each fiscal year and the Association shall publish it on its Internet site.

• Marginal note:Contents

  (2) The report shall include

  • (a) the financial statements of the Association and the report of the auditor;

  • (b) an evaluation of the Association’s performance with respect to the objectives established in the corporate plan;

  • (c) the annual report of the Stakeholder Advisory Council; and

  • (d) a statement of the Association’s priorities for the following fiscal year.

Annual Meeting

Marginal note:Annual meeting

25 The Board shall call an annual meeting of members not later than six months after the end of each fiscal year of the Association for the purpose of

• (a) receiving the financial statements of the Association for the preceding fiscal year and the report of the auditor respecting those statements;

• (b) electing directors; and

• (c) considering any other matter respecting the operations of the Association.

Auditor

Marginal note:Appointment of auditor

• 26 (1) The members of the Association shall, at each annual meeting, appoint an auditor to hold office until the close of the next annual meeting.

• Marginal note:Remuneration

  (2) The remuneration of the auditor may be fixed by resolution at the annual meeting of members. However, if the remuneration of the auditor is not fixed at the annual meeting, the Board may do so.

• (3) [Repealed, 2014, c. 39, s. 353]

Fiscal Year

Marginal note:Fiscal year

27 The fiscal year of the Association is the calendar year.

Electronic Meetings

Marginal note:Electronic meetings

• 28 (1) Subject to the by-laws, a meeting of the Board or of a committee of the Board, a meeting of the members or a meeting of the Stakeholder Advisory Council or Member Advisory Council may be held by means of any telephonic, electronic or other communications facilities that permit all persons participating in the meeting to communicate adequately with each other during the meeting.

• Marginal note:Deemed present

  (2) A person participating in a meeting by any means referred to in subsection (1) is deemed for the purposes of this Part to be present at the meeting.

• (3) [Repealed, 2001, c. 9, s. 239]

Rights and Duties of Members

Marginal note:Members

29 Members may present payment items and shall accept and arrange for settlement of payment items in accordance with the by-laws and the rules.

30 [Repealed, 2001, c. 9, s. 240]

Insolvency

Marginal note:Definition of priority payment instrument

• 31 (1) In this section, priority payment instrument means a money order, bank draft or similar instrument issued, directly or indirectly, by a member other than a money order, bank draft or similar instrument issued by a member to another member for the purpose of effecting a payment between those members.

• Marginal note:Priority on insolvency

  (2) Despite any other Act of Parliament but subject to subsection (5) and to the rights of secured creditors with respect to any security interest in or charge on the property of a member, if a bankruptcy order is made against a member or a winding-up order is made in respect of a member (hereinafter in this section referred to as an “insolvent member”) the items set out in paragraphs (a) and (b) shall be paid from the estate of the insolvent member, in priority to any other claim against the estate of the insolvent member, in the following order:

  • (a) unpaid cheques or orders that had been drawn on the insolvent member and certified by such member prior to the making of the bankruptcy order or winding-up order; and

  • (b) unpaid priority payment instruments drawn on the insolvent member and issued prior to the making of the bankruptcy order or winding-up order.

• (3) [Repealed, 1996, c. 6, s. 163]

• Marginal note:Time limit

  (4) Despite subsection (2), no payment of an unpaid cheque, order or priority payment instrument shall be made under that subsection in priority to any other claim against the estate of an insolvent member unless a request for such payment is made within sixty days after the making of the bankruptcy order or winding-up order.

• Marginal note:Preferences

  (5) Subsection (2) shall not be construed or applied to permit an unpaid cheque, an order or a priority payment instrument to be paid in priority to any other claim

  • (a) where the cheque or order had been certified by the insolvent member, or

  • (b) where the priority payment instrument had been issued, directly or indirectly, by the insolvent member,

  with a view to giving the drawee of the cheque, order or unpaid priority instrument a preference over the other creditors of the insolvent member.

• Marginal note:Definition of preference

  (6) In subsection (5), preference means a preference within the meaning of the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act.

• Marginal note:Definition of member

  (7) For purposes of this section, member includes a local that is a member of a central that is a member of the Association.

Marginal note:Insolvency

• 32 (1) No law relating to the insolvency of any body corporate, except Part I.1 of the Payment Clearing and Settlement Act, applies to the Association.

• Marginal note:Winding-up

  (2) No law relating to the winding-up of any body corporate applies to the Association and in no case shall its affairs be wound up unless Parliament so provides.

33 [Repealed, 2001, c. 9, s. 241]

Application of Other Acts

Marginal note:Application of Canada Business Corporations Act

• 34 (1) Subsections 16(1) and 21(1), sections 23, 116, 155, 158, 159, 161, 164 to 166 and 168, subsection 169(1), section 170, subsections 171(7) and (8), section 172 and subsections 257(1) and (2) of the Canada Business Corporations Act apply, with such modifications as the circumstances require, to the Association as if it were a corporation incorporated under that Act.

• Marginal note:Exemption from Canada Not-for-profit Corporations Act

  (2) The Canada Not-for-profit Corporations Act does not apply to the Association.

Regulations

Marginal note:Regulations by Governor in Council

• 35 (1) The Governor in Council may make regulations

  • (a) providing for the mandate of committees established under section 20 or 21, eligibility criteria for membership in those committees and their number of members;

  • (b) respecting the election of directors of the Association, including the eligibility of persons to be elected as directors, and defining independent for the purposes of paragraph 8(1)(d);

  • (c) prescribing the form and content of the Association’s corporate plans and annual reports, and the time and manner in which they must be prepared or submitted;

  • (d) establishing requirements for membership in the Association to be met by persons or classes of persons;

  • (e) respecting the conditions that a money market mutual fund must satisfy; and

  • (f) generally, for carrying out the purposes and provisions of this Part.

• (2) [Repealed, 2014, c. 39, s. 356]

PART 2Designated Payment Systems

Interpretation

Marginal note:Definitions

36 The definitions in this section apply in this Part.

designated payment system

designated payment system means a payment system designated under subsection 37(1). (système de paiement désigné)

participant

participant means a party to an arrangement in respect of a payment system. (participant)

payment system

payment system means a system or arrangement for the exchange of messages effecting, ordering, enabling or facilitating the making of payments or transfers of value. (système de paiement)

rule

rule means a rule, by whatever name called, that governs a designated payment system. It includes an amendment to or a repeal of a rule. (règles)

Application

Marginal note:Application

36.1 This Part does not apply to the Association.

Designation

Marginal note:Designation by Minister

• 37 (1) The Minister may, if he or she considers that it is in the public interest to do so, designate a payment system that in the opinion of the Minister

  • (a) is national or substantially national in its scope; or

  • (b) plays a major role in supporting transactions in Canadian financial markets or the Canadian economy.

• Marginal note:Factors

  (2) The following factors shall be considered in a determination of whether it is in the public interest to designate a payment system:

  • (a) the level of financial safety provided by the payment system to the participants and users;

  • (b) the efficiency and competitiveness of payment systems in Canada; and

  • (c) the best interests of the financial system in Canada.

• Marginal note:Consultation

  (3) Before a payment system is designated, the Minister shall consult the manager and the participants of the payment system and may consult interested parties, with respect to the effect of the designation.

• Marginal note:Notice

  (4) The Minister shall notify the manager and the participants of a designated payment system in any manner that the Minister considers appropriate.

• Marginal note:Designation not statutory instrument

  (5) A designation is not a statutory instrument for the purposes of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

Rules

Marginal note:Copies of rules to be sent to Minister

• 38 (1) A copy of every rule governing a designated payment system shall be sent by the manager of the designated payment system or, if there is none, by the participants to the Minister

  • (a) in the case of a rule made before the designation of the payment system, within 30 days after the designation; and

  • (b) in the case of a rule made after the designation, within 10 days after it is made.

• Marginal note:Effective date of rule

  (2) A rule, other than a rule referred to in paragraph (1)(a), does not come into force before the thirtieth day after a copy of it is sent to the Minister under subsection (1), but the Minister may declare the rule to be in force at any time before that period expires.

• Marginal note:Extension of time

  (3) If the Minister is of the opinion that an extension of the period mentioned in subsection (2) is necessary to permit adequate review of a rule, the Minister may within 10 days after its receipt, on written notice to the sender of the rule, extend that period by up to 30 days.

• Marginal note:Disallowance

  (4) The Minister may disallow the whole or a part of a rule.

• Marginal note:Exemption

  (5) The Minister may exempt a designated payment system from the application of subsection (2).

Guidelines and Directives

Marginal note:Minister may issue guidelines

• 39 (1) The Minister may issue guidelines in respect of any matter relating to the administration or enforcement of this Part.

• Marginal note:Guidelines public

  (2) Guidelines shall be made available to the public and the Minister shall give notice of them in any manner that the Minister considers appropriate.

Marginal note:Minister may issue directive

• 40 (1) The Minister may issue a written directive to the manager or a participant of a designated payment system in respect of

  • (a) the conditions a person must meet to become a participant in the designated payment system;

  • (b) the operation of the designated payment system;

  • (c) the interaction of the designated payment system with other payment systems; or

  • (d) the relationship of the designated payment system with users.

• Marginal note:Consultation

  (2) Before giving a directive, the Minister shall consult the person to whom it is to be given, and may consult any interested party, with respect to the content and effect of the directive.

• Marginal note:Content

  (3) The Minister may specify in a directive that a manager of a designated payment system or a participant shall, within such time as the Minister considers necessary,

  • (a) cease or refrain from engaging in an act or course of conduct;

  • (b) perform such acts as in the opinion of the Minister are necessary in the public interest; or

  • (c) make, amend or repeal a rule.

• Marginal note:Notification of implementation

  (4) As soon as is practicable after implementing a directive and completing any actions required to be taken in connection with it, the person to whom it is given shall notify the Minister that the directive has been implemented and the action completed.

• Marginal note:Directive not statutory instrument

  (5) A directive is not a statutory instrument for the purposes of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

• Marginal note:Duty to comply

  (6) A directive is binding on the person to whom it is given.

Information Requirements

Marginal note:Information requests

• 41 (1) If the Minister requires information in order to determine whether a payment system should be designated under subsection 37(1), the Minister may request that the manager of the payment system or a participant provide the Minister with any information and documents regarding the system that the Minister may require.

• Marginal note:Ongoing information requests

  (2) Every manager of a designated payment system or, if there is none, the participants shall, in respect of the designated payment system, provide the Minister with such information and documents as the Minister may from time to time request.

• Marginal note:Compliance with request required

  (3) Every person to whom a request is directed shall comply with the request.

Participants

Marginal note:Responsibility if foreign system manager

• 42 (1) If a designated payment system does not have a Canadian manager, the Canadian participants

  • (a) shall comply with the obligations imposed under this Part on a manager of a designated payment system, and

  • (b) have all the rights conferred by this Part on a manager of a designated payment system

  in the same manner and to the same extent as if the Canadian participants were the manager of the designated payment system on which those obligations and rights are imposed or conferred and, for that purpose, any action that the Minister may take in respect of the manager of the designated payment system may only be taken in respect of its Canadian participants.

• Marginal note:Failure to comply of system manager

  (2) If a manager of a designated payment system fails to comply with the obligations imposed on it under this Part in respect of the designated payment system or otherwise contravenes this Part, the participants jointly and severally shall comply with those obligations or are liable for the contravention in the same manner and to the same extent as the manager.

• Marginal note:Interpretation

  (3) In subsection (1), a manager of a designated payment system or a participant is “Canadian” if the manager or participant is incorporated or formed under the laws of Canada or a province.

PART 3General

Marginal note:Information is confidential

• 43 (1) Information and documents obtained under this Act are confidential and shall be treated accordingly.

• Marginal note:Disclosure permitted

  (2) Nothing in subsection (1) prevents the Minister from disclosing any information or documents to

  • (a) any government agency or regulatory body charged with the regulation of financial institutions, as defined in section 2 of the Bank Act, for purposes related to that regulation,

  • (b) the Bank of Canada or any officer of the Bank authorized in writing by the Governor of the Bank, and

  • (c) the Chief Executive Officer of the Canada Deposit Insurance Corporation or any other officer of that Corporation authorized in writing by the Chief Executive Officer,

  if the Minister is satisfied that the information or documents will be treated as confidential by the agency, body or person to whom they are disclosed.

Marginal note:No liability if in good faith

44 No action lies against Her Majesty, the Minister, any officer or employee of the Department of Finance or any person acting under the direction of the Minister for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under this Act are intended or authorized to be executed or performed.

Marginal note:Compliance orders

45 If a person fails to comply with a provision of this Act or a directive issued to it by the Minister under subsection 19.3(1) or 40(1) in connection with any matter under this Act, or a person to whom a request referred to in section 41 is directed fails to comply with the request, the Minister may apply to a superior court for an order directing the person to comply with the provision, directive or request and, on the application, the court may so order and make any further order it thinks fit.

Marginal note:No stay on judicial review

46 On an application for judicial review under the Federal Courts Act of a designation under subsection 37(1) or of a directive issued under subsection 19.3(1) or 40(1), no stay of the designation or directive shall be granted pending the final disposition of the application.

Marginal note:Enforcement of decision

• 46.1 (1) An order of a compliance panel established under paragraph 8(1)(a) of Canadian Payments Association By-law No. 6 — Compliance may be made an order of the Federal Court or of a superior court of a province and may be enforced in the same manner as an order of that court as if it had been an order of that court on the date of the decision.

• Marginal note:Procedure

  (2) An order of a compliance panel may be made an order of a court in accordance with the usual practice and procedure of the court in such matters, if any, or by the filing of a certified copy of the decision with the registrar of the court.

• Marginal note:Effect of rescission or variation

  (3) If an order of a compliance panel that has been made an order of a court is rescinded or varied by a subsequent order of the compliance panel, the order of the court is vacated and the subsequent order may be made an order of the court in accordance with subsection (2).

• Marginal note:Saving

  (4) The President may enforce any order of a compliance panel whether or not the order has been made an order of a court.

Marginal note:Offence and punishment

47 Every person who, without reasonable cause, contravenes any provision of this Act is guilty of an offence and

• (a) in the case of a natural person, liable on summary conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding twelve months, or to both; or

• (b) in the case of any other entity, liable on summary conviction to a fine not exceeding $500,000.

Marginal note:Delegation

48 The Minister may delegate any of the Minister’s powers, duties and functions under this Act to any Minister of State appointed under the Ministries and Ministers of State Act to assist the Minister.

49 [Repealed, 2024, c. 15, s. 229]

Marginal note:Review

50 On the fourth anniversary of the day on which this section comes into force, the Minister shall cause to be conducted a review of this Act and its operation and cause a report on the review to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the review is completed.