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Version of document from 2012-12-14 to 2014-12-15:

Payment Clearing and Settlement Act

S.C. 1996, c. 6, Sch.

Assented to 1996-07-31

An Act respecting the regulation of systems for the clearing and settlement of payment obligations

[Enacted as the Schedule to 1996, c. 6, in force July 31, 1996, see SI/96-58.]
Preamble

Whereas Parliament recognizes that the stability of the financial system in Canada and the maintenance of efficient financial markets are important to the health and strength of the national economy;

Whereas systems established for the clearing and settlement of payment obligations among financial institutions are an essential element of the financial system in Canada and must be properly designed and operated in order to control risk to the financial system in Canada and contribute to its stability;

Whereas the Bank of Canada, in promoting the economic and financial welfare of Canada, takes actions to promote the efficiency and stability of the Canadian financial system, including providing the means of settlement of Canadian dollar payments, acting as lender of last resort and, in consultation with other central banks, developing and implementing standards and practices to recognize and manage risk associated with systems for clearing and settling payment obligations;

And whereas Parliament recognizes that it is desirable and in the national interest to provide for the supervision and regulation of such clearing and settlement systems in order to control risk to the financial system in Canada and promote its efficiency and stability;

NOW, THEREFORE, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short Title

Marginal note:Short title

 This Act may be cited as the Payment Clearing and Settlement Act.

Interpretation

Marginal note:Definitions

 The following definitions apply in this Act.

Bank

banque

Bank means the Bank of Canada; (banque)

Canadian participant

participant canadien

Canadian participant means a participant that is incorporated or formed under an enactment of Canada or a province. (participant canadien)

central counter-party

intermédiaire

central counter-party means a corporation, association, partnership, agency or other entity in a clearing and settlement system with whom all participant’s payment rights and obligations are netted to produce a single amount owing as between each participant and the central counter-party; (intermédiaire)

clearing and settlement system

système de compensation et de règlement

clearing and settlement system means a system or arrangement for the clearing or settlement of payment obligations or payment messages in which

  • (a) there are at least three participants, at least one of which is a Canadian participant and at least one of which has its head office in a jurisdiction other than the jurisdiction where the head office of the clearing house is located;

  • (b) clearing or settlement is all or partly in Canadian dollars; and

  • (c) except in the case of a system or arrangement for the clearing or settlement of derivatives contracts, the payment obligations that arise from clearing within the system or arrangement are ultimately settled through adjustments to the account or accounts of one or more of the participants at the Bank.

For greater certainty, it includes a system or arrangement for the clearing or settlement of securities transactions, derivatives contracts, foreign exchange transactions or other transactions if the system or arrangement also clears or settles payment obligations arising from those transactions. (système de compensation et de règlement)

clearing house

chambre de compensation

clearing house means a corporation, association, partnership, agency or other entity that provides clearing or settlement services for a clearing and settlement system. It includes a securities and derivatives clearing house, as defined in subsection 13.1(3), but does not include a stock exchange or the Bank. (chambre de compensation)

eligible financial contract

contrat financier admissible

eligible financial contract has the same meaning as in subsection 22.1(2) of the Winding-up and Restructuring Act; (contrat financier admissible)

Minister

ministre

Minister means the Minister of Finance; (ministre)

participant

établissement participant

participant means a member of a clearing house or a party to an arrangement that establishes a clearing and settlement system; (établissement participant)

systemic risk

risque systémique

systemic risk means the risk that the inability of a participant to meet its obligations in a clearing and settlement system as they become due or a disruption to a clearing and settlement system could, through the transmittal of financial problems through the system, cause

  • (a) other participants in the clearing and settlement system to be unable to meet their obligations as they become due,

  • (b) financial institutions in other parts of the Canadian financial system to be unable to meet their obligations as they become due, or

  • (c) the clearing and settlement system’s clearing house or the clearing house of another clearing and settlement system within the Canadian financial system to be unable to meet its obligations as they become due. (risque systémique)

  • 1996, c. 6, s. 162 (Sch., s. 2)
  • 2007, c. 29, s. 110
  • 2012, c. 5, s. 213, c. 31, s. 168

PART IClearing and Settlement System Regulation

Designated Clearing and Settlement Systems

Marginal note:Interpretation

 In this Part, “designated clearing and settlement system” means a clearing and settlement system designated under subsection 4(1).

Marginal note:Designation by Governor of Bank

  •  (1) Where the Governor of the Bank is of the opinion that a clearing and settlement system may be operated in such a manner as to pose a systemic risk, the Governor may, if the Minister is of the opinion that it is in the public interest to do so, designate the clearing and settlement system as a clearing and settlement system that is subject to this Part.

  • Marginal note:Revocation

    (2) The Governor of the Bank may revoke a designation if he or she is of the opinion that the designated clearing and settlement system may be operated in a manner that no longer poses a systemic risk and the Minister is of the opinion that revoking the designation is in the public interest.

  • Marginal note:Notice

    (3) If a designation is made or revoked, the Governor of the Bank shall, in writing, so inform in advance the clearing and settlement system’s clearing house and shall cause a copy of the designation or revocation, as the case may be, to be published in the Canada Gazette.

  • 1996, c. 6, s. 162 (Sch., s. 4)
  • 2007, c. 6, s. 441

Agreements

Marginal note:Financial arrangements, etc.

 The Bank may enter into an agreement with a clearing house or a participant, or both, in respect of

  • (a) netting arrangements;

  • (b) risk-sharing and risk-control mechanisms;

  • (c) certainty of settlement and finality of payment;

  • (d) the nature of financial arrangements among participants;

  • (e) the operational systems and financial soundness of the clearing house; and

  • (f) such other matters pertaining to systemic risk as may be agreed on by the parties to the agreement.

Directives

Marginal note:Governor may issue

  •  (1) Where the Governor of the Bank is of the opinion that

    • (a) a clearing house for a designated clearing and settlement system is engaging in or is about to engage in any act, omission or course of conduct,

    • (b) a participant is engaging in or is about to engage in any act, omission or course of conduct with respect to its participation in the designated clearing and settlement system, or

    • (c) the designated clearing and settlement system is operating or is about to operate in a way

    that results or is likely to result in systemic risk being inadequately controlled, the Governor may issue a directive in writing to the clearing house requiring it, within such time as the Governor considers necessary and may specify in the directive, to

    • (d) cease or refrain from engaging in the act, omission or course of conduct or have the participants cease or refrain from engaging in the act, omission or course of conduct, and

    • (e) perform such acts or have the participants perform such acts as in the opinion of the Governor are necessary to remedy the situation.

  • Marginal note:Directive to participants

    (2) Where the Governor of the Bank has formed an opinion under subsection (1) that systemic risk is being inadequately controlled and

    • (a) the clearing house fails to comply with a directive that has been issued to it under that subsection,

    • (b) the designated clearing and settlement system does not have a clearing house located in Canada, or

    • (c) in the opinion of the Governor,

      • (i) the systemic risk is being inadequately controlled due to an act, omission or course of conduct by a participant with respect to its participation in the designated clearing and settlement system, and

      • (ii) the act, omission or course of conduct is not subject to the by-laws, agreements, rules, procedures, guides or other documentation governing the designated clearing and settlement system,

    the Governor may issue a directive in writing to the participants requiring them, within such time as the Governor considers necessary and may specify in the directive, to

    • (d) cease or refrain from engaging in certain acts, omissions or courses of conduct with respect to their participation in the designated clearing and settlement system, and

    • (e) perform such acts with respect to their participation as the Governor considers necessary to remedy the situation.

  • Marginal note:Directive limited

    (3) For greater certainty, a directive under this section may not be made in respect of

    • (a) the capital adequacy of a participant;

    • (b) the management of its investments;

    • (c) its corporate governance;

    • (d) its relations with customers who are not themselves participants in the designated clearing and settlement system;

    • (e) its ownership structure; or

    • (f) any other matter that is not directly related to its participation in the designated clearing and settlement system.

  • Marginal note:Directive may apply to statutory system

    (4) Subject to the approval of the Minister, a directive, if it so provides, applies to a designated clearing and settlement system that is established by or under a statute.

Bank Powers

Marginal note:General powers

 The Bank may do all or any of the following things in relation to a designated clearing and settlement system and its clearing house:

  • (a) provide a secured or unsecured guarantee of settlement by participants;

  • (b) make liquidity loans to the clearing house and the central counter-party; and

  • (c) act as the central counter-party to the participants.

Settlement Provisions

Marginal note:Validity, etc.

  •  (1) Notwithstanding anything in any statute or other law of Canada or a province,

    • (a) the settlement rules of a designated clearing and settlement system are valid and are binding on the clearing house, the participants, a central counter-party and the Bank and any action may be taken or payment made in accordance with the settlement rules;

    • (b) the obligation of a participant, a clearing house or a central counter-party to make payment to a participant and the right of a participant, a clearing house or a central counter-party to receive payment from a participant, a clearing house or a central counter-party shall be netted and a net settlement or close-out amount shall be determined in accordance with the settlement rules, if they so provide; and

    • (c) if a payment is made, property is delivered or an interest in, or in Quebec a right to, property is transferred in accordance with the settlement rules of a designated clearing and settlement system, the payment, delivery or transfer shall not be required to be reversed, repaid or set aside.

  • Marginal note:Payments not subject to set aside provisions

    (2) An entry to or a payment out of the account of a participant, a clearing house or a central counter-party at the Bank to settle a payment obligation in a designated clearing and settlement system shall not be the subject of any provision or order that operates as a stay of that activity.

  • Marginal note:Rights, etc., not subject to stay

    (3) The rights and remedies of a participant, a clearing house, a central counter-party or the Bank in respect of collateral granted to it as security for a payment or the performance of an obligation incurred in a designated clearing and settlement system may not be the subject of any stay provision or order affecting the ability of creditors to exercise rights and remedies with respect to the collateral.

  • Marginal note:Sections 39.15 and 39.152 of Canada Deposit Insurance Corporation Act

    (3.1) Despite subsections (1) to (3) and the settlement rules, no action may be taken in respect of an eligible financial contract, as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act, if it is prevented by subsection 39.15(7.01), (7.1) or (7.11) or section 39.152 of that Act.

  • Marginal note:Application of Canadian law

    (4) Notwithstanding that all or part of the administration or operation of a designated clearing and settlement system is conducted outside Canada or that its settlement rules are governed by the laws of a foreign jurisdiction, where in any judicial proceedings in Canada a court determines that the rights and obligations of any person arising out of or in connection with the operation of the designated clearing and settlement system are governed in whole or in part by Canadian law, the provisions of this section shall be applied to the extent that the Canadian law applies in determining those rights and obligations.

  • Marginal note:Interpretation

    (5) In this section, settlement rules means the rules, however established, that provide the basis on which payment obligations, delivery obligations or other transfers of property or interests in, or in Quebec rights to, property are made, calculated, netted or settled and includes rules for the taking of action in the event that a participant is unable or likely to become unable to meet its obligations to the clearing house, a central counter-party, other participants or the Bank.

  • 1996, c. 6, s. 162 (Sch., s. 8)
  • 1999, c. 28, s. 132(E)
  • 2012, c. 31, s. 169

Notices and Information

Marginal note:Notice required of significant changes

  •  (1) Every clearing house shall, in respect of its designated clearing and settlement system, provide the Bank with reasonable notice in advance of any change to be made by the clearing house that is of a significant nature in relation to the designated clearing and settlement system and, without limiting the generality of the foregoing, the notice shall be provided in respect of any change affecting

    • (a) the constating documents and by-laws of the clearing house;

    • (b) the operation of the designated clearing and settlement system; or

    • (c) the by-laws, agreements, rules, procedures, guides or other documentation governing the designated clearing and settlement system.

  • Marginal note:Notice required of other changes

    (2) Every clearing house shall, forthwith after it makes any other change in relation to the designated clearing and settlement system, provide the Bank with written notice of the change and, without limiting the generality of the foregoing, the notice shall be provided in respect of any change affecting

    • (a) the composition of a board of directors of the clearing house due to resignation or otherwise; or

    • (b) the appointed auditor of the clearing house.

  • Marginal note:Information to be provided to Bank

    (3) Every clearing house shall, in respect of its designated clearing and settlement system, provide the Bank with such information, at such times and in such form as the Bank may in writing require.

Audits and Inspections

Marginal note:Powers of Bank

  •  (1) The Bank may, for the purposes of carrying out its functions under this Act, conduct audits and inspections of a clearing house, and every clearing house shall, as required, assist the Bank to the extent necessary to enable the Bank to carry out an audit or inspection.

  • Marginal note:Powers of Bank

    (2) For the purpose of obtaining evidence under oath in relation to an audit or inspection under subsection (1), the Bank has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act.

Cost of Regulation

Marginal note:Bank may impose fees

  •  (1) The Bank may annually impose a fee on a clearing house in respect of the cost to the Bank for that year of the administration of this Act in respect of the designated clearing and settlement system of the clearing house.

  • Marginal note:Recovery of fees

    (2) A fee imposed under subsection (1) constitutes a debt due to the Bank and may be recovered as such in any court of competent jurisdiction.

PART IIGeneral

Bank Powers

Marginal note:To act as custodian, etc.

 The Bank may do all or any of the following things in relation to a clearing and settlement system and its clearing house:

  • (a) be a participant and participate in the loss-sharing mechanism;

  • (b) act as a custodian of financial assets or act as a settlement agent, or both; and

  • (c) notwithstanding section 23 of the Bank of Canada Act, accept and pay interest on deposits from the clearing house, a participant or the central counter-party.

Netting Agreements

Marginal note:Termination

  •  (1) Despite anything in any law relating to bankruptcy or insolvency or any order of a court made in respect of a reorganization, arrangement or receivership involving insolvency, a party to a netting agreement may terminate the agreement and determine a net termination value or net settlement amount in accordance with the provisions of the agreement and the party entitled to the net termination value or net settlement amount is to be a creditor of the party owing the net termination value or net settlement amount for that value or amount.

  • Marginal note:Eligible financial contract

    (1.1) If a netting agreement referred to in subsection (1) is an eligible financial contract, a party to the agreement may also, in accordance with the provisions of that agreement, deal with financial collateral including

    • (a) selling or foreclosing or, in the Province of Quebec, surrendering financial collateral; and

    • (b) setting off or compensating financial collateral or applying the proceeds or value of financial collateral.

  • Marginal note:Sections 39.15 and 39.152 of Canada Deposit Insurance Corporation Act

    (1.2) Despite subsections (1) and (1.1), no action may be taken in respect of an eligible financial contract, as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act, if it is prevented by subsection 39.15(7.01), (7.1) or (7.11) or section 39.152 of that Act.

  • Marginal note:Interpretation

    (2) The following definitions apply in this section.

    financial collateral

    garantie financière

    financial collateral means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

    • (a) cash or cash equivalents, including negotiable instruments and demand deposits,

    • (b) securities, a securities account, a securities entitlement or a right to acquire securities,

    • (c) a futures agreement or a futures account,

    • (d) an assignment of a right to payment or delivery against a clearing house, or

    • (e) any other collateral that is prescribed. (garantie financière)

    financial institution

    institution financière

    financial institution means

    • (a) a financial institution within the meaning of section 2 of the Trust and Loan Companies Act,

    • (b) such other entity or entity within a class of entities engaged primarily in the business of providing financial services as may be designated by order of the Governor in Council to be a financial institution for the purposes of this section,

    • (c) a trustee, manager or administrator of a pension fund maintained to provide benefits under a pension plan registered under the Income Tax Act,

    • (d) the Canada Pension Plan Investment Board, or

    • (e) the Public Sector Pension Investment Board; (institution financière)

    net termination value

    reliquat net

    net termination value means the net amount obtained after setting off or compensating or otherwise netting the obligations between the parties to a netting agreement in accordance with its provisions; (reliquat net)

    netting agreement

    accord de compensation

    netting agreement means an agreement between two or more financial institutions, between the Bank and one or more financial institutions or between a participant and a customer to which the participant provides clearing services that is

    • (a) an eligible financial contract; or

    • (b) an agreement that provides for the netting or set-off or compensation of present or future obligations to make payments against the present or future rights to receive payments. (accord de compensation)

    title transfer credit support agreement

    accord de transfert de titres pour obtention de crédit

    title transfer credit support agreement means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract; (accord de transfert de titres pour obtention de crédit)

  • 1996, c. 6, s. 162 (Sch., s. 13)
  • 1997, c. 40, s. 109
  • 1999, c. 28, s. 133, c. 34, s. 228
  • 2007, c. 29, s. 111
  • 2012, c. 31, s. 170

Securities and Derivatives Clearing Houses

Marginal note:Securities and derivatives clearing houses

  •  (1) Nothing in any law relating to bankruptcy or insolvency or in any order of a court made in respect of the administration of a reorganization, arrangement or receivership involving insolvency, including in any foreign law or order of a foreign court, has the effect of

    • (a) preventing a securities and derivatives clearing house from

      • (i) if it is a party to a netting agreement, terminating the agreement and determining a net termination value or net settlement amount in accordance with the provisions of the agreement, with the party entitled to the value or amount becoming a creditor of the party owing the value or amount for that value or amount, or

      • (ii) acting in accordance with any of its rules that provide the basis on which payment and delivery obligations are calculated, netted and settled; or

    • (b) interfering with the rights or remedies of a securities and derivatives clearing house in respect of any collateral that has been granted to it as security for the performance of an obligation incurred in respect of the clearing and settlement services provided by the securities and derivatives clearing house.

  • Marginal note:Sections 39.15 and 39.152 of Canada Deposit Insurance Corporation Act

    (1.1) Despite subsection (1), no action may be taken in respect of an eligible financial contract, as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act, if it is prevented by subsection 39.15(7.01), (7.1) or (7.11) or section 39.152 of that Act.

  • Marginal note:Designation by Minister

    (2) For the purpose of this section, the Minister may designate an entity, other than one mentioned in paragraph (a), (b) or (c) of the definition “securities and derivatives clearing house” in subsection (3), as a securities and derivatives clearing house if

    • (a) the Minister is of the opinion that it is in the public interest to do so; and

    • (b) the entity provides clearing and settlement services to its clearing members in respect of transactions that involve securities or derivatives.

  • Marginal note:Definitions

    (3) The definitions in this subsection apply in this section.

    clearing member

    membre

    clearing member means a person who uses the services of a securities and derivatives clearing house. (membre)

    net termination value

    reliquat net

    net termination value means the net amount obtained after setting off or compensating or otherwise netting the obligations between a securities and derivatives clearing house and a clearing member in accordance with the netting agreement. (reliquat net)

    netting agreement

    accord de compensation

    netting agreement means an agreement between a securities and derivatives clearing house and a clearing member that is

    • (a) an eligible financial contract; or

    • (b) an agreement that provides for the netting or setting off or compensation of present or future obligations to make payments or deliveries against present or future rights to receive payments or take deliveries. (accord de compensation)

    securities and derivatives clearing house

    chambre spécialisée

    securities and derivatives clearing house means, in addition to an entity designated under subsection (2),

    • (a) the Canadian Derivatives Clearing Corporation, incorporated under the Canada Business Corporations Act;

    • (b) the CDS Clearing and Depository Services Inc., a corporation incorporated under the Canada Business Corporations Act; or

    • (c) the WCE Clearing Corporation, incorporated under The Corporations Act, chapter C225 of the Re-enacted Statutes of Manitoba 1987. (chambre spécialisée)

  • 2002, c. 14, s. 1
  • 2007, c. 6, s. 442, c. 29, s. 112
  • 2012, c. 31, s. 171

Information Requirements

Marginal note:Information requests re systems or arrangements

  •  (1) Where the Governor of the Bank has reasonable grounds to believe that a system or arrangement exists for the clearing and settlement of payment obligations or payment messages but the Bank requires further information in order to determine whether the system or arrangement is a clearing and settlement system, the Governor may, with the agreement of the Minister, request a person who is a party to the system or arrangement to provide the Bank with such information and documents regarding the system or arrangement as the Bank may require to make the determination.

  • Marginal note:Compliance with request required

    (2) Every person to whom a request is directed under subsection (1) shall comply with the request.

  • Marginal note:Systemic risk information

    (3) Every clearing house shall, in respect of its clearing and settlement system, provide the Bank with such information and documents as the Bank may from time to time require to enable the Bank to determine whether the clearing and settlement system poses a systemic risk and, without limiting the generality of the foregoing, the clearing house shall, in respect of the clearing and settlement system, provide the Bank with

    • (a) the names of its participants;

    • (b) copies of its constating documents, by-laws, resolutions, agreements, rules, procedures and other documents governing its establishment and operation;

    • (c) the names of its directors, committee members and auditors;

    • (d) copies of its reports, statements or other documents that are required to be filed with any government agency or regulatory body; and

    • (e) copies of its financial statements.

Enforcement

Marginal note:Compliance orders

 If a clearing house or a participant fails to comply with a provision of this Act, with a directive issued to it by the Governor of the Bank in connection with any matter under this Act or with an agreement that it has entered into under section 5, or if a person to whom a request referred to in subsection 14(1) is directed fails to comply with the request, the Bank or the Governor may apply to a superior court for an order directing the clearing house, participant or person, as the case may be, to comply with the provision, directive, agreement or request and, on the application, the court may so order and make any further order it thinks fit.

  • 1996, c. 6, s. 162 (Sch., s. 15)
  • 2012, c. 5, s. 214

Marginal note:Offence and punishment

 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.

Guidelines

Marginal note:Governor or Bank may issue

 The Governor of the Bank or the Bank may issue guidelines in respect of any matter relating to the administration or enforcement of this Act.

Disclosure of Information

Marginal note:Information, etc., confidential

  •  (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 Bank from disclosing any information or documents

    • (a) to any government agency or regulatory body, charged with the regulation of

      • (i) financial institutions, as defined in section 2 of the Trust and Loan Companies Act, for purposes related to that regulation, or

      • (ii) entities that provide clearing or settlement services in connection with securities transactions or eligible financial contracts, for purposes related to that regulation, and

    • (b) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Chairperson of the Canada Deposit Insurance Corporation or any officer of that Corporation authorized in writing by the Chairperson,

    if the Bank 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:Disclosure permitted

    (3) Nothing in subsection (1) prevents the Bank from disclosing any information or documents pertaining to a clearing and settlement system that the Bank has designated under subsection 4(1) to any government agency or regulatory body charged with the regulation of systems or arrangements for the clearing or settlement of payment obligations or payment messages, for purposes related to that regulation, if the Bank is satisfied that the information or documents will be treated as confidential by the agency or body to whom they are disclosed.

  • 1996, c. 6, s. 162 (Sch., s. 18)
  • 2012, c. 5, s. 215

Designations and Directives

Marginal note:Not statutory instruments

 A designation under subsection 4(1) or a directive issued under this Act is not a statutory instrument for the purposes of the Statutory Instruments Act.

Liability

Marginal note:No liability if in good faith

 No action lies against Her Majesty, the Minister, the Bank, any officer, employee or director of the Bank or any person acting under the direction of the Governor of the Bank 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.

  • 1996, c. 6, s. 162 (Sch., s. 20)
  • 1999, c. 28, s. 134

Judicial Review

Marginal note:No stay on judicial review

 On an application for judicial review under the Federal Courts Act of any designation under subsection 4(1) or of any directive issued under this Act, no stay of the designation or directive shall be granted pending the final disposition of the application.

  • 1996, c. 6, s. 162 (Sch., s. 21)
  • 2002, c. 8, s. 182

Participants

Marginal note:Participants responsible where no clearing house

  •  (1) Where a clearing and settlement system does not have a clearing house located in Canada, the Canadian participants

    • (a) shall comply with the obligations imposed under this Act on a clearing house in respect of a clearing and settlement system, and

    • (b) have all the rights conferred by this Act on a clearing house in respect of a clearing and settlement system

    in the same manner and to the same extent as if the Canadian participants were the clearing house on which those obligations and rights are imposed or conferred and, for that purpose, any action that the Bank may take in respect of a clearing house may only be taken in respect of the Canadian participants.

  • Marginal note:Participants responsible where clearing house fails to comply, etc.

    (2) Where a clearing house fails to comply with the obligations imposed on it under this Act in respect of its clearing and settlement system or otherwise contravenes this Act, 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 if the participants were the clearing house on which the obligations are imposed or that committed the contravention.

  • (3) [Repealed, 2012, c. 5, s. 216]

  • 1996, c. 6, s. 162 (Sch., s. 22)
  • 2012, c. 5, s. 216

Marginal note:Participation of authorized foreign banks

  •  (1) An authorized foreign bank that is or wishes to be a participant in a designated clearing and settlement system shall, from time to time, provide the Governor of the Bank with any information regarding the application of foreign laws to the authorized foreign bank that the Governor considers necessary.

  • Marginal note:Prohibition or conditions

    (2) If the Governor is of the opinion, on the basis of the information provided under subsection (1) or of any other information that the Governor considers relevant, that the authorized foreign bank’s participation in the designated clearing and settlement system poses, or is likely to pose, a systemic risk or an unacceptable risk to the Bank in guaranteeing settlement of the authorized foreign bank’s obligations, the Governor may prohibit it from being a participant or may require it to comply with the conditions with respect to its participation that the Governor considers necessary.

  • Marginal note:Powers of Governor of Bank

    (3) The Governor’s powers under subsection (2) are in addition to all other powers conferred on the Governor and the Bank by this Act.

  • Marginal note:Definitions

    (4) The definitions in this subsection apply in this section.

    authorized foreign bank

    banque étrangère autorisée

    authorized foreign bank means an authorized foreign bank within the meaning of section 2 of the Bank Act. (banque étrangère autorisée)

    designated clearing and settlement system

    système de compensation et de règlement

    designated clearing and settlement system has the meaning assigned to that expression by section 3. (système de compensation et de règlement)

  • 1999, c. 28, s. 135

Marginal note:Information

 A participant is not required to provide information to the Bank under this Act concerning another participant of a clearing and settlement system if that information is not available to all the participants.

Regulations

Marginal note:Financial collateral

 The Governor in Council may make regulations prescribing collateral for the purpose of paragraph (e) of the definition financial collateral in subsection 13(2).

  • 2012, c. 31, s. 172

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