Payment Clearing and Settlement Act

Marginal note:Definitions

2 In this Act,

Bank

banque

Bank means the Bank of Canada; (banque)

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 bank,

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

• (c) 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

and, for greater certainty, includes a system or arrangement for the clearing or settlement of securities transactions, foreign exchange transactions or other transactions where 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, 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)