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Canadian Payments Association By-law No. 9 — Lynx (SOR/2021-182)

Regulations are current to 2024-10-30 and last amended on 2022-06-01. Previous Versions

PART 3Lynx Operations (continued)

Settlement (continued)

Marginal note:Finality for participants

 A sending participant’s payment to a receiving participant is final and irrevocable when the Lynx payment obligation is settled through Lynx in accordance with subsection 32(1).

Marginal note:Settlement queues

  •  (1) If a Lynx payment obligation cannot be settled through Lynx immediately after the settlement instructions are sent to a settlement mechanism, those instructions must

    • (a) be held in the settlement queue for that settlement mechanism, in the sequence set out in the Rules, for processing later in the payments processing cycle; or

    • (b) be rejected, if that settlement mechanism does not have a settlement queue.

  • Marginal note:Removal from queue

    (2) A sending participant may, at any time, remove from a settlement queue any settlement instructions that were contained in a payment message that it sent.

Marginal note:Rejection of settlement instructions

 Settlement instructions must be rejected if

  • (a) they remain in the settlement queue when the settlement mechanism closes; or

  • (b) they remain in the conditional release mechanism when the finalization window begins.

Payments to Payees

Marginal note:Payment

  •  (1) After a Lynx payment obligation is settled through Lynx and the receiving participant has the payment message and the payment confirmation reference number, the receiving participant must make the amount of the payment finally and irrevocably available to the payee

    • (a) in the case where the payee makes a reasonable request for payment before the end of the payments processing cycle, as soon as feasible after the request is received, but by no later than the end of the payments processing cycle; and

    • (b) in any other case, by no later than the end of the payments processing cycle.

  • Marginal note:Service charges

    (2) A receiving participant may deduct the amount of a service charge from the amount of a payment and must comply with the deduction and disclosure procedures, if any, set out in the Rules.

  • Marginal note:Final and irrevocable

    (3) The amount of a payment is made finally and irrevocably available to a payee when the earliest of the following actions is taken:

    • (a) the receiving participant credits the amount to an account of the payee;

    • (b) the receiving participant lawfully applies the amount against a debt of the payee; and

    • (c) the receiving participant otherwise makes the amount of the payment accessible to the payee.

Marginal note:Representation to payee

  •  (1) A receiving participant must not represent to a payee that a payment it has made to the payee is a payment under section 36 unless there is an associated Lynx payment obligation that has been settled through Lynx.

  • Marginal note:Finality for payee

    (2) If a receiving participant makes a payment available to a payee and there is no associated Lynx payment obligation or that obligation has not yet been settled through Lynx, the amount of the payment is made finally and irrevocably available to the payee if

    • (a) the payee requests that the receiving participant provide the payment confirmation reference number; and

    • (b) the receiving participant provides the payee with a number that it represents as being the payment confirmation reference number.

Marginal note:Exceptional circumstances

 If any of the following exceptional circumstances exist, the receiving participant must comply with the procedures set out in the Rules for those circumstances instead of making the amount of the payment finally and irrevocably available to the payee in accordance with section 36:

  • (a) the payment message received by the receiving participant contains an error or omission specified in the Rules;

  • (b) the payment message is received by the receiving participant after the time specified in the Rules;

  • (c) the amount of the payment to be made available must be converted into a currency other than Canadian dollars;

  • (d) action is required by the branch or office at which the amount of the payment is to be made available to the payee and the receiving participant receives the payment message and payment confirmation reference number after the time specified in the Rules;

  • (e) the receiving participant cannot make the amount of the payment available due to circumstances beyond its control;

  • (f) the receiving participant cannot make the amount of the payment available because of a restriction it has imposed on the payee or the account to which the payment is to be credited;

  • (g) in order to comply with a law or an order of a court, the receiving participant cannot make the amount of the payment available to the payee; or

  • (h) the receiving participant agrees to the payee’s request that the amount of the payment not be made available to them.

Marginal note:Payment confirmation reference number

 A receiving participant must provide a payee with the payment confirmation reference number if the receiving participant has the number and it is requested by the payee.

Marginal note:Payee identifier

  •  (1) A receiving participant who receives a payment message that identifies the payee both by name and an account number or other identifier specified in the Rules is not required to detect any inconsistency between them and may, for the purpose of making the amount of the payment available to the payee, rely on that account number or other identifier.

  • Marginal note:Reliance on payee identifier

    (2) A receiving participant who relies on an account number or other identifier under subsection (1) is deemed to have complied with section 36 even if that reliance results in the amount of the payment being made available to a person other than the payee identified by name in the payment message.

Marginal note:Obligations to payee

 The obligations of a receiving participant under any of sections 36 to 40 are to the payee and no obligation is owed by the receiving participant to the sending participant, the payor or any other person solely because of any of those sections.

Marginal note:Requirements not limited

 The requirements set out in sections 36 to 41 must not be limited by the Rules or any agreement.

Repayment of Intraday Loan

Marginal note:Consolidation of balances

  •  (1) Before the beginning of the finalization window, the Association must, for each participant, consolidate into the participant’s Lynx account for the real-time settlement mechanism the balances in all of the participant’s other Lynx accounts.

  • Marginal note:Transfers and entries

    (2) The Association must

    • (a) make the necessary transfers to carry out the consolidation referred to in subsection (1); and

    • (b) make the corresponding entries to the accounts referred to in subsection (1) in accordance with the procedures set out in the Rules.

Marginal note:Repayment

  •  (1) If the balance in a participant’s intraday loan account is greater than zero when the finalization window begins, the Association must

    • (a) transfer, from the participant’s Lynx account for the real-time settlement mechanism to the participant’s intraday loan account, the lesser of

      • (i) an amount that is equal to the balance in the participant’s intraday loan account, and

      • (ii) the balance in the participant’s Lynx account for the real time settlement mechanism; and

    • (b) make the corresponding entries to those accounts in accordance with the procedures set out the Rules.

  • Marginal note:Balances provided

    (2) After making any transfer required under subsection (1), the Association must provide the Bank with the balance in the participant’s Lynx account for the real-time settlement mechanism and the participant’s intraday loan account.

  • Marginal note:Transfer to Bank’s Lynx account

    (3) The Association must transfer the amount of the balances consolidated under subsection 43(1), less any amount transferred under subsection (1), to the Bank’s Lynx account for the real-time settlement mechanism and make the corresponding entries to those accounts in accordance with the procedures set out in the Rules.

  • Marginal note:Rights and liabilities

    (4) For greater certainty, the respective rights and liabilities of the Bank and a participant in respect of the amount transferred to the Bank under subsection (3) are governed in accordance with the terms of the agreements between them.

Overnight Advances

Marginal note:Advance by Bank

  •  (1) If the balance in a participant’s intraday loan account remains greater than zero after a transfer referred to in paragraph 44(1)(a) has been made, the Bank must make an overnight advance to the participant in an amount equal to the outstanding balance of the intraday loan.

  • Marginal note:Transfer and entries

    (2) The Association must

    • (a) transfer the amount of the overnight advance from the Bank’s Lynx account for the real-time settlement mechanism to the participant’s Lynx account for that settlement mechanism;

    • (b) transfer the amount transferred under paragraph (a) to the participant’s intraday loan account; and

    • (c) make the corresponding entries to those accounts in accordance with the procedures set out in the Rules.

  • Marginal note:Rights and liabilities

    (3) For greater certainty, the respective rights and liabilities of the Bank and a participant in respect of an overnight advance are governed in accordance with the terms of the agreements between them.

Marginal note:Intraday loan repaid

 A participant’s intraday loan is repaid when the balance of in its intraday loan account is reduced to zero by means of a transfer referred to in paragraph 44(1)(a) or subsection 45(2).

Marginal note:Application of sections 36 to 46

  •  (1) Subject to subsection (2), sections 36 to 46 apply in respect of a participant who is subject to a suspension or revocation under this By-law.

  • Marginal note:Payment to payee

    (2) A participant who is subject to a suspension or revocation under this By-law is required to make the amount of a payment available to a payee only if the associated Lynx payment obligation is settled through Lynx before the suspension or revocation, as the case may be.

End of Payments Processing Cycle

Marginal note:End of cycle

 The payments processing cycle ends when the Association has made all transfers and entries required under section 44 and subsection 45(2).

Emergencies

Marginal note:Emergency condition

 If communications between Lynx and a participant are interrupted, the ability of Lynx to receive, send or otherwise process payment messages or to settle Lynx payment obligations is impaired, the safe and efficient operation of Lynx is placed into question or any other emergency affects its operations, the President, with the prior agreement of the Bank and in accordance with the procedures set out in the Rules, may

  • (a) direct that the Lynx operating schedule, or the conduct of any event in the schedule, be changed;

  • (b) direct a participant not to send payment messages for a specified period of time;

  • (c) direct that any day is not a business day; or

  • (d) direct the Association or a participant to take any other action necessary to ensure

    • (i) the safe and efficient operation of Lynx, or

    • (ii) the continued processing of payment messages or settlement of Lynx payment obligations.

PART 4Consequential Amendments, Repeal and Coming into Force

Consequential Amendments

By-law No. 7 Respecting the Large Value Transfer System

 [Amendments]

 [Amendments]

 [Amendments]

 [Amendments]

 

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