Law:Canadian Payments Act

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R.s.c., 1985, c. C-21

An Act respecting the Canadian Payments Association and the regulation of systems and arrangements for the making of payments


Contents

Short Title

Short title

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

R.S., 1985, c. C-21, s. 1; 2001, c. 9, s. 218.


Interpretation

Definitions

2. (1) In this Act,

“Association”

« Association »

“Association” means the Canadian Payments Association established by section 3;

“authorized foreign bank”

« banque étrangère autorisée »

“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;

“Board”

« conseil »

“Board” means the Board of Directors of the Association;

“by-law”

« règlement administratif »

“by-law” means a by-law of the Association;

“central cooperative credit society” and “central”

« société coopérative de crédit centrale » ou « centrale »

“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;

“Chairman”(Repealed, 2001, c. 9, s. 219)

“Chairperson”

« président »

“Chairperson” means the Chairperson of the Board referred to in section 15;

“cooperative credit association”

« association coopérative de crédit »

“cooperative credit association” means an association to which the Cooperative Credit Associations Act applies;

“Executive Committee”

« comité de direction »

pan cla“Executive Committee” means the Executive Committee established pursuant to section 20;

“federation of cooperative credit societies” or “federation”(Repealed, 2001, c. 9, s. 219)

“General Manager”(Repealed, 2007, c. 6, s. 422)

“Inspector”(Repealed, R.S., 1985, c. 18 (3rd Supp.), s. 33)

“life insurance company”

« société d’assurance-vie »

“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);

“loan company”

« société de prêt »

“loan company” means a body corporate that accepts deposits transferable by order to a third party 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);

“local cooperative credit society” and “local”

« société coopérative de crédit locale »

“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;

“member”

« membre »

“member” means any of those persons who are members of the Association pursuant to section 4;

“Minister”

« ministre »

“Minister” means the Minister of Finance;

“money market mutual fund”

« fonds mutueln instruments du marché monétaire »

“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;

“payment item”

« instrument de paiement »

“payment item” means a bill of exchange drawn on a member and includes any other class of items approved by by-law;

“President”

« président »

“President” means the President of the Association appointed under section 16;

“qualified corporation”

« société admissible »

“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;

“qualified trust”

« fiducie admissible »

“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;

“rule”

« règle »

“rule” means a rule of the Association;

“securities dealer”

class="MarginalNoteDefin« courtier en valeurs mobilières »

“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;

“Superintendent”(Repealed, 2001, c. 9, s. 219)

“trust company”

« société de fiducie »

“trust company” means a body corporate that accepts deposits transferable by order to a third party 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);

“trustee”

« fiduciaire »

“trustee”, in respect of a qualified trust, means a trustee that is a body corporate;

“user”

« usager »

“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.

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.

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.

R.S., 1985, c. C-21, s. 2; R.S., 1985, c. 18 (3rd Supp.), s. 33; 1991, c. 45, s. 546, c. 48, s. 488; 1999, c. 28, s. 110; 2001, c. 9, s. 219; 2007, c. 6, s. 422.

Previous Version

Act Binding On Her Majesty

Her Majesty

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

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.

2001, c. 9, s. 220.


Part 1. Canadian Payments Association

Establishment and Membership

Association established

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

Association not an agent of Her Majesty

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

1980-81-82-83, c. 40, s. 56.

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.

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 to a third party;

(b)�(Repealed, 2001, c. 9, s. 223)

(c) Her Majesty in right of a province or an agent thereof, if Her Majesty in right of the province or the agent thereof accepts deposits transferable by order to a third party;

(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.

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.

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.

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.

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.

Effect of resolution

(7) A member to which a resoluton 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.

R.S., 1985, c. C-21, s. 4; 1992, c. 1, s. 142; 1999, c. 28, s. 111; 2001, c. 9, s. 223; 2007, c. 6, s. 423; 2009, c. 2, s. 256.

Previous Version

Objects and Powers

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.

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.

R.S., 1985, c. C-21, s. 5; 2001, c. 9, s. 224.

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.

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.

R.S., 1985, c. C-21, s. 6; 2001, c. 9, s. 225.


Head Office

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.

1980-81-82-83, c. 40, s. 60.


Board of Directors

Composition

8. There shall be a Board of Directors of the Association consisting of sixteen persons elected or appointed in accordance with section 9.

R.S., 1985, c. C-21, s. 8; 2001, c. 9, s. 226.

Appointed director

9. (1) The Bank of Canada shall appoint

(a) an officer of the Bank to be a director of the Association; and

(b) an officer of the Bank to be an alternate director to the director appointed under paragraph (a) and the alternate director so appointed may act as a director during any period in which the director for whom he or she is an alternate is, by reason of absence or incapacity, unable to act.

Appointments by Minister

(1.1) The Minister shall appoint three directors of the Association to hold office for a term of not more than three years.

Disqualifications

(1.2) No person is eligible to be appointed under subsection (1.1) or, having been appointed under that subsection, to continue as a member of the Board who is

(a) a director, an officer or an employee of a person that is eligible to apply to be a member of the Association, or of an affiliate of such a person;

(b) employed in any capacity in the federal public administration or the public service of a province or holds 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.

Continuation in office

(1.3) If, on the expiry of the term of office of a director appointed under subsection (1.1), no new director is appointed, the director whose term of office expired may continue in office until a director is appointed under that subsection.

Election by members

(2) Subject to subsection (3), twelve directors of the Association shall be elected by the members to hold office for a term of three years, except that of those first elected four shall be elected for a term of three years, four for a term of two years and four for a term of one year.

Composition of Board

(3) For the purpose of election of directors, the members, other than the Bank of Canada, shall be grouped into seven classes, namely,

(a) banks and authorized foreign banks;

(b) centrals and cooperative credit associations;

(c) trust companies and loan companies;

(d) qualified corporations and trustees of qualified trusts;

(e) securities dealers;

(f) life insurance companies; and

(g) other members.

Removal of director

(4) If a resolution passed by a two-thirds majority of the members of a class described in subsection (3) who are present at a special meeting of members of that class called to consider the resolution provides for the recall of a director elected by that class, then, despite subsection (2), 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.

Remuneration of directors

(5) A director appointed under subsection (1.1) shall be paid by the Association such remuneration as may be fixed by by-law.

Affiliated bodies corporate

(6) For the purposes of paragraph (1.2)(a),

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

(b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

Definition of control

(7) In paragraph (6)(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 body corporate or otherwise.

R.S., 1985, c. C-21, s. 9; 1993, c. 34, s. 46(F); 1999, c. 28, s. 112; 2001, c. 9, s. 227; 2003, c. 22, s. 142(E); 2007, c. 6, s. 424.

Previous VersionVacancy

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

R.S., 1985, c. C-21, s. 10; 1993, c. 34, s. 47(F); 1999, c. 28, s. 113; 2001, c. 9, s. 228; 2007, c. 6, s. 425.

Previous VersionVacancies

11. (1) Where a vacancy among the directors occurs, the directors shall cause a meeting of the members of the class represented by the director whose departure resulted in the vacancy to be held and the members of that class may, at that meeting, elect, from among the representatives named by the members of that class, a director to fill the vacancy for the remainder of the term of the director whose departure resulted in the vacancy.

Idem

(2) Where a meeting referred to in subsection (1) is called and there is no quorum or the meeting fails to elect a director to fill a vacancy among the directors, the Board may fill the vacancy but, in filling the vacancy, the Board shall elect a representative of a member of the class represented by the director whose departure from the Board resulted in the vacancy for the remainder of the term of that director.

1980-81-82-83, c. 40, s. 64.

Election of alternates

12. At every meeting of members at which a director is elected, the members of the class that elected the director shall elect an alternate director for that director and the alternate director so elected may act as a director during any period in which the director for whom he or she is an alternate is, by reason of absence or incapacity, unable to act.

R.S., 1985, c. C-21, s. 12; 2001, c. 9, s. 229(E).

Right to vote

13. (1) Every member is entitled to vote for the directors representing the class to which the member belongs and may cast the number of votes that the member is entitled to cast, as determined by the regulations, multiplied by the number of directors of that class to be elected and the member may cast all such votes in favour of one candidate or distribute them among the candidates in any manner.

Quorum

(2) At a meeting of a class of members at which a director is to be elected, the members of that class present or deemed to be present, in person or by proxy, constitute a quorum if, together, they are entitled to cast a majority of the votes that may be cast for the election of a director by all members of that class.

(3)�(Repealed, 2001, c. 9, s. 230)

R.S., 1985, c. C-21, s. 13; 2001, c. 9, s. 230.

Canadian citizens

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

R.S., 1985, c. C-21, s. 14; 2007, c. 6, s. 426.

Previous Version

Chairperson

Chairperson

15. (1) The Chairperson of the Board shall be the director appointed by the Bank of Canada and shall perform such duties as may be prescribed by the by-laws.

Absence of Chairperson

(2) Where the Chairperson is unable to act by reason of absence or incapacity, the alternate director appointed by the Bank of Canada under subsection 9(1) shall preside at meetings of the Board and perform the other duties of the Chairperson.

Additional vote

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

R.S., 1985, c. C-21, s. 15; 2001, c. 9, ss. 232(E), 245(E); 2007, c. 6, s. 427(F).

Previous Version

President

President

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

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, the Board or the Executive Committee.

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.

R.S., 1985, c. C-21, s. 16; 2001, c. 9, s. 245(E); 2007, c. 6, s. 428.

Previous Version

Duties and Powers of Board

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.

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.

Definitions

(3) For the purposes of this section,

“debt obligation”

« titre de créance »

“debt obligation” means a bond, debenture, note or other evidence of indebtedness or guarantee of the Association, whether secured or unsecured;

“security interest”

« sûreté »

“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.

1980-81-82-83, c. 40, s. 71.

By-laws

18. (1) The Board may make such by-laws as it considers necessary for the attainment of the objects of the Association and in particular, but without limiting the generality of the foregoing, may make by-laws

(a) respecting the procedure in all business at meetings of the Board, or its committees;

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

(c) for the administration and management of the business of the Association;

(c.1) respecting the remuneration of directors appointed under subsection 9(1.1);

(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 establishing the method of determining the amount of those dues;

(f.1) respecting the payment of fees for services performed by or on behalf of the Association and establishing the method of determining the amount of those fees;

(g) establishing penalties for any failure by members to comply with the by-laws, rules and orders made under the by-laws, 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;

(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 nomination, selection and appointment of persons to be members of the Stakeholder Advisory Council.

Approval

(2) Subject to subsections (3) and (4), a by-law is not effective until approved by the Minister and when so approved must be published in the Canada Gazette and copies of the by-law must be sent to every member by the President.

Approval of by-laws establishing penalties

(3) A by-law establishing a penalty shall not be submitted to the Governor in Council for approval until it has been submitted for approval to the members and approved by them at a meeting of members.

Voting on by-law establishing penalty

(4) Every member is entitled, on a resolution to approve a by-law establishing a penalty, to one vote for each dollar that the member is required to contribute as dues under the by-laws.

R.S., 1985, c. C-21, s. 18; 2001, c. 9, s. 233; 2007, c. 6, s. 429.

Previous VersionRules

19. (1) Subject to the by-laws, the Board may make such rules as it considers necessary for the attainment of the objects of the Association and, without limiting the generality of the foregoing, may make 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.

Power of Chairperson

(2) Where a question arises at a meeting of the Board or Executive Committee as to whether or not a proposed rule is in conformity with the by-laws, the Chairperson shall decide and the decision of the Chairperson is final.

Rules to be available

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

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.

R.S., 1985, c. C-21, s. 19; 2001, c. 9, ss. 234, 245(E); 2007, c. 6, s. 430.

Previous VersionStatements of principle and standards

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

2001, c. 9, s. 235.


Disallowance

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.

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.

Minister’s disallowance

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

2001, c. 9, s. 235.


Directives

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, in writing, direct the Association to make, amend or repeal a by-law, rule or standard.

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.

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.

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.

Implementation

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

Duty to comply

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

2001, c. 9, s. 235.


Information Requirements

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.

2001, c. 9, s. 235.


Committees

Executive Committee

20. (1) The Board may, in accordance with such regulations as may be made by the Governor in Council pursuant to section 35, establish an Executive Committee, not less than three in number, consisting of the Chairperson and such other directors as the Board may designate.

Chairperson

(2) The Chairperson is the chairperson of the Executive Committee.

Additional vote

(3) The Chairperson has, in the event of a tie on any matter before the Executive Committee at a meeting thereof, a second vote.

R.S., 1985, c. C-21, s. 20; 2001, c. 9, ss. 237(E), 245(E); 2007, c. 6, s. 431(F).

Previous VersionOther committees

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

R.S., 1985, c. C-21, s. 21; 2001, c. 9, s. 238.

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.

2001, c. 9, s. 238.

Stakeholder Advisory Council

21.2 (1) There shall be a Stakeholder Advisory Council consisting of not more than twenty persons appointed in accordance with subsections (3) and (4).

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.

Appointment of directors

(3) The Board shall appoint up to two directors elected under subsection 9(2) to be members of the Council.

Appointment of other members

(4) The remaining members shall be appointed by the Board, in consultation with the Minister, for a term of not more than three years, except that as far as possible one third of the first members shall be appointed for a term of three years, one third shall be appointed for a term of two years and one third shall be appointed for a term of one year.

Representative character

(5) The Council must be broadly representative of users and service providers to payment systems.

Chairperson and vice-chairperson

(6) The members of the Council shall elect a chairperson and a vice-chairperson of the Council from among the members of the Council for a term of not more than two years.

Remuneration

(7) The members of the Council shall serve without remuneration but 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.

2001, c. 9, s. 238; 2007, c. 6, s. 432(F).

Previous Version

Budgets

Directors to prepare operating budget

22. (1) The Board shall cause an operating budget to be prepared in respect of each period consisting of a fiscal year and the four months following the fiscal year and shall submit the budget to the members for consideration at the annual meeting of members.

Voting on budget

(2) Where the operating budget referred to in subsection (1) is submitted to the members at an annual meeting, every member is entitled, on a resolution to approve or amend the budget or any part thereof, to one vote for each dollar that the member is required to contribute as dues under the by-laws.

Variation in budget

(3) The members may, when approving the operating budget referred to in subsection (1), authorize the Board to make, subject to any terms that the members set out in the resolution approving the budget, minor variations in the operating budget.

1980-81-82-83, c. 40, s. 76.

Directors to prepare capital budget

23. (1) The Board shall cause a budget setting out proposed capital expenditures of the Association to be prepared and submitted to members for consideration at each annual meeting of members.

Voting on budget

(2) Where the capital budget referred to in subsection (1) is submitted to the members at an annual meeting, every member is entitled, on a resolution to approve or amend the budget or any part thereof, to one vote for each dollar that the member is required to contribute as dues under the by-laws.

Variation in budget

(3) The members may, when approving the capital budget referred to in subsection (1), authorize the Board to make, subject to any terms that the members set out in the resolution approving the budget, minor variations in the capital budget.

1980-81-82-83, c. 40, s. 77.

Quorum

24. At a meeting of members, for the purpose of appointing an auditor, considering a by-law establishing a penalty or considering an operating budget or capital budget, the members present or deemed by subsection 13(2) to be present, in person or by proxy, constitute a quorum if, together, they are required to contribute as dues under the by-laws in respect of the fiscal year in which the meeting takes place, more than fifty per cent of the aggregate amount so required to be contributed in respect of that year.

R.S., 1985, c. C-21, s. 24; 2007, c. 6, s. 433(F).

Previous Version

Annual Meeting

Annual meeting

25. (1) The Board shall call an annual meeting of members not later than three 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 thereon;

(b) electing directors;

(c) considering and approving, with such changes as the members consider necessary, the operating budget submitted by the Board pursuant to subsection 22(1);

(d) considering and approving, with such changes as the members consider necessary, the capital budget submitted by the Board pursuant to subsection 23(1); and

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

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.

1980-81-82-83, c. 40, s. 79.


Auditor

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.

Remuneration

(2) The remuneration of the auditor may be fixed by resolution at the annual meeting of members and on such a resolution every member is entitled to one vote for each dollar that the member is required to contribute as dues under the by-laws.

Idem

(3) Where the members do not fix the remuneration of the auditor at the annual meeting, the Board may fix such remuneration.

1980-81-82-83, c. 40, s. 80.


Fiscal Year

Fiscal year

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

R.S., 1985, c. C-21, s. 27; 2001, c. 9, s. 239.


Electronic Meetings

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 may be held by means of such telephonic, electronic or other communications facilities as permit all persons participating in the meeting to communicate adequately with each other during the meeting.

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)

R.S., 1985, c. C-21, s. 28; R.S., 1985, c. 18 (3rd Supp.), s. 34; 2001, c. 9, s. 239.


Rights and Duties of Members

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.

1980-81-82-83, c. 40, s. 83.

30. (Repealed, 2001, c. 9, s. 240)


Insolvency

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.

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)

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.

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.

Definition of "preference"

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

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.

R.S., 1985, c. C-21, s. 31; 1992, c. 27, s. 90; 1996, c. 6, ss. 163, 167; 2004, c. 25, s. 192.

Previous VersionWinding-up

32. No law relating to the insolvency or winding-up of any body corporate applies to the Association and in no case shall the affairs of the Association be wound up unless Parliament so provides.

1980-81-82-83, c. 40, s. 86.

33. (Repealed, 2001, c. 9, s. 241)


Application of Other Acts

Application of Canada Business Corporations Act

34. (1) Subsections 16(1) and 21(1), sections 23 and 116, subsection 122(1), sections 155, 158, 159, 161, 164, 165, 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.

Exemption from Canada Corporations Act

(2) The Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, does not apply to the Association.

R.S., 1985, c. C-21, s. 34; 1994, c. 24, s. 34(F); 2001, c. 9, s. 242.


Regulations

Regulations by Governor in Council

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

(a) establishing the number of members of committees of the Board and the number of members of the Board that shall be designated by the Board from each class of members established under subsection 9(3);

(b) respecting the election of directors of the Association, including regulations

(i) respecting the eligibility of persons to be elected as directors,

(ii) determining the number of directors, if any, to be elected in respect of each class established under subsection 9(3), and

(iii) prescribing the circumstances when two or more of the classes established under subsection 9(3) are to be deemed to be one class and determining the number of directors to be elected in respect of that deemed class;

(c) determining the number of votes that a member is entitled to cast for the election of directors;

(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.

Deeming

(2) A director elected in respect of classes that are deemed to be one class under regulations made under subparagraph (1)(b)(iii) is deemed to be elected by and to represent the members of each of the affected classes for the purposes of subsection 9(4) and sections 11 to 13.

R.S., 1985, c. C-21, s. 35; 2001, c. 9, s. 243.


Part 2. Designated Payment Systems

Interpretation

Definitions

36. The definitions in this section apply in this Part.

“designated payment system”

« système de paiement désigné »

“designated payment system” means a payment system designated under subsection 37(1).

“participant”

« participant »

“participant” means a party to an arrangement in respect of a payment system.

“payment system”

« système de paiement »

“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.

“rule”

« règles »

“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.

2001, c. 9, s. 244.


Application

Application

36.1 This Part does not apply to the Association.

2001, c. 9, s. 244.


Designation

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.

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.

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.

Notice

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

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.

2001, c. 9, s. 244.


Rules

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.

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.

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.

Disallowance

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

Exemption

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

2001, c. 9, s. 244.


Guidelines and Directives

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.

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.

2001, c. 9, s. 244.

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.

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.

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.

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.

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.

Duty to comply

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

2001, c. 9, s. 244.


Information Requirements

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.

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.

Compliance with request required

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

2001, c. 9, s. 244.


Participants

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.

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.

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.

2001, c. 9, s. 244.


Part 3. General

Information is confidential

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

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 Chairperson of the Canada Deposit Insurance Corporation or any officer of that Corporation authorized in writing by the Chairperson,

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.

2001, c. 9, s. 244.

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.

2001, c. 9, s. 244.

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.

2001, c. 9, s. 244.

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.

2001, c. 9, s. 244; 2002, c. 8, s. 182.

Previous VersionOffence 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.

2001, c. 9, s. 244.

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.

2007, c. 6, s. 434.


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