GreatNorthCollective/greatnorth-canada-federal-laws-text huggingface dataset:
Payment Clearing and Settlement Act — P-4.4 4
Designation by Governor 4 (1) If the Governor of the Bank is of the opinion that a clearing and settlement system could be operated in a manner that poses a systemic risk or payments system risk and the Minister is of the opinion that it is in the public interest to do so, the Governor may designate the clearing and settlement system as a clearing and settlement system that is subject to this Part. Revocation (2) If the Governor of the Bank is of the opinion that the designated clearing and settlement system could no longer be operated in a manner that poses a systemic risk or payments system risk and the Minister is of the opinion that it is in the public interest to do so, the Governor may revoke the designation. 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; 2014, c. 39, s. 362
Payment Clearing and Settlement Act — P-4.4 5
Information to be provided to Bank 5 A clearing house shall, in respect of the designated clearing and settlement system, provide the Bank with any information that the Bank may request in writing, at any time and in any form and manner that is specified by the Bank. 1996, c. 6, s. 162 (Sch., s. 5); 2014, c. 39, s. 363
Payment Clearing and Settlement Act — P-4.4 6
Directive to clearing house 6 (1) The Governor of the Bank may issue a directive in writing to a clearing house of a designated clearing and settlement system that requires the clearing house, within any period that may be specified in the directive, to take  — and to have the participants take — any corrective measures that the Governor considers necessary, if the Governor is of the opinion that systemic risk or payments system risk could be inadequately controlled because of (a) the design or operation of the clearing and settlement system; (b) the ownership or control of the clearing and settlement system; (c) aspects of organizational structure or corporate governance of the clearing house that are related to risk management; (d) the management or operation of the clearing house; or (e) actual or anticipated acts or omissions of the clearing house or of a participant. Directive to participants (2) The Governor of the Bank may issue a directive in writing to a participant that requires the participant, within any period that may be specified in the directive, to take any corrective measures that the Governor considers necessary if the Governor has formed an opinion referred to in subsection (1) that systemic risk or payments system risk could be inadequately controlled and (a) the clearing house fails to comply with a directive that has been issued to it under subsection (1); (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 risk could be inadequately controlled because of an actual or anticipated act or omission by a participant, and (ii) the actual or anticipated act or omission is not subject to the by-laws, agreements, rules, procedures, guides or other documentation governing the designated clearing and settlement system. Factors to be taken into account (2.1) In determining the corrective measures that are necessary, the Governor of the Bank shall take into account the nature, severity and imminence of the risk and any other risk-related factors that the Governor considers appropriate. Clarification (3) For greater certainty, a directive issued under this section must not be made in respect of (a) the capital adequacy of a participant; (b) the management of a participant’s investments; (c) a participant’s corporate governance; (d) a participant’s relations with customers who are not themselves participants in the designated clearing and settlement system; (e) a participant’s ownership structure; or (f) any other matter that is not directly related to a participant’s participation in the designated clearing and settlement system. 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 under a statute. 1996, c. 6, s. 162 (Sch., s. 6); 2014, c. 39, s. 364; 2017, c. 33, s. 189
Payment Clearing and Settlement Act — P-4.4 6.1
Representations 6.1 (1) Before issuing a directive to a clearing house or a participant, the Governor of the Bank shall provide the clearing house or participant, as the case may be, with an opportunity to make representations. Exception (2) If, in the opinion of the Governor of the Bank, providing the clearing house or participant with an opportunity to make representations would undermine the effectiveness of the directive, the Governor of the Bank may, without providing that opportunity, issue a directive under section 6 to the clearing house or participant that has effect for a period of not more than 15 days and may extend the directive once, in writing, for a further period of not more than 15 days. 2017, c. 33, s. 190
Payment Clearing and Settlement Act — P-4.4 7
General powers 7 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.
Payment Clearing and Settlement Act — P-4.4 9
Significant change 9 (1) For the purposes of this section, a change is significant if it could reasonably be expected to have a material impact on the efficiency, safety or soundness of the designated clearing and settlement system. Notice required (2) A clearing house shall provide the Bank with reasonable notice before making (a) any significant change in relation to the designated clearing and settlement system; (b) any change in relation to the design or operation of the system or to the by-laws, agreements, rules, procedures, guides or other documentation governing the system; or (c) any change to the constating documents and by-laws of the clearing house. Approval required (3) If the Governor of the Bank is of the opinion that a significant change that the clearing house intends to make in relation to the designated clearing and settlement system would have an effect on the control of risk for the system, the clearing house, the participants or the financial system in Canada, that change shall not take effect unless it is approved in writing by the Governor, subject to any conditions that the Governor considers appropriate. Notice required of other changes (4) A clearing house shall, without delay after it makes any change in relation to the designated clearing and settlement system, other than a change referred to in subsection (2), provide the Bank with written notice of the change, including 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. 1996, c. 6, s. 162 (Sch., s. 9); 2014, c. 39, s. 366; 2017, c. 33, s. 191
Payment Clearing and Settlement Act — P-4.4 10
Powers of Bank 10 (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. 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 .
Payment Clearing and Settlement Act — P-4.4 11
Application 11 This Part applies in respect of a clearing and settlement system that is designated under subsection 4(1) if its clearing house is located in Canada. 1996, c. 6, s. 162 (Sch., s. 11); 2014, c. 39, s. 367 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.01
Resolution Authority 11.01 The Bank is the resolution authority for clearing and settlement systems and clearing houses. 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.02
Objects 11.02 The objects of the Bank as the resolution authority are to (a) pursue the stability of the financial system in Canada; (b) allow for the continuity of critical clearing and settlement system functions; and (c) pursue the objects set out in paragraphs (a) and (b) in a manner that minimizes the exposure of public moneys to loss. 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.03
Powers 11.03 While a clearing and settlement system or a clearing house is in resolution, the Bank may, despite paragraphs 23(a), (c) and (d) of the Bank of Canada Act , do all things necessary or incidental to carrying out its objects as the resolution authority, including (a) acquire assets from a clearing house; (b) make or guarantee loans or advances, with or without security, to a clearing house or a participant on the terms and conditions specified by the Bank; (c) assume liabilities of a clearing house; (d) act as receiver of a clearing house, when appointed by order under subsection 11.09(1); (e) acquire, by way of security or otherwise, shares of a clearing house and hold and alienate those shares; (f) acquire, hold and alienate real and personal property or immovable or movable property; and (g) incorporate a corporation under the Canada Business Corporations Act for the purpose of designating the corporation as a bridge clearing house. 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.04
Membership 11.04 (1) There is established a committee consisting, subject to subsection (6), of the following persons: (a) the Governor of the Bank; (b) the Superintendent of Financial Institutions; (c) the Chief Executive Officer of the Canada Deposit Insurance Corporation; and (d) the Deputy Minister of Finance. Chairperson (2) The Governor of the Bank is the chairperson of the committee. Object (3) The object of the committee is to facilitate consultations and the exchange of information among its members on all matters relating to the resolution of clearing and settlement systems and clearing houses. Consultation (4) In carrying out its object, the committee may consult with any government authority or regulatory body that has entered into an agreement or arrangement with the Bank under section 13.3. Information confidential (5) Information received by any member of the committee in carrying out the committee’s object is confidential and shall be treated accordingly. The Governor of the Bank may disclose that information to the Bank and the Bank may in turn disclose it to a person or entity in accordance with subsections 18(2) to (4). Conflicts of interest (6) The members of the committee shall comply with rules concerning conflicts of interest provided for in the regulations. 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.05
Resolution plans 11.05 (1) The Bank shall develop and maintain, in accordance with the regulations, a resolution plan for each clearing and settlement system. Consultation (2) In developing the resolution plan, the Bank shall consult with the committee established under subsection 11.04(1) and any government authority or regulatory body that has entered into an agreement or arrangement with the Bank under section 13.3 related to the clearing and settlement system. 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.06
Declaration of non-viability 11.06 (1) The Governor of the Bank may make a declaration in writing of non-viability for a clearing and settlement system or a clearing house and enter it into resolution if the Governor is of the opinion that (a) the clearing and settlement system or clearing house has ceased, or is about to cease, to be viable; and (b) the clearing and settlement system or clearing house cannot restore or preserve its viability on its own initiative. Matters to consider (2) The Governor of the Bank, in determining whether to make a declaration under subsection (1), shall take into account all matters that the Governor considers relevant, including whether, in his or her opinion, (a) the clearing house has exhausted the measures to address financial loss, shortfalls in liquidity or capital adequacy that are specified in its by-laws or rules, or in an arrangement that relates to the clearing and settlement system; (b) the measures described in paragraph (a) will not be sufficient to sustain the operation of the clearing and settlement system or the clearing house; (c) the clearing and settlement system or the clearing house has lost the confidence of the participants; and (d) systemic risk or payments system risk is, or is likely to be, inadequately controlled. Notice (3) After a declaration of non-viability is made with respect to a clearing and settlement system or a clearing house, the Governor of the Bank shall, without delay, notify (a) the Minister; (b) the committee established under subsection 11.04(1); (c) the clearing house; and (d) any government authority or regulatory body that has entered into an agreement or arrangement with the Bank under section 13.3 related to the clearing and settlement system or related to the system whose clearing house is the subject of the declaration. Bankruptcy, default or insolvency (4) A declaration of non-viability does not constitute an act of bankruptcy or default by the clearing house, and the clearing house shall not be considered insolvent by reason only of a declaration of non-viability. Publication (5) The Governor of the Bank shall cause a copy of the declaration to be published in the Canada Gazette . 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.07
Stay 11.07 (1) Despite subsection 8(3), a declaration of non-viability shall have the effect of a stay and, during the period of the stay, (a) no person or entity shall terminate or amend any contract with the clearing house or the central counter-party or claim an accelerated payment, or forfeiture of the term, under such a contract by reason only of the making of a declaration of non-viability; (b) no action or other civil proceeding before a judicial or quasi-judicial body and no arbitration may be commenced or continued against the clearing house or in respect of its assets other than a proceeding under the Winding-up and Restructuring Act commenced by the Bank or the Attorney General of Canada; (c) no attachment, garnishment, execution, seizure or other method of enforcement of a judgment or order against the clearing house or its assets may take place or continue; (d) no creditor of the clearing house has any remedy against the clearing house or its assets; (e) except in the normal course of clearing and settlement processes, including the consolidation of accounts in respect of those processes, no creditor has any right of set-off or compensation against the clearing house; and (f) no early termination right or right to amend a contract in respect of a service that is provided to the clearing house and that is critical to the operation of the clearing and settlement system or of the clearing house may be exercised by a service provider. Period of stay (2) The period of the stay begins at the time a declaration of non-viability is made and ends on the day specified in the notice referred to in section 11.24. No force or effect (3) During the period of the stay, any notice given that a person or entity proposes to take an action referred to in paragraph (1)(a) is of no force or effect. 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.08
Eligible financial contracts 11.08 (1) Nothing in subsection 11.07(1) prevents the following actions from being taken in accordance with the provisions of an eligible financial contract , as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act : (a) the termination or amendment of the contract; (b) the accelerated payment or forfeiture of the term under the contract; (c) the exercise of remedies for a failure to satisfy an obligation under or in connection with the contract, including the payment of an amount payable — or the delivery of property deliverable — under or in connection with the contract; (d) the netting or setting off or compensation of an amount payable under or in connection with the contract; (e) any dealing with financial collateral (i) to satisfy an amount payable — or the delivery of property deliverable — under or in connection with the contract, (ii) for the purpose of calculating an amount payable under or in connection with the contract by way of netting, setting off or compensation of the financial collateral or application of the proceeds or value of the financial collateral, or (iii) as a remedy for a failure described in paragraph (c); or (f) any dealing with financial collateral, other than a dealing set out in paragraph (e). Interpretation (2) For the purposes of paragraphs (1)(e) and (f), dealings with financial collateral include (a) the sale or foreclosure or, in Quebec, the surrender of financial collateral; and (b) the netting, setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. Stay — eligible financial contracts (3) During the period that begins at the time a declaration of non-viability is made and ends on the expiration of the second day following the day on which the declaration is made, the actions referred to in paragraphs (1)(a), (b) and (f) are not to be taken by reason only of the making of a declaration of non-viability. Agreements overridden (4) Any provision in an eligible financial contract is of no force or effect if the provision has the effect of providing for or permitting anything that, in substance, is contrary to subsection (3). Definition of financial collateral (5) In this section, financial collateral has the same meaning as in subsection 13(2). 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.09
he Bank, as receiver, may exercise its powers, rights, privileges and immunities without leave of a court, but may seek the assistance of a superior court in exercising those powers, rights, privileges and immunities, including by applying to a superior court for an order requesting assistance from a Canadian or foreign court, tribunal, government authority or regulatory body; (b) an asset of the clearing house that is acquired from the Bank, as receiver, shall, except to the extent that it is an asset referred to in paragraph (2)(c), be acquired free of any adverse claim of the clearing house or any other person or entity; and (c) the Bank, as receiver, may cause or refrain from causing any obligation of the clearing house to be performed and may cause the clearing house to incur an obligation or do so on its behalf. Effect of appointment as receiver (8) The Bank shall not, by reason of its appointment as receiver or any action taken by it as receiver, be held to have assumed or incurred any obligation or liability of the clearing house for its own account. Non-liability — employees (9) Despite anything in federal or provincial law, the Bank, as receiver, is not liable in respect of an obligation or liability, including one as a successor employer, (a) that is in respect of the employees or former employees of the clearing house or a predecessor of the clearing house or in respect of a pension plan for the benefit of those employees or former employees; and (b) that existed before the Bank’s appointment as receiver or that is calculated by reference to a period before that appointment. Liability of other successor employers (10) Subsection (9) does not affect the liability of a successor employer other than the Bank, as receiver. Order and action final (11) An order made under subsection (1) and any action taken or decision made in furtherance of the order are for all purposes final. Notice (12) After an order is made under subsection (1), the Governor of the Bank shall, without delay, notify (a) the Minister; (b) the committee established under subsection 11.04(1); (c) the clearing house; and (d) any government authority or regulatory body that has entered into an agreement or arrangement with the Bank under section 13.3 related to the clearing and settlement system whose clearing house is the subject of the order. Publication (13) The Governor of the Bank shall cause a copy of the order to be published in the Canada Gazette . 2018, c. 12, s. 234
Payment Clearing and Settlement Act — P-4.4 11.1
Transfer of powers to Bank 11.1 (1) If an order is made under subsection 11.09(1), the powers, duties, functions, rights and privileges of the directors of the clearing house and those of its officers who are responsible for its management are suspended except to the extent that is specified in writing by the Bank. The Bank may exercise those powers, rights and privileges and perform those duties and functions. Suspension of members’ rights (2) If an order is made under paragraph 11.09(1)(a), the rights of the members of the Canadian Payments Association to vote or give approvals are suspended and the Bank may exercise those rights. Suspension of shareholders’ rights (3) If an order is made under subparagraph 11.09(1)(b)(ii) in respect of a clearing house, the powers, rights and privileges of its shareholders to vote or give approvals are suspended and the Bank may exercise those powers, rights and privileges. Assistance (4) The Bank may appoint one or more persons or entities to assist it in managing the clearing house or in carrying out the Bank’s functions as shareholder or as receiver and may delegate to those persons any of the powers, duties or functions of the directors and officers of the clearing house. Power to appoint and remove (5) If an order is made under subsection 11.09(1), the Bank may appoint or remove any director of the clearing house. Bank’s directions (6) If an order is made under subsection 11.09(1), the Bank may give directions to the board of directors of the clearing house, including directions to make, amend or repeal any by-law, agreement, rule, procedure, guide or other documentation governing the designated clearing and settlement system or the clearing house. Implementation (7) The board of directors of the clearing house shall ensure that a direction given under subsection (6) is implemented in a prompt and efficient manner and shall, after implementing a direction, notify the Bank without delay that it has been implemented. By-laws — board of directors (8) The board of directors of the clearing house may, with the prior approval of the Bank, make, amend or repeal any by-law of the clearing house. 2018, c. 12, s. 234