Canadian Payments Act

An Act respecting the Canadian Payments Association and the regulation of systems and arrangements for the making of payments Short title This Act may be cited as the Canadian Payments Act. Definitions In this Act, Association means the Canadian Payments Association established by section 3; (Association) 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; (banque étrangère autorisée) Board means the Board of Directors of the Association; (conseil) by-law means a by-law of the Association; (règlement administratif) 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 whose membership consists wholly or primarily of local cooperative credit societies, or whose directors are wholly or primarily individuals elected or appointed by local cooperative credit societies; (société coopérative de crédit centrale ou centrale) Chairman[Repealed, 2001, c. 9, s. 219] Chairperson means the Chairperson of the Board referred to in section 15; (président du conseil) cooperative credit association means an association to which the Cooperative Credit Associations Act applies; (association coopérative de crédit) entity includes a corporation, trust, partnership, fund, agency and unincorporated association or organization; (entité) Executive Committee[Repealed, 2014, c. 39, s. 334] federation of cooperative credit societies or federation[Repealed, 2001, c. 9, s. 219] General Manager[Repealed, 2007, c. 6, s. 422] Inspector[Repealed, R.S., 1985, c. 18 (3rd Supp.), s. 33] life insurance company means a life company within the meaning of subsection 2(1) of the Insurance Companies Act, a foreign life company within the meaning of section 571 of that Act, acting in respect of its insurance business in Canada, or 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); (société d’assurance-vie) loan company means a corporation that accepts deposits transferable by order and that 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 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); (société de prêt) local cooperative credit society and local mean a cooperative credit society incorporated by or under an Act of the legislature of a province whose members consist substantially of individuals, and whose principal purpose is to receive deposits from, and make loans to, its members; (société coopérative de crédit locale) member means any of those persons who are members of the Association pursuant to section 4; (membre) Minister means the Minister of Finance; (ministre) money market mutual fund means a fund the assets of which are fully or principally invested in short-term and highly liquid debt securities, and that satisfies conditions prescribed by regulation; (fonds mutuel en instruments du marché monétaire) payment item means an item within a class of items prescribed by by-law; (instrument de paiement) person includes an entity; (personne) President means the President of the Association appointed under section 16; (président) qualified corporation means a body corporate 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, at the demand of their holder, and at prices determined and payable in accordance with specified conditions, 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 having assets that constitute a money market mutual fund; (société admissible) qualified trust means an inter vivos trust 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, 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 whose assets constitute a money market mutual fund; (fiducie admissible) rule means a rule of the Association; (règle) 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; (courtier en valeurs mobilières) Superintendent[Repealed, 2001, c. 9, s. 219] trust company means a corporation that accepts deposits transferable by order and that 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 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); (société de fiducie) trustee, in respect of a qualified trust, means a trustee that is a body corporate; (fiduciaire) user means in Part 1, a person who is a user of payment services but is not a member, and 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. (usager) Societies and federations 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 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. Her Majesty This Act is binding on Her Majesty in right of Canada. Her Majesty in right of a province 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. Association established A corporation is hereby established to be called the Canadian Payments Association. Association not an agent of Her Majesty The Association is not an agent of Her Majesty. Members of Association The Association shall consist of the following members: the Bank of Canada; every bank; every authorized foreign bank; every cooperative credit association, loan company or trust company that is designated as a bridge institution under the Canada Deposit Insurance Corporation Act; and 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 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 central, a trust company, a loan company, a local and any other person that accepts deposits transferable by order; a clearing house, as defined in section 2 of the Payment Clearing and Settlement Act, of a clearing and settlement system designated under subsection 4(1) of that Act; Her Majesty in right of a province or an agent or mandatary of Her Majesty in right of a province, if Her Majesty in right of a province or the agent or mandatary accepts deposits transferable by order; a life insurance company; a securities dealer; a cooperative credit association; the trustee of a qualified trust; a qualified corporation, on behalf of its money market mutual fund; and a payment service provider, as defined in section 2 of the Retail Payment Activities Act, that performs retail payment activities, as defined in that section. Commencement of membership Membership in the Association commences 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 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 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 A member, other than a member referred to in paragraphs (1)(a) to (c), ceases being a member of the Association if 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 the member satisfies its liabilities to the Association. 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 A member to which a resolution of the Board described in subsection (6) is applicable is not eligible to vote at any meeting of members held in the three days following the day on which the resolution is adopted; 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 relieved of the obligation to pay to the Association its liabilities to the Association on the day it ceases being a member. Right to vote Each member shall have one vote on all matters to be decided by members. Proxies 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. Quorum At a meeting of members, the members present, in person or by proxy, constitute a quorum if, together, they represent the majority of all members. Objects The objects of the Association are to establish and operate national systems for the clearing and settlement of payments and other arrangements for the making or exchange of payments; 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 facilitate the development of new payment methods and technologies. Duty of Association 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. Powers The Association may, in carrying out its objects, arrange the exchange of payment items at such places in Canada as the Association considers appropriate; require the payment of dues by members and establish the amount thereof; 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 provide or procure the provision of pension, insurance or other benefits for officers and employees of the Association. Capacity and powers For the purpose of carrying out its objects, the Association has the capacity, rights, powers and privileges of a natural person. Head office The head office of the Association shall be at such place in Canada as may be designated in the by-laws of the Association. Composition There shall be a Board of Directors of the Association consisting of the following 13 directors: the President; three directors who are directors, officers or employees of members that, in the normal course of business, maintain a settlement account at the Bank of Canada; two directors who are directors, officers or employees of members other than those described in paragraph (b); and seven directors who are independent of the Association and of its members. Election of directors The directors referred to in paragraphs (1)(b) to (d) are to be elected by the members. At a meeting of the Board, the directors present constitute a quorum if at least seven directors are present and a majority of the directors present are directors referred to in paragraph (1)(d). Ineligibility No individual is eligible to be a director if they are a director, officer or employee of the Bank of Canada; employed in any capacity in the federal public administration or the public service of a province or hold any office or position for which any salary or other remuneration is payable out of public moneys; or a member of the Senate or House of Commons or a member of a provincial legislature. Restriction When a director, officer or employee of a member is a director of the Association, no other director, officer or employee of that member, or of an affiliate of that member, is eligible to be a director of the Association. Affiliates For the purposes of this section, one corporation is affiliated with another corporation if one of them is the subsidiary of the other or both are subsidiaries of the same corporation or each of them is controlled by the same person; and if two corporations are affiliated with the same corporation at the same time, they are deemed to be affiliated with each other. Definition of control In paragraph (3)(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 corporation or otherwise. Term of office — elected directors The elected directors hold office for a term of three years and are eligible to be elected for two further terms. Removal of elected directors If a resolution passed by a two-thirds majority of the members who are present at a special meeting of members called to consider the resolution provides for the recall of an elected director, then, despite subsection (1), 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 A director referred to in paragraph 8(1)(d) shall be paid by the Association the remuneration that is fixed by by-law. Vacancy A vacancy on the Board does not impair the right of the remaining directors to act. Vacancies If a vacancy among the elected directors occurs, the directors shall cause a meeting to be held of the members for the purpose of electing a director to fill the vacancy for the remainder of the term of the director whose departure resulted in the vacancy. Election by the Board If the meeting is called and there is no quorum or the meeting fails to elect a director to fill the vacancy, the Board shall elect a director for the remainder of the term of the director whose departure from the Board resulted in the vacancy. [Repealed, 2014, c. 39, s. 338] Canadian citizens At least three quarters of the directors of the Association must be Canadian citizens ordinarily resident in Canada. Chairperson and Deputy Chairperson The elected directors shall elect a Chairperson of the Board and a Deputy Chairperson of the Board from among the directors referred to in paragraph 8(1)(d) for a renewable term of up to three years. However, the Chairperson and Deputy Chairperson shall each serve no more than six years in office in total. Duties of Chairperson The Chairperson shall preside at meetings of the Board and perform the duties that are assigned by the by-laws. Absence of Chairperson If the Chairperson is unable to act by reason of absence or incapacity, the Deputy Chairperson shall perform the duties of the Chairperson. Additional vote The Chairperson or, in the absence or incapacity of the Chairperson, the Deputy Chairperson has, in the event of a tie vote on any matter before the Board at a meeting of the Board, a second vote. President The elected directors shall appoint the President of the Association. Duties 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 or the Board. Exercise of powers by officers and employees 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. Duty of care of directors and officers Every director and officer of the Association, in exercising their powers and performing their duties, shall act honestly and in good faith with a view to the best interests of the Association; and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Duties and powers of Board 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 Subject to the by-laws, the Board may borrow money on the credit of the Association; issue, reissue, sell or pledge debt obligations of the Association; and 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. debt obligation means a bond, debenture, note or other evidence of indebtedness or guarantee of the Association, whether secured or unsecured; (titre de créance) 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. (sûreté) By-laws The Board may make any by-laws that it considers advisable for the attainment of the objects of the Association, including by-laws providing for eligibility criteria for membership in the Stakeholder Advisory Council or the Member Advisory Council and their number of members; establishing, subject to this Part, requirements for membership in the Association; [Repealed, 2014, c. 39, s. 342] respecting the exchange and clearing of payment items and related matters; respecting settlements and related matters; respecting the payment of dues by the members and the payment of fees for services performed by or on behalf of the Association, and establishing the method of determining the amount of those dues and those fees; establishing penalties for any failure by members to comply with the by-laws, rules and orders made under the by-laws, except by-laws made under paragraph (k), including penalties that provide for the payment of interest or the making of restitution and procedures in respect of the imposition of those penalties; respecting the authenticity and integrity of payment items and messages; respecting the identification and authentication of members and other persons; prescribing classes of members of the Stakeholder Advisory Council for the purposes of subsection 21.2(7); 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 respecting the internal administration of the business of the Association, including the procedures for all business that is conducted at meetings of the Board, the Board’s committees, the Stakeholder Advisory Council or the Member Advisory Council, the remuneration of directors referred to in paragraph 8(1)(d) and of individuals referred to in subsection 21.2(7), the payment of reasonable travel and living expenses incurred by members of the Stakeholder Advisory Council, and the procedures for the nomination, selection and appointment of individuals to be members of the Stakeholder Advisory Council or the Member Advisory Council. Approval A by-law, except a by-law made under paragraph (1)(k), shall not come into force unless it is approved by the Minister and, once approved, copies of it must be sent by the President to every member. Notice The President shall notify the Minister of the making of a by-law under paragraph (1)(k) and shall send copies of the by-law to every member. Rules Subject to the by-laws, the Board may make any rules that it considers advisable for the attainment of the objects of the Association, including rules respecting payment items acceptable for exchange, clearing or settlement; establishing standards and procedures in respect of the exchange and clearing of payment items; respecting the destruction of payment items; respecting the authenticity and integrity of payment items and messages; and respecting the identification and authentication of members and other persons. [Repealed, 2014, c. 39, s. 344] Rules to be available 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 A copy of every rule shall be sent to the Minister within ten days after it is made. Statements of principle and standards Subject to the by-laws and rules, the Board may make any statements of principle and standards that it considers advisable for the attainment of the objects of the Association. Effective date of rule 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 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 The Minister may disallow the whole or a part of a rule. Directives by Minister If the Minister is of the opinion that it is in the public interest to do so, the Minister may issue a written directive to the Association, including a directive to make, amend or repeal a by-law, rule or standard. Consultation 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. If the directive relates to the operation of a clearing and settlement system designated under subsection 4(1) of the Payment Clearing and Settlement Act, the Minister shall also consult the Governor of the Bank of Canada. Notification of implementation 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 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 The Board shall ensure that a directive is implemented in a prompt and efficient manner. Duty to comply Every director, officer and employee of the Association shall comply with any directive given to the Association. Request by Minister 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. Notice of developments The President shall, as soon as feasible, notify the Minister of any financial or other developments that have or are likely to have a material adverse effect on the business of the Association. Nominating committee The Board shall establish a nominating committee to identify and propose qualified candidates for the election of directors. The nominating committee shall consist of elected directors, a majority of whom shall be directors referred to in paragraph 8(1)(d). Representative character When the nominating committee is identifying qualified candidates for the election of directors referred to in paragraph 8(1)(c), it shall endeavour to identify candidates that are broadly representative of the diversity of the membership of the Association. Other committees The Board may, subject to the regulations, establish other committees consisting of such individuals as the Board considers appropriate. Powers and duties Subject to the by-laws, the Board may delegate to its committees such powers and duties as the Board considers appropriate. Stakeholder Advisory Council There shall be a Stakeholder Advisory Council consisting of individuals who are independent of the Association and of its members and are appointed by the Board in consultation with the Minister. Object 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. [Repealed, 2019, c. 29, s. 96] The Council shall be broadly representative of users and payment service providers that are not members of the Association. The Association may pay the remuneration that is fixed by by-law to the following individuals: any member of the Council that falls within a class prescribed by by-laws; and any individual who represents the interests of such a member or who is represented by such a member. Travel and living expenses The members of the Council 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. Report of Council The Chairperson of the Stakeholder Advisory Council shall, as soon as feasible after the end of each fiscal year, submit a report on its activities in that fiscal year to the Board. Member Advisory Council There shall be a Member Advisory Council consisting of individuals appointed by the Board. The object of the Council is to provide counsel and advice to the Board on the Association’s operation of clearing and settlement systems, the interaction of those systems with other systems involved in the exchange, clearing or settlement of payments and the development of new technologies. The Council shall be broadly representative of the diversity of the membership of the Association. Budgets In each year, the Board shall cause an operating budget and a budget setting out proposed capital expenditures of the Association to be prepared. The Board shall consult the members before establishing the operating budget and capital expenditures budget. Corporate plan In each year, the Board shall, within the time prescribed by the regulations, submit to the Minister for approval a five-year corporate plan for the Association. Contents of corporate plan The corporate plan shall include the Association’s objectives; the strategies that the Association intends to use to achieve its objectives, including operational, financial and human resource strategies; the Association’s expected performance over the five-year period; the Association’s operating and capital expenditures budgets; any material changes that have occurred in respect of information provided in the previous corporate plan; and any other information that the Minister may require. Annual report The Board shall, within the time prescribed by the regulations, prepare a report on the Association’s operations for each fiscal year and the Association shall publish it on its Internet site. Contents The report shall include the financial statements of the Association and the report of the auditor; an evaluation of the Association’s performance with respect to the objectives established in the corporate plan; the annual report of the Stakeholder Advisory Council; and a statement of the Association’s priorities for the following fiscal year. Annual meeting The Board shall call an annual meeting of members not later than six months after the end of each fiscal year of the Association for the purpose of receiving the financial statements of the Association for the preceding fiscal year and the report of the auditor respecting those statements; electing directors; and considering any other matter respecting the operations of the Association. Appointment of auditor The members of the Association shall, at each annual meeting, appoint an auditor to hold office until the close of the next annual meeting. The remuneration of the auditor may be fixed by resolution at the annual meeting of members. However, if the remuneration of the auditor is not fixed at the annual meeting, the Board may do so. [Repealed, 2014, c. 39, s. 353] Fiscal year The fiscal year of the Association is the calendar year. Electronic meetings 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 or Member Advisory Council may be held by means of any telephonic, electronic or other communications facilities that permit all persons participating in the meeting to communicate adequately with each other during the meeting. Deemed present 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. [Repealed, 2001, c. 9, s. 239] Members Members may present payment items and shall accept and arrange for settlement of payment items in accordance with the by-laws and the rules. [Repealed, 2001, c. 9, s. 240] Definition of priority payment instrument 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 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: 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 unpaid priority payment instruments drawn on the insolvent member and issued prior to the making of the bankruptcy order or winding-up order. [Repealed, 1996, c. 6, s. 163] Time limit 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 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 where the cheque or order had been certified by the insolvent member, or 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 In subsection (5), preference means a preference within the meaning of the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act. Definition of member For purposes of this section, member includes a local that is a member of a central that is a member of the Association. Insolvency No law relating to the insolvency of any body corporate, except Part I.1 of the Payment Clearing and Settlement Act, applies to the Association. Winding-up No law relating to the winding-up of any body corporate applies to the Association and in no case shall its affairs be wound up unless Parliament so provides. [Repealed, 2001, c. 9, s. 241] Application of Canada Business Corporations Act Subsections 16(1) and 21(1), sections 23, 116, 155, 158, 159, 161, 164 to 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 Not-for-profit Corporations Act The Canada Not-for-profit Corporations Act does not apply to the Association. Regulations by Governor in Council The Governor in Council may make regulations providing for the mandate of committees established under section 20 or 21, eligibility criteria for membership in those committees and their number of members; respecting the election of directors of the Association, including the eligibility of individuals to be elected as directors, and defining independent for the purposes of paragraph 8(1)(d); prescribing the form and content of the Association’s corporate plans and annual reports, and the time and manner in which they must be prepared or submitted; establishing requirements for membership in the Association to be met by persons or classes of persons; respecting the conditions that a money market mutual fund must satisfy; and generally, for carrying out the purposes and provisions of this Part. [Repealed, 2014, c. 39, s. 356] The definitions in this section apply in this Part. designated payment system means a payment system designated under subsection 37(1). (système de paiement désigné) participant means a party to an arrangement in respect of a payment system. (participant) 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. (système de paiement) 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. (règles) Application This Part does not apply to the Association. Designation by Minister 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 is national or substantially national in its scope; or plays a major role in supporting transactions in Canadian financial markets or the Canadian economy. Factors The following factors shall be considered in a determination of whether it is in the public interest to designate a payment system: the level of financial safety provided by the payment system to the participants and users; the efficiency and competitiveness of payment systems in Canada; and the best interests of the financial system in Canada. 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. 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 A designation is not a statutory instrument for the purposes of the Statutory Instruments Act. However, it must be published in the Canada Gazette. 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 in the case of a rule made before the designation of the payment system, within 30 days after the designation; and in the case of a rule made after the designation, within 10 days after it is made. 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. 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 Exemption The Minister may exempt a designated payment system from the application of subsection (2). Minister may issue guidelines The Minister may issue guidelines in respect of any matter relating to the administration or enforcement of this Part. Guidelines public Guidelines shall be made available to the public and the Minister shall give notice of them in any manner that the Minister considers appropriate. Minister may issue directive The Minister may issue a written directive to the manager or a participant of a designated payment system in respect of the conditions an entity must meet to become a participant in the designated payment system; the operation of the designated payment system; the interaction of the designated payment system with other payment systems; or the relationship of the designated payment system with users. 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 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, cease or refrain from engaging in an act or course of conduct; perform such acts as in the opinion of the Minister are necessary in the public interest; or make, amend or repeal a rule. 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. A directive is binding on the person to whom it is given. Information requests 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 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 Every person to whom a request is directed shall comply with the request. Responsibility if foreign system manager If a designated payment system does not have a Canadian manager, the Canadian participants shall comply with the obligations imposed under this Part on a manager of a designated payment system, and 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 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 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. Information is confidential Information and documents obtained under this Act are confidential and shall be treated accordingly. Disclosure permitted Nothing in subsection (1) prevents the Minister from disclosing any information or documents to 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, the Bank of Canada or any officer of the Bank authorized in writing by the Governor of the Bank, and the Chief Executive Officer of the Canada Deposit Insurance Corporation or any other officer of that Corporation authorized in writing by the Chief Executive Officer, 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. No liability if in good faith 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. Compliance orders 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. No stay on judicial review 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. Enforcement of decision An order of a compliance panel established under paragraph 8(1)(a) of Canadian Payments Association By-law No. 6 — Compliance may be made an order of the Federal Court or of a superior court of a province and may be enforced in the same manner as an order of that court as if it had been an order of that court on the date of the decision. Procedure An order of a compliance panel may be made an order of a court in accordance with the usual practice and procedure of the court in such matters, if any, or by the filing of a certified copy of the decision with the registrar of the court. Effect of rescission or variation If an order of a compliance panel that has been made an order of a court is rescinded or varied by a subsequent order of the compliance panel, the order of the court is vacated and the subsequent order may be made an order of the court in accordance with subsection (2). Saving The President may enforce any order of a compliance panel whether or not the order has been made an order of a court. Offence and punishment Every person who, without reasonable cause, contravenes any provision of this Act is guilty of an offence and 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 in the case of any other entity, liable on summary conviction to a fine not exceeding $500,000. Delegation 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. [Repealed, 2024, c. 15, s. 229] Review On the fourth anniversary of the day on which this section comes into force, the Minister shall cause to be conducted a review of this Act and its operation and cause a report on the review to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the review is completed. Chairperson continued The person who holds the office of Chairperson of the Board of the Canadian Payments Association immediately before section 8 of the Canadian Payments Act, as amended by section 218 of this Act, comes into force continues in office as the Chairperson of the Board for the remainder of the term for which that person was appointed Chairperson. Directors continued Each person who holds office as a director of the Canadian Payments Association immediately before the day subsection 9(2) of the Canadian Payments Act, as amended by subsection 219(2) of this Act, comes into force ceases to hold office at the close of the next annual meeting of the members of the Association that is held after the coming into force of that subsection. The new directors of the Board shall be elected at that meeting. Coming into force of rules Every rule of the Canadian Payments Association made under the Canadian Payments Association Act before the coming into force of subsection 2(3) of that Act, as enacted by section 219 of this Act, is deemed to have come into force on the day the rule was made. Meeting of members to be held Within 30 days after the day on which section 337 comes into force, the Board of Directors of the Canadian Payments Association shall cause a meeting of the members to be held at which a new Board of Directors shall be established. Former directors cease to hold office The persons who hold office as directors of the Board of the Canadian Payments Association on the day on which section 337 comes into force cease to hold office at the close of the meeting of the members referred to in subsection (1).

New Board of Directors Despite subsections 8(2) and 9.1(1) of the Canadian Payments Act, the directors of the new Board of Directors, other than the President of the Association, shall be appointed under subsection (4) or elected under subsection (5) for the terms of office provided for under those subsections. Appointment of directors At the commencement of the meeting of the members referred to in subsection (1), the Board of Directors shall appoint two directors from among the directors in office who represent the classes described in subsection 9(3) of the Canadian Payments Act, as it read immediately before the coming into force of section 337, to act as directors described in paragraph 8(1)(b) or (c) of the Canadian Payments Act for a term of one year; one director from among the directors in office who represent the classes described in subsection 9(3) of the Canadian Payments Act, as it read immediately before the coming into force of section 337, to act as a director described in paragraph 8(1)(b) or (c) of the Canadian Payments Act for a term of two years; two directors from among the directors in office who were appointed by the Minister under subsection 9(1.1) of the Canadian Payments Act, as it read immediately before the coming into force of section 337, to act as directors described in paragraph 8(1)(d) of the Canadian Payments Act for a term of one year; one director from among the directors in office who were appointed by the Minister under subsection 9(1.1) of the Canadian Payments Act, as it read immediately before the coming into force of section 337, to act as a director described in paragraph 8(1)(d) of the Canadian Payments Act for a term of two years; and one director from among those described in paragraph 8(1)(d) of the Canadian Payments Act for a term of three years. Immediately after seven directors have been appointed under subsection (4), the members shall elect one director from among those described in paragraph 8(1)(b) or (c) of the Canadian Payments Act, for a term of two years; one director from among those described in paragraph 8(1)(b) or (c) of the Canadian Payments Act, for a term of three years; one director from among those described in paragraph 8(1)(d) of the Canadian Payments Act, for a term of two years; and two directors from among those described in paragraph 8(1)(d) of the Canadian Payments Act, for a term of three years. List of qualified candidates For the purposes of the election of directors under paragraph (5)(a) or (b), the Board shall endeavour to identify candidates that are broadly representative of the diversity of the membership of the Association and, at least 15 days before the meeting of the members referred to in subsection (1), the Board shall provide to members a list of qualified candidates. Chairperson Despite subsection 15(1) of the Canadian Payments Act, as enacted by section 339 of this Act, the directors appointed under subsection (4) or elected under subsection (5) shall elect a Chairperson of the Board from among those who were appointed under paragraph (4)(d) or (e) or elected under (5)(c) or (d). Deeming For the purposes of the Canadian Payments Act, the directors appointed under subsection (4) or elected under subsection (5) are deemed to be directors who have been elected under subsection 8(2) of that Act. For greater certainty, they are eligible to be elected for only one further term.