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Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System

SOR/2003-346

CANADIAN PAYMENTS ACT

Registration 2003-10-23

Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System

P.C. 2003-1624 2003-10-23

The Board of Directors of the Canadian Payments Association, pursuant to the definition payment itemFootnote a in subsection 2(1) and to subsection 18(1)Footnote b of the Canadian Payments ActFootnote c, hereby makes the annexed Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System.

Ottawa, June 25, 2003

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 18(2) of the Canadian Payments ActFootnote c, hereby approves the annexed Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System, made by the Board of Directors of the Canadian Payments Association.

Interpretation

Marginal note:Definitions

 The following definitions apply in this By-law.

ACSS cycle

ACSS cycle means the period beginning immediately after the final adjustment time on a given business day and ending with the final adjustment time on the next business day. (cycle du SACR)

Automated Clearing Settlement System

Automated Clearing Settlement System or ACSS means the system into which direct clearers, group clearers, clearing agents and the Bank of Canada make entries for the purpose of clearing. (système automatisé de compensation et de règlement ou SACR)

business day

business day means any day other than an ACSS holiday specified in the rules. (jour ouvrable)

clearing

clearing means the reconciliation of payment items that were exchanged and the calculation of the clearing balances. (compensation)

clearing agent

clearing agent means the direct clearer or group clearer appointed under subsection 33(1) that, on behalf of an indirect clearer, exchanges payment items and either effects clearing and settlement or makes entries into the ACSS. (agent de compensation)

clearing balance

clearing balance means the total of the net amounts owing to or by a member as a result of clearing. (solde de compensation)

direct clearer

direct clearer means a member, other than the Bank of Canada, appointed under section 26 that, on its own behalf, exchanges payment items and makes entries into the ACSS. (adhérent)

exchange

exchange means the delivery and receipt of payment items. (échange)

federal credit union

federal credit union has the same meaning as in section 2 of the Bank Act. (coopérative de crédit fédérale)

final adjustment time

final adjustment time means the time, set out in the rules, prior to which the correction of errors affecting the calculation of the clearing balance of a direct clearer or group clearer for the current ACSS cycle must be made. (heure finale de rajustement)

final exchange

final exchange means the last exchange of payment items at each regional exchange point for the current ACSS cycle. (échange final)

group

group means a group described in section 28 and includes the group clearer. (groupe)

group clearer

group clearer means a member that, on its own behalf or on behalf of the entities belonging to the group in respect of which it is appointed in accordance with section 28, exchanges payment items and either effects clearing and settlement or makes entries into the ACSS. (adhérent-correspondant de groupe)

indirect clearer

indirect clearer means a member on behalf of which a clearing agent exchanges payment items and either effects clearing and settlement or makes entries into the ACSS. (sous-adhérent)

pledge

pledge means a grant to the Bank of Canada of security in collateral to guarantee an advance of funds that the Bank of Canada may make for the purposes described in section 34.2 and includes a grant of security in which the Bank of Canada does not take possession of the collateral. (nantissement)

regional exchange point

regional exchange point means each location in Canada designated in the rules for the exchange of payment items among direct clearers, group clearers and clearing agents, or between one of them and the Bank of Canada, and includes the National Electronic Settlement Region within the meaning of the rules. (point régional d’échange)

settlement

settlement means the payment of the clearing balance. (règlement)

  • SOR/2012-161, s. 3
  • SOR/2015-185, s. 21
  • SOR/2018-16, s. 1

General

Marginal note:Notices

  •  (1) Every notice required under this By-law shall be given in accordance with the rules.

  • Marginal note:Waiver of notice

    (2) Any person entitled to be given notice under this By-law may waive the notice.

PART 1Payment Items

DIVISION 1Application

Marginal note:Application — exchanges

  •  (1) This Part applies to the following exchanges:

    • (a) in respect of payment items giving rise to clearing through the ACSS,

      • (i) the exchange among direct clearers, group clearers and clearing agents, or between one of them and the Bank of Canada, and

      • (ii) the exchange between indirect clearers through their respective clearing agent; and

    • (b) in respect of payment items not giving rise to clearing through the ACSS,

      • (i) the exchange between an indirect clearer and its clearing agent,

      • (ii) the exchange between indirect clearers that are represented by the same clearing agent, through that agent,

      • (iii) the exchange between a group clearer and an entity belonging to the group, and

      • (iv) the exchange among the entities belonging to a group, through the group clearer.

  • Marginal note:Application — clearing and settlement

    (2) This Part also applies to the clearing of payment items that are the object of an exchange referred to in subsection (1) and to the resulting settlement.

DIVISION 2General

Marginal note:Obligation — non-member entities

 Every member that exchanges payment items and either effects clearing and settlement or makes entries into the ACSS on behalf of a local referred to in subparagraph 6(1)(a)(ii) shall ensure that the local complies with the by-laws and the rules as if it were a member.

  • SOR/2010-43, s. 55

Marginal note:Means of settlement

 Settlement is effected by one of the following means, as specified in the rules:

  • (a) [Repealed, SOR/2021-182, s. 54]

  • (a.1) by a payment message as defined in section 1 of the Canadian Payments Association By-law No. 9 — Lynx;

  • (b) on the basis of clearing balances established by the ACSS; or

  • (c) through a clearing agent.

DIVISION 3Payment Items Acceptable for Clearing

Classes of Payment Items

Marginal note:Approved payment items

  •  (1) Paper-based payment items and electronic payment items that are specified in the rules and that conform to the following requirements may be exchanged for the purpose of clearing and settlement:

    • (a) they are drawn on

      • (i) a member, or

      • (ii) a local that belongs to a central or a cooperative credit association that is a member; and

      • (iii) [Repealed, SOR/2010-43, s. 56]

    • (b) they

      • (i) are payable on demand,

      • (ii) are identified in accordance with the rules, and

      • (iii) conform to the requirements set out in the rules, including those relating to value and value date.

  • Marginal note:Payment items specified in the rules

    (2) Paper-based payment items and electronic payment items that do not conform to the requirements in subsection (1) but are specified in the rules and conform to the requirements set out in the rules may also be exchanged for the purpose of clearing and settlement.

  • SOR/2010-43, s. 56
  • SOR/2012-161, s. 4

Government Payment Items

Marginal note:Government payment items

 Paper-based payment items and electronic payment items drawn on or by the Receiver General of Canada and payable by the Government of Canada that are specified in the rules may be exchanged for the purpose of clearing and settlement.

International Payment Items

Marginal note:Classes of international payment items

 International payment items that are specified in the rules and that fall within a class specified in the rules may be exchanged for the purpose of clearing and settlement.

Payment Items in Dispute

Marginal note:Prohibition

 Members shall not exchange, for the purpose of clearing and settlement, payment items in dispute within the meaning of the rules.

 [Repealed, SOR/2012-161, s. 5]

 [Repealed, SOR/2012-161, s. 5]

 [Repealed, SOR/2012-161, s. 5]

 [Repealed, SOR/2012-161, s. 5]

DIVISION 4Exchange, Clearing and Settlement

Marginal note:Exchange irrevocable and irreversible

 Every exchange of a payment item shall become irrevocable and irreversible at the time specified in the rules or, failing such time, when settlement is effected.

Marginal note:Compliance with by-laws and rules

 Every member shall exchange payment items in accordance with the by-laws and the rules and ensure that its payment items comply with the provisions of the by-laws and the rules.

Marginal note:Settlement account — indirect clearers

  •  (1) Every indirect clearer shall maintain a settlement account with each of its clearing agents.

  • Marginal note:Loan facilities

    (2) Every indirect clearer shall establish a loan facility with each of its clearing agents.

  • Marginal note:Settlement account and loan facility

    (3) An indirect clearer may maintain a settlement account and establish a loan facility with a central that has been designated in accordance with subsection 33(2).

  • SOR/2012-161, s. 6

DIVISION 5Return of Payment Items

Marginal note:Returns in accordance with the rules

 Despite section 14, payment items, the exchange of which becomes irrevocable and irreversible when settlement is effected, may be returned after settlement in accordance with, and for the reasons set out in, the rules.

Marginal note:Acceptance of returned payment items

 Every member shall accept payment items returned to it in accordance with the rules.

PART 2Automated Clearing Settlement System

DIVISION 1Application

Marginal note:Application

 This Part applies to the exchange of payment items giving rise to clearing through the ACSS, and to the clearing of those payment items and the resulting settlement.

DIVISION 2General

Marginal note:Exclusion of liability

 Neither the Association nor a director, an officer or an employee is liable for any loss or damage suffered by a member for anything done or omitted to be done, honestly and in good faith, in relation to the ACSS, in the administration or discharge of any powers or duties that under this By-law are intended or authorized to be executed or performed.

  • SOR/2010-43, s. 57

Marginal note:Ownership

 The Association owns the ACSS.

Marginal note:ACSS operated by Association

 The operation, management and ongoing maintenance of the ACSS form part of the business of the Association.

Marginal note:Operation of ACSS

 Subject to section 46 and except in case of a national failure of the ACSS within the meaning of the rules, the Association shall ensure that the ACSS is operational on all business days.

Marginal note:Access to information

 Access to information relating to clearing and to the operation of the ACSS shall be governed by the rules.

DIVISION 3Participation in the ACSS

Participants

Marginal note:Participants

 Only direct clearers, group clearers, clearing agents and the Bank of Canada may make entries into the ACSS.

Requirements

Marginal note:Direct Clearers Appointment

 Subject to section 32, the Board may, on completion by a member of the application procedures set out in the rules, appoint the member to act as a direct clearer if the member

  • (a) maintains a settlement account with the Bank of Canada;

  • (b) has established a loan facility with the Bank of Canada and has entered into any agreements that may be required by the Bank of Canada governing the settlement of the member’s clearing balance, the administration of the loan facility, the provision by the Bank of Canada of advances for ACSS purposes and the pledging of collateral to secure advances that may be made under the loan facility; and

  • (c) [Repealed, SOR/2020-167, s. 4]

  • (d) meets the technical, financial and other requirements set out in the rules.

Marginal note:Revocation of status

  •  (1) The Board may revoke the direct clearer status of a member if that member no longer meets the requirements set out in section 26.

  • Marginal note:Notification of revocation

    (2) The President shall, as soon as practicable, notify all members of the revocation.

  • SOR/2010-43, s. 58

Marginal note:Groups and Group Clearers Composition of group

  •  (1) A group may consist of

    • (a) a central or cooperative credit association that has been appointed to be the group clearer and one or more of the following, including any combination of them:

      • (i) centrals,

      • (ii) cooperative credit associations,

      • (iii) federal credit unions,

      • (iv) locals that belong to the group clearer, or

      • (v) locals that belong to another central or cooperative credit association if that central or cooperative credit association is also a member of the group; or

    • (b) two or more members from one of the following categories that have appointed a member of the category to be the group clearer:

      • (i) authorized foreign banks and banks, excluding federal credit unions,

      • (ii) trust companies and loan companies,

      • (iii) securities dealers, or

      • (iv) other members, excluding centrals, cooperative credit associations, federal credit unions, qualified corporations, trustees of qualified trusts and life insurance companies.

  • Marginal note:Central may act for locals

    (2) For greater certainty, if two or more locals belong to two centrals, one of which belongs to the other central, one of the centrals may appoint the other central to act as group clearer for itself and the locals.

  • SOR/2012-279, s. 2
  • SOR/2015-185, s. 22
 

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