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

Marginal note:Exception — immediately ceasing to act

• 43.1 (1) Despite section 43, a group clearer may immediately cease to act for an entity belonging to the group if

  • (a) the group clearer reasonably believes that the entity poses a legal, financial or operational risk to the group clearer; or

  • (b) the entity has breached a substantial term of an agreement entered into with the group clearer for the purposes of clearing and settlement.

• Marginal note:Notice

  (2) The group clearer shall, immediately on ceasing to act,

  • (a) give written notice to the entity of its decision to immediately cease to act for that entity;

  • (b) give notice of its decision to the President;

  • (c) give notice of its decision to the other entities belonging to the group for which it is a group clearer or to every indirect clearer for which it acts as clearing agent, as the case may be; and

  • (d) attempt to give notice of its decision to the direct clearers and other group clearers.

• Marginal note:Notice by the President

  (3) The President shall give notice to the direct clearers and other group clearers of the group clearer’s decision to immediately cease to act for the entity.

• Marginal note:Notice by direct clearers and group clearers

  (4) The direct clearers and other group clearers shall immediately notify every indirect clearer for which they act as a clearing agent or every entity belonging to the group for which they act as a group clearer of that decision.