Canadian Payments Act (R.S.C., 1985, c. C-21)

Rules, Statements of Principle and Standards

Marginal note:Rules

• 19 (1) 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

  • (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.

• (2) [Repealed, 2014, c. 39, s. 344]

• Marginal note:Rules to be available

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

• Marginal note: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.

Marginal note:Statements of principle and standards

19.1 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.

Disallowance

Marginal note: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.

• Marginal note: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.

• Marginal note:Minister’s disallowance

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

Directives

Marginal note: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 issue a written directive to the Association, including a directive to make, amend or repeal a by-law, rule or standard.

• Marginal note: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. 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.

• Marginal note: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.

• Marginal note: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.

• Marginal note:Implementation

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

• Marginal note:Duty to comply

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

Information Requirements

Marginal note: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.

Marginal note:Notice of developments

19.5 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.

Committees of the Board

Marginal note:Nominating committee

• 20 (1) The Board shall establish a nominating committee to identify and propose qualified candidates for the election of directors.

• Marginal note:Composition

  (2) The nominating committee shall consist of elected directors, a majority of whom shall be directors referred to in paragraph 8(1)(d).

• Marginal note:Representative character

  (3) 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.

Marginal note:Other committees

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

Marginal note: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.

Stakeholder Advisory Council

Marginal note:Stakeholder Advisory Council

• 21.2 (1) There shall be a Stakeholder Advisory Council consisting of persons appointed by the Board in consultation with the Minister.

• Marginal note: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.

• (3) [Repealed, 2019, c. 29, s. 96]

• (4) [Repealed, 2019, c. 29, s. 96]

• Marginal note:Representative character

  (5) The Council shall be broadly representative of users and payment service providers.

• (6) [Repealed, 2019, c. 29, s. 96]

• Marginal note:Remuneration

  (7) The Association may pay the remuneration that is fixed by by-law to the following persons:

  • (a) any member of the Council that falls within a class prescribed by by-laws; and

  • (b) any person who represents the interests of such a member or who is represented by such a member.

• Marginal note:Travel and living expenses

  (8) 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.

Marginal note:Report of Council

21.3 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

Marginal note:Member Advisory Council

• 21.4 (1) There shall be a Member Advisory Council consisting of persons appointed by the Board.

• Marginal note:Object

  (2) 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.

• Marginal note:Representative character

  (3) The Council shall be broadly representative of the diversity of the membership of the Association.

Budgets

Marginal note:Budgets

• 22 (1) In each year, the Board shall cause an operating budget and a budget setting out proposed capital expenditures of the Association to be prepared.

• Marginal note:Consultation

  (2) The Board shall consult the members before establishing the operating budget and capital expenditures budget.

Corporate Plan and Annual Report

Marginal note:Corporate plan

• 23 (1) 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.

• Marginal note:Contents of corporate plan

  (2) The corporate plan shall include

  • (a) the Association’s objectives;

  • (b) the strategies that the Association intends to use to achieve its objectives, including operational, financial and human resource strategies;

  • (c) the Association’s expected performance over the five-year period;

  • (d) the Association’s operating and capital expenditures budgets;

  • (e) any material changes that have occurred in respect of information provided in the previous corporate plan; and

  • (f) any other information that the Minister may require.

Marginal note:Annual report

• 24 (1) 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.

• Marginal note:Contents

  (2) The report shall include

  • (a) the financial statements of the Association and the report of the auditor;

  • (b) an evaluation of the Association’s performance with respect to the objectives established in the corporate plan;

  • (c) the annual report of the Stakeholder Advisory Council; and

  • (d) a statement of the Association’s priorities for the following fiscal year.

Annual Meeting

Marginal note:Annual meeting

25 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

• (a) receiving the financial statements of the Association for the preceding fiscal year and the report of the auditor respecting those statements;

• (b) electing directors; and

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

Auditor

Marginal note: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.

• Marginal note:Remuneration

  (2) 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.

• (3) [Repealed, 2014, c. 39, s. 353]

Fiscal Year

Marginal note:Fiscal year

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

Electronic Meetings

Marginal note: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 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.

• Marginal note: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]

Rights and Duties of Members

Marginal note: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.

30 [Repealed, 2001, c. 9, s. 240]

Insolvency

Marginal note: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.

• Marginal note: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]

• Marginal note: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.

• Marginal note: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.

• Marginal note:Definition of preference

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

• Marginal note: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.