Retail Payment Activities Act (S.C. 2021, c. 23, s. 177)

Marginal note:Framework

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  17 (1) For the purposes of identifying and mitigating operational risks and responding to incidents, a payment service provider that performs retail payment activities must, in accordance with the regulations, establish, implement and maintain a risk management and incident response framework that meets prescribed requirements.

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  Marginal note:Assessment by Bank

  (2) The Bank or a person designated by the Bank may assess the payment service provider’s risk management and incident response framework or any portion of it and the Bank may provide the payment service provider with a list of corrective measures that the Bank considers appropriate.

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  Marginal note:Duty to assist

  (3) The payment service provider must give all assistance that is reasonably required to enable the Bank or the designated person to carry out an assessment referred to in subsection (2) and must provide any documents or information and access to any data that are specified by the Bank or the designated person.

Marginal note:Requirement to notify

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  18 (1) If a payment service provider that performs retail payment activities becomes aware of an incident that has a material impact on any of the following individuals or entities, the payment service provider must, without delay, notify that individual or entity and the Bank of the incident:

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    (a) an end user;

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    (b) a payment service provider that performs retail payment activities, whether or not this Act applies to the payment service provider; and

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    (c) a clearing house of a clearing and settlement system, as those expressions are defined in section 2 of the Payment Clearing and Settlement Act, that is designated under subsection 4(1) of that Act.

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  Marginal note:Form, manner and content of notice

  (2) The notice must be given in the prescribed form and manner and contain the prescribed information.

Marginal note:Follow-up notices

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  19 (1) The Bank may, by order, direct a payment service provider that has given a notice in accordance with section 18 to provide any follow-up notice that the Bank considers relevant.

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  Marginal note:Content of order

  (2) The order must specify

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    (a) the individuals or entities to be notified;

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    (b) when the follow-up notice is to be given and its form and manner; and

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    (c) the information to be contained in the notice.

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  Marginal note:Compliance with order

  (3) The payment service provider must comply with the order.

Marginal note:Accounts

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  20 (1) If a payment service provider performs a retail payment activity that is the holding of end-user funds until they are withdrawn by the end user or transferred to another individual or entity, the payment service provider must

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    (a) hold the end-user funds in trust in a trust account that is not used for any other purpose;

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    (b) hold the end-user funds in a prescribed account or in a prescribed manner and take any prescribed measures in relation to the funds, the account or the manner; or

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    (c) hold the end-user funds in an account that is not used for any other purpose and hold insurance or a guarantee in respect of the funds that is in an amount equal to or greater than the amount held in the account.

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  Marginal note:Exception — provincial insurance or guarantee

  (2) Subsection (1) does not apply to a payment service provider in respect of end-user funds it holds in a province if the payment service provider accepts deposits that are insured or guaranteed under an Act of that province and those end-user funds are deposits that are guaranteed or insured under that Act.

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  Marginal note:No set-off or compensation

  (3) No right of set-off or compensation may be asserted by an individual or entity that maintains an account that is referred to in paragraph (1)(a), (b) or (c) in respect of the funds held in that account.

Marginal note:Annual report

21 A payment service provider that performs retail payment activities must, at the prescribed time and in the prescribed form and manner, submit an annual report to the Bank that includes

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  (a) the prescribed information respecting the payment service provider’s risk management and incident response framework;

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  (b) the prescribed information in relation to any account referred to in subsection 20(1) and the insurance or guarantee referred to in paragraph 20(1)(c);

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  (c) any other prescribed information in relation to the holding of end-user funds for the purposes of subsection 20(1) and any regulations made for the purposes of that subsection; and

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  (d) any other prescribed information.

Marginal note:Notice — significant change or new activity

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  22 (1) A payment service provider must notify the Bank before the payment service provider makes a significant change in the way it performs a retail payment activity or before it performs a new retail payment activity. The notice must

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    (a) be given within the prescribed period;

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    (b) be in the prescribed form and manner; and

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    (c) include the prescribed information.

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  Marginal note:Significant change

  (2) For the purposes of subsection (1), a change is significant if it could reasonably be expected to have a material impact on operational risks or the manner in which end-user funds are safeguarded.

Marginal note:Registration required

23 A payment service provider must be registered with the Bank before it performs any retail payment activities.

Marginal note:New application — acquisition of control

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  24 (1) If an individual or entity plans to acquire control of a registered payment service provider, the registered payment service provider must, before the acquisition, submit a new application for registration that takes the planned acquisition into account and be so registered.

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  Marginal note:New application — other change

  (2) If a registered payment service provider plans to make a prescribed change, the registered payment service provider must, before the change takes effect, submit a new application for registration that takes the planned change into account and be so registered.

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  Marginal note:Non-application

  (3) Subsection (1) does not apply in the case of a planned acquisition that would, on the day on which it is planned to take effect, result in this Act no longer applying to the registered payment service provider by virtue of section 9 or 10.

Marginal note:Duty to register

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  25 (1) Subject to sections 35, 37, 48 and 49, the Bank must register any individual or entity that applies for registration.

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  Marginal note:Notice of registration

  (2) The Bank must, as soon as feasible, notify the applicant in writing that the applicant has been registered.

Marginal note:Registry

26 The Bank must maintain a registry of registered payment service providers and must make public the name of each registered payment service provider, its address and any prescribed information in relation to the payment service provider, the activities it performs or its registration.

Marginal note:List of refusals and revocations

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  27 (1) The Bank must maintain and publish a list of the individuals or entities that the Bank has refused to register and the payment service providers that have had their registrations revoked. The list must set out the reasons for a refusal or revocation.

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  Marginal note:Reviews

  (2) The Bank must not add an individual, entity or payment service provider to the list unless the prescribed period for requesting the applicable review under section 41, 46, 50 or 53 has expired or the refusal or revocation has been confirmed under the section in question.

Marginal note:Execution of documents

28 Any document required or permitted to be executed or signed by more than one individual for the purposes of this Act may be executed or signed in several documents of similar form, each of which is executed or signed by one or more of the individuals. The documents, when executed or signed by all individuals required or permitted, as the case may be, to do so, are deemed to constitute one document for the purposes of this Act.

Marginal note:Form, manner and information

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  29 (1) An applicant for registration must submit an application in the prescribed form and manner that includes

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    (a) the applicant’s name and any name under which the applicant performs or plans to perform payment functions as a service or business activity;

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    (b) the applicant’s address and any prescribed contact information;

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    (c) a declaration that states whether the applicant operates or plans to operate out of a dwelling-house;

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    (d) a description of how the applicant is organized or structured and, as applicable, any prescribed information in relation to the applicant’s incorporation, affiliated entities, directors and managers or owners;

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    (e) a list of the applicant’s agents and mandataries that perform retail payment activities in the scope of their authority as an agent or mandatary and any prescribed information in relation to those agents and mandataries;

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    (f) a description of the retail payment activities the applicant performs or plans to perform, including any prescribed information in relation to the volume and value or estimated volume and value of those retail payment activities;

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    (g) the number of end users or estimated number of end users for whom the applicant performs or plans to perform retail payment activities;

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    (h) any prescribed information in relation to end-user funds that the applicant holds or plans to hold;

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    (i) a description of the applicant’s risk management and incident response framework or the framework that the applicant plans to establish and implement;

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    (j) any prescribed information in relation to the manner in which the applicant safeguards or plans to safeguard end-user funds;

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    (k) any prescribed information in relation to any of the applicant’s third-party service providers that have or will have a material impact on the applicant’s operational risks or the manner in which the applicant safeguards or plans to safeguard end-user funds;

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    (l) a declaration that states whether the applicant is registered with the Centre;

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    (m) a declaration that states whether the applicant has a place of business in Canada;

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    (n) a declaration that states whether the applicant has applied for registration or is registered under a provincial Act respecting retail payment activities;

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    (o) in the case of an applicant that does not have a place of business in Canada, the name and address of an agent or mandatary in Canada that is authorized, on behalf of the applicant, to accept notices given or served under this Act as well as orders made under this Act; and

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    (p) any information in relation to the applicant or the retail payment activities the applicant performs or plans to perform that is prescribed for the purposes of sections 34 to 45.

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  Marginal note:Registration fee

  (2) The applicant must include the prescribed registration fee with the application.

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  Marginal note:Additional information

  (3) The applicant must provide the Bank with any additional information that the Bank requests in relation to the information referred to in subsection (1) within 30 days after the day on which the request is made.