Economic Action Plan 2014 Act, No. 2 (S.C. 2014, c. 39)
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Assented to 2014-12-16
PART 4VARIOUS MEASURES
Division 26R.S., c. C-21; 2001, c. 9, s. 218Canadian Payments Act
Amendments to the Act
348. The Act is amended by adding the following after section 21.1:
Stakeholder Advisory Council
Marginal note:2001, c. 9, s. 238
349. (1) Subsection 21.2(3) of the Act is replaced by the following:
Marginal note:Appointment of directors
(3) The Board shall appoint up to two elected directors to be members of the Council.
Marginal note:2001, c. 9, s. 238
(2) Subsection 21.2(5) of the Act is replaced by the following:
Marginal note:Representative character
(5) The Council shall be broadly representative of users and payment service providers.
350. The Act is amended by adding the following after section 21.2:
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.
Marginal note:2007, c. 6, s. 433(F)
351. Sections 22 to 24 of the Act are replaced by the following:
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.
352. Section 25 of the Act is replaced by the following:
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.
353. Subsections 26(2) and (3) of the Act are replaced by the following:
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.
Marginal note:2001, c. 9, s. 239
354. Subsection 28(1) of the Act is replaced by the following:
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:1994, c. 24, par. 34(1)(g)(F)
355. Subsection 34(1) of the Act is replaced by the following:
Marginal note:Application of Canada Business Corporations Act
34. (1) 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.
Marginal note:2001, c. 9, s. 243
356. (1) Paragraphs 35(1)(a) to (c) of the Act are replaced by the following:
(a) providing for the mandate of committees established under section 20 or 21, eligibility criteria for membership in those committees and their number of members;
(b) respecting the election of directors of the Association, including the eligibility of persons to be elected as directors, and defining “independent” for the purposes of paragraph 8(1)(d);
(c) 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;
Marginal note:2001, c. 9, s. 243
(2) Subsection 35(2) of the Act is repealed.
357. The Act is amended by adding the following after section 48:
Marginal note:Review
49. Three years after 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.
Transitional Provisions
Marginal note:Meeting of members to be held
358. (1) 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.
Marginal note:Former directors cease to hold office
(2) 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).
Marginal note:New Board of Directors
(3) 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.
Marginal note:Appointment of directors
(4) At the commencement of the meeting of the members referred to in subsection (1), the Board of Directors shall appoint
(a) 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;
(b) 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;
(c) 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;
(d) 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
(e) one director from among those described in paragraph 8(1)(d) of the Canadian Payments Act for a term of three years.
Marginal note:Election of directors
(5) Immediately after seven directors have been appointed under subsection (4), the members shall elect
(a) one director from among those described in paragraph 8(1)(b) or (c) of the Canadian Payments Act, for a term of two years;
(b) one director from among those described in paragraph 8(1)(b) or (c) of the Canadian Payments Act, for a term of three years;
(c) one director from among those described in paragraph 8(1)(d) of the Canadian Payments Act, for a term of two years; and
(d) two directors from among those described in paragraph 8(1)(d) of the Canadian Payments Act, for a term of three years.
Marginal note:List of qualified candidates
(6) 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.
Marginal note:Chairperson
(7) 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).
Marginal note:Deeming
(8) 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.
Coming into Force
Marginal note:Order in council
359. The provisions of this Division, except section 358, come into force on a day or days to be fixed by order of the Governor in Council.
Division 271996, c. 6, sch.Payment Clearing and Settlement Act
Amendments to the Act
360. (1) The definition “systemic risk” in section 2 of the Payment Clearing and Settlement Act is replaced by the following:
“systemic risk”
« risque systémique »
“systemic risk” means the risk that the inability of a participant to meet its obligations in a clearing and settlement system as they become due, or a disruption to or a failure of a clearing and settlement system, could, by transmitting financial problems through the system, cause
(a) other participants in the clearing and settlement system to be unable to meet their obligations as they become due,
(b) financial institutions in other parts of the Canadian financial system to be unable to meet their obligations as they become due,
(c) the clearing and settlement system’s clearing house or the clearing house of another clearing and settlement system within the Canadian financial system to be unable to meet its obligations as they become due, or
(d) an adverse effect on the stability or integrity of the Canadian financial system.
(2) Section 2 of the Act is amended by adding the following in alphabetical order:
“payments system risk”
« risque pour le système de paiement »
“payments system risk” means the risk that a disruption to or a failure of a clearing and settlement system could cause a significant adverse effect on economic activity in Canada by
(a) impairing the ability of individuals, businesses or government entities to make payments, or
(b) producing a general loss of confidence in the overall Canadian payments system, which includes payment instruments, infrastructure, organizations, market arrangements and legal frameworks that allow for the transfer of monetary value.
361. Section 3 of the Act is replaced by the following:
Marginal note:Application
3. This Part applies in respect of clearing and settlement systems designated under subsection 4(1).
Marginal note:2007, c. 6, s. 441
362. Subsections 4(1) and (2) of the Act are replaced by the following:
Marginal note:Designation by Governor
4. (1) If the Governor of the Bank is of the opinion that a clearing and settlement system could be operated in a manner that poses a systemic risk or payments system risk and the Minister is of the opinion that it is in the public interest to do so, the Governor may designate the clearing and settlement system as a clearing and settlement system that is subject to this Part.
Marginal note:Revocation
(2) If the Governor of the Bank is of the opinion that the designated clearing and settlement system could no longer be operated in a manner that poses a systemic risk or payments system risk and the Minister is of the opinion that it is in the public interest to do so, the Governor may revoke the designation.
363. Section 5 of the Act and the heading before it are replaced by the following:
Information
Marginal note:Information to be provided to Bank
5. A clearing house shall, in respect of the designated clearing and settlement system, provide the Bank with any information that the Bank may request in writing, at any time and in any form and manner that is specified by the Bank.
364. Section 6 of the Act is replaced by the following:
Marginal note:Directive to clearing house
6. (1) The Governor of the Bank may issue a directive in writing to a clearing house of a designated clearing and settlement system that requires the clearing house, within any period that may be specified in the directive, to take — and to have the participants take — any corrective measures that the Governor considers necessary, if the Governor is of the opinion that systemic risk or payments system risk is being or is likely to be inadequately controlled because of
(a) the operation of the clearing and settlement system; or
(b) any actual or anticipated acts or omissions of the clearing house or of a participant.
Marginal note:Directive to participants
(2) The Governor of the Bank may issue a directive in writing to a participant that requires the participant, within any period that may be specified in the directive, to take any corrective measures that the Governor considers necessary if the Governor has formed an opinion referred to in subsection (1) that systemic risk or payments system risk is being inadequately controlled and
(a) the clearing house fails to comply with a directive that has been issued to it under subsection (1);
(b) the designated clearing and settlement system does not have a clearing house located in Canada; or
(c) in the opinion of the Governor,
(i) the risk is being inadequately controlled because of an act or omission by a participant, and
(ii) the act or omission is not subject to the by-laws, agreements, rules, procedures, guides or other documentation governing the designated clearing and settlement system.
Marginal note:Clarification
(3) For greater certainty, a directive issued under this section must not be made in respect of
(a) the capital adequacy of a participant;
(b) the management of a participant’s investments;
(c) a participant’s corporate governance;
(d) a participant’s relations with customers who are not themselves participants in the designated clearing and settlement system;
(e) a participant’s ownership structure; or
(f) any other matter that is not directly related to a participant’s participation in the designated clearing and settlement system.
Marginal note:Directive may apply to statutory system
(4) Subject to the approval of the Minister, a directive, if it so provides, applies to a designated clearing and settlement system that is established under a statute.
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