Vol. 144, No. 6 — March 17, 2010

Registration

SOR/2010-43 February 23, 2010

CANADIAN PAYMENTS ACT

By-law Amending Certain By-laws Made Under the Canadian Payments Act

P.C. 2010-212 February 23, 2010

The Board of Directors of the Canadian Payments Association, pursuant to subsection 18(1) (see footnote a) of the Canadian Payments Act (see footnote b), hereby makes the annexed By-law Amending Certain By-laws Made Under the Canadian Payments Act.

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 18(2) of the Canadian Payments Act (see footnote c), hereby approves the annexed By-law Amending Certain By-laws Made Under the Canadian Payments Act, made by the Board of Directors of the Canadian Payments Association.

BY-LAW AMENDING CERTAIN BY-LAWS MADE UNDER THE CANADIAN PAYMENTS ACT

BY-LAW NO. 7 RESPECTING THE LARGE VALUE TRANSFER SYSTEM

1. (1) The definition “General Manager” in section 1 of By-law No. 7 Respecting the Large Value Transfer System (see footnote 1) is repealed.

(2) Section 1 of the By-law is amended by adding the following in alphabetical order:

“President” means the President of the Association or, in the absence, incapacity or incompetence of the President, any person authorized by the Board to perform the duties of the President. (président)

2. Subsection 2(5) of the French version of the By-law is replaced by the following:

(5) Lorsque le STPGV est fermé ou son fonctionnement interrompu, tout paiement effectué par les participants et toute mesure prise ou omise par eux en raison de ce paiement sont soustraits à l’application du présent règlement administratif, sauf si le message de paiement a subi avec succès tous les contrôles de limitation du risque applicables qui y sont prévus.

3. Subsection 7(3) of the By-law is replaced by the following:

(3) The duration of the payment message exchange period is determined by the President and communicated by the Association to the participants.

4. Section 10 of the By-law is replaced by the following:

10. The LVTS cycle is terminated on completion of the settlement of all participants’ multilateral net positions, and the President shall notify all participants when termination of the LVTS cycle has occurred.

5. Subsection 11(1) of the By-law is replaced by the following:

11. (1) In accordance with section 65, the President may determine the need to have more than one LVTS cycle on any business day and shall communicate that fact to all participants.

6. The portion of section 12 of the By-law before paragraph (a) is replaced by the following:

12. Except in the case of wilful misconduct of the Association, the Association, its directors and its employees have no liability whatsoever to any member for any loss or expense suffered, or liability incurred, by that member arising from the Association’s acts or omissions in connection with the LVTS, including, without limitation, a loss resulting directly or indirectly from

7. Subparagraph 13(c)(ii) of the By-law is replaced by the following:

(ii) to the extent that the member, as a new participant, did not participate in the financing of the development costs (including the costs of upgrades), a reasonable share, calculated in accordance with the Canadian Payments Association By-law No. 2 — Finance, of the unamortized portion of those development costs plus interest as at the date of its becoming a participant.

8. Section 14 of the By-law is replaced by the following:

14. (1) Any participant, except the Bank of Canada, that does not at all times comply with paragraph 13(a) shall, on notice being given of that fact by the Bank of Canada to the President, have its participant status suspended automatically.

(2) The President may at any time suspend any participant’s status as a participant, if the participant fails to meet or continue to meet the criteria for participant eligibility set out in paragraph 13(b).

(3) The President shall, as soon as reasonably practicable, notify all participants of the name of any participant that has had its participant status suspended.

9. (1) Paragraph 15(1)(b) of the By-law is replaced by the following:

(b) fails to meet or continue to meet the criteria for participant eligibility set out in paragraph 13(b).

(2) Subsection 15(2) of the By-law is replaced by the following:

(2) The President shall, as soon as reasonably practicable, notify all participants of the name of any participant that has had its participant status revoked.

10. Subsection 17(1) of the By-law is replaced by the following:

17. (1) Any participant may withdraw from participation in the LVTS after notifying the President of its intention to withdraw and paying all expenses associated with its participation in the LVTS that may be specified in the rules.

11. Subsection 32(2) of the By-law is replaced by the following:

(2) If the revaluation results in a decrease in the value assigned by the Bank of Canada to the collateral such that the value of the collateral is less than the sum of the participant’s maximum ASO and the absolute value of its tranche 1 net debit cap, the Bank of Canada shall notify the President who in turn shall notify the participant of that fact.

12. Subsection 53(2) of the French version of the By-law is replaced by the following:

(2) Le règlement d’une position nette multilatérale d’un participant ne s’effectue que lorsque le règlement des positions nettes multilatérales de l’ensemble des participants peut être effectué.

13. (1) Subsection 56(1) of the English version of the By-law is replaced by the following:

56. (1) A participant is in default for the purposes of the LVTS if, immediately on demand by the Bank of Canada or within any time period that may be specified by the Bank of Canada, it fails to obtain a discretionary advance from the Bank of Canada to enable it to settle its negative multilateral net position.

(2) Subsection 56(2) of the By-law is replaced by the following:

(2) The Bank of Canada shall notify the President of any participant in default and the President shall notify all participants of any such default.

14. Section 62 of the By-law is replaced by the following:

62. If, at any time during an LVTS cycle, a federal or provincial regulator or other supervisory body takes control of a participant or its assets or makes a declaration, in respect of a participant, that the participant is considered to be no longer viable or that the participant is unable to meet its liabilities as they become due, the President shall, immediately on becoming aware of such an action having been taken or such a declaration having been made, suspend the participant from further participation in that LVTS cycle and notify all the participants of that fact.

15. Section 63 of the By-law is replaced by the following:

63. If, after the termination of an LVTS cycle and before the opening of the following LVTS cycle, a federal or provincial regulator or other supervisory body takes control of a participant or its assets or makes a declaration, in respect of a participant, that the participant is considered to be no longer viable or that the participant is unable to meet its liabilities as they become due, the participant shall have its status for the following LVTS cycle suspended, unless otherwise indicated by the President.

16. (1) The portion of section 65 of the By-law before paragraph (a) is replaced by the following:

65. In the event that communications between the LVTS central site and one or more participants are interrupted, the ability of the LVTS central site to receive, transmit, send, approve or otherwise process a payment message or administrative message is impaired, the safe and efficient operation of the LVTS is placed into question or some other emergency affects its operations, the President may, with the prior agreement of the Bank of Canada and any other persons that may be designated by the Board,

(2) Paragraphs 65(d) and (e) of the English version of the By-law are replaced by the following:

(d) prohibit the commencement of an LVTS cycle; or

(e) direct any other action that the President may deem necessary.

17. Section 66 of the By-law is replaced by the following:

66. Unless the President directs otherwise, the procedures to be followed on the occurrence of any of the events referred to in section 65 are those that may be set out in the rules.

CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 1 — GENERAL

18. The definitions “employee” and “user” in section 1 of Canadian Payments Association By-law No. 1 — General (see footnote 2) are replaced by the following:

“employee” « employé »

“employee”, in respect of the Association, includes the President, the secretary, the financial officer and any other officer of the Association.

“user” « usager »

“user” means a person or an entity that is a user of payments systems but is not a member.

19. Section 3 of the By-law is replaced by the following:

Affixing seal

3. The Chairperson, the President, the secretary or their delegates may affix the corporate seal to any document of the Association.

20. Section 5 of the By-law is replaced by the following:

Certified true copies

5. The Chairperson, the President, the secretary or their delegates may certify a copy of any document of the Association to be a true copy of the original.

21. Section 8 of the French version of the By-law is replaced by the following:

Quorum

8. Le quorum de toute réunion du conseil est atteint lorsque le président du conseil et la majorité des autres administrateurs représentant trois des catégories de membres visées au paragraphe 9(3) de la Loi sont présents.

22. Section 13 of the French version of the By-law is replaced by the following:

Date, heure et lieu des réunions

13. (1) Le conseil tient ses réunions aux date, heure et lieu que fixe le conseil ou le président du conseil.

Demande de réunion

(2) Si quatre administrateurs font une demande de réunion par écrit au président du conseil, celui-ci en avise sans délai les autres administrateurs en leur précisant les questions dont l’examen est demandé et il convoque une réunion du conseil à cet effet dans les vingt et un jours suivant la date de réception de la demande.

23. Section 19 of the By-law is replaced by the following:

Vote

19. Subject to subsection 4(6) and paragraph 4(7)(b) of the Act, every question put to a vote at a meeting of the Board is decided by a majority of the votes cast.

24. Section 20 of the French version of the By-law is replaced by the following:

Invitation à assister aux réunions

20. Le président du conseil peut inviter toute personne à assister à une réunion du conseil et à participer aux discussions.

25. Paragraph 23(b) of the By-law is replaced by the following:

(b) filling a vacancy in the office of auditor or President;

26. Sections 27 and 28 of the French version of the By-law are replaced by the following:

Quorum

27. Le quorum de toute réunion du comité de direction est atteint lorsque le président du conseil et la majorité des autres membres représentant trois des catégories de membres visées au paragraphe 9(3) de la Loi sont présents.

Convocation des réunions

28. Les réunions du comité de direction peuvent être convoquées par le président du conseil ou par trois des membres du comité de direction, sur préavis de sept jours.

27. Sections 31 and 32 of the French version of the By-law are replaced by the following:

Président et vice-président

31. (1) Les membres du comité des finances élisent en leur sein un président et un vice-président du comité.

Vice-président

(2) Le vice-président du comité des finances fait fonction de président du comité en cas d’absence ou d’empêchement du président du comité ou, si la charge est vacante, jusqu’à l’élection du nouveau président du comité.

Quorum

32. Le quorum de toute réunion du comité des finances est atteint lorsque le président ou le vice-président du comité et une majorité des membres représentant deux des catégories de membres visées au paragraphe 9(3) de la Loi sont présents.

28. Subsections 40(2) and (3) of the French version of the By-law are replaced by the following:

Invitation à assister aux réunions

(2) Le président du comité peut, avec le consentement des autres membres du comité consultatif, inviter toute personne à assister à une réunion du comité et à participer aux discussions.

Vice-président

(3) Le vice-président du comité consultatif fait fonction de président du comité en cas d’absence ou d’empêchement du président du comité ou, si la charge est vacante, jusqu’à l’élection du nouveau président du comité.

29. Section 54 of the French version of the By-law is replaced by the following:

Participation par moyen électronique

54. Avec le consentement préalable du président du comité, des membres du comité peuvent participer à une réunion par tout moyen de communication téléphonique, électronique ou autre permettant à tous les participants de communiquer adéquatement entre eux.

30. Section 57 of the French version of the By-law is replaced by the following:

Frais

57. Le président et le vice-président du comité ainsi que les membres du comité consultatif qui représentent les intérêts de groupes de consommateurs sont indemnisés des frais de déplacement et de séjour entraînés par l’accomplissement de leurs fonctions hors du lieu de leur résidence habituelle.

31. Sections 60 and 61 of the French version of the By-law are replaced by the following:

Président

60. Le président du conseil préside toutes les réunions du conseil et du comité de direction, les assemblées des membres et, si l’avis de convocation ou la demande de convocation en fait mention, les assemblées de catégories de membres ou d’un regroupement de catégories de membres, en plus des autres fonctions qui lui sont confiées par les règlements administratifs.

Vice-président

61. L’administrateur suppléant nommé par la Banque du Canada en vertu de l’alinéa 9(1)b) de la Loi est désigné comme vice-président du conseil.

32. (1) Paragraph 63(a) of the By-law is replaced by the following:

(a) except when another employee has been given these duties under section 65, to attend and be the secretary at all meetings of the Board, committees of the Board and members and, if requested in the notice or requisition calling the meeting, at meetings of classes or of groups of classes of members;

(2) Paragraph 63(g) of the By-law is replaced by the following:

(g) to exercise any other powers and perform any other duties that the Board, the Executive Committee or the President may specify.

33. (1) Paragraph 64(a) of the By-law is replaced by the following:

(a) except when another employee has been given these duties under section 65, to keep proper accounting records in compliance with the law and to be responsible for the deposit of money, the disbursement of funds and the safekeeping of securities of the Association;

(2) Paragraph 64(c) of the By-law is replaced by the following:

(c) to exercise any other powers and perform any other duties that the Board, the Executive Committee or the President may specify.

34. Section 65 of the By-law is replaced by the following:

Powers and duties of other employees

65. The powers and duties of the other employees shall be set out in their contracts of employment with the Association or as the Board, the Executive Committee or the President may specify.

35. Subsection 66(3) of the By-law is replaced by the following:

Termination by President

(3) The President may terminate the employment of any employee, other than an employee who was appointed by the Board or the Executive Committee.

36. Subsections 74(1) and (2) of the By-law are repealed.

37. Subsection 77(1) of the By-law is repealed.

38. Sections 79 and 80 of the French version of the By-law are replaced by the following:

Assemblée annuelle

79. Sous réserve de l’article 25 de la Loi, l’assemblée annuelle des membres se tient aux date, heure et lieu fixés par le conseil ou le président du conseil.

Assemblée extraordinaire

80. Le conseil ou le président du conseil peut à n’importe quel moment convoquer une assemblée extraordinaire des membres pour régler toute affaire dont ils peuvent connaître.

39. (1) Subsection 81(1) of the French version of the By-law is replaced by the following:

Demande de convocation

81. (1) Tout regroupement de trois catégories de membres visées au paragraphe 9(3) de la Loi peut, en adressant une demande écrite signée par un tiers des membres de chacune des trois catégories, demander au président du conseil de les convoquer en assemblée.

(2) The portion of subsection 81(3) of the French version of the By-law before paragraph (a) is replaced by the following:

Convocation des assemblées

(3) Sur réception de la demande, le président du conseil convoque une assemblée des membres pour examiner les questions mentionnées dans celle-ci, sauf dans l’un ou l’autre des cas suivants :

(3) Subsection 81(5) of the French version of the By-law is replaced by the following:

Convocation par les membres

(5) Si le président du conseil ne convoque pas l’assemblée dans les vingt et un jours suivant la date de réception de la demande et qu’aucun des cas visés aux alinéas (3)a) et b) ne s’applique, trois des membres qui ont signé ou voté sur la question de la présentation de la demande peuvent convoquer l’assemblée.

40. Sections 82 and 83 of the French version of the By-law are replaced by the following:

Lieu des assemblées

82. Les assemblées des membres ont lieu à tout endroit au Canada fixé par le conseil ou le président du conseil et désigné dans l’avis de convocation.

Participation par moyen électronique

83. Avec le consentement préalable du président du conseil, des membres du comité peuvent participer à une assemblée de membres par tout moyen de communication téléphonique, électronique ou autre permettant à tous les participants de communiquer adéquatement entre eux.

41. (1) Subsections 88(1) and (2) of the By-law are replaced by the following:

Chairperson

88. (1) The Chairperson presides at all meetings of members unless the Chairperson designates the President to do so.

Chairperson selected by members

(2) If neither the Chairperson nor the President is present 15 minutes after the time fixed for holding the meeting, the members entitled to vote who are represented either personally or by proxy shall choose one of themselves to be chairperson.

(2) Subsection 88(4) of the French version of the By-law is replaced by the following:

Scrutateurs

(4) Un ou plusieurs scrutateurs — qui ne représentent pas nécessairement des membres — peuvent être nommés par le conseil avant l’assemblée ou par le président de l’assemblée avec le consentement des membres présents.

42. Subsection 89(2) of the French version of the By-law is replaced by the following:

Admission sur invitation

(2) Toute autre personne n’est admise que sur l’invitation du président de l’assemblée ou avec le consentement de l’assemblée.

43. Subsections 93(1) and (2) of the By-law are replaced by the following:

Vote

93. (1) Subject to subsection 9(4) of the Act, every question put to a vote at a meeting of members is, decided by a majority of the votes cast on the question.

Manner of taking vote

(2) The chairperson of the meeting shall specify the manner in which the vote on each question is to be taken.

44. (1) Subsection 97(1) of the French version of the By-law is replaced by the following:

Assemblée d’une catégorie

97. (1) Pour les catégories de membres visées aux alinéas 9(3)a) et b) de la Loi, deux membres d’une même catégorie représentant au moins dix pour cent de l’ensemble des voix qui peuvent être exprimées à une assemblée de leur catégorie selon l’article 3 du Règlement sur l’élection des administrateurs de l’Association canadienne des paiements peuvent convoquer n’importe quand une assemblée des membres de leur catégorie ou demander au président du conseil de convoquer une telle assemblée.

(2) The portion of subsection 97(3) of the French version of the By-law before paragraph (a) is replaced by the following:

Convocation de l’assemblée

(3) Sur réception de la demande, le président du conseil convoque l’assemblée, sauf dans l’un ou l’autre des cas suivants :

45. Subsection 98(1) of the By-law is replaced by the following:

Meeting of a group of classes

98. (1) If different classes of members are grouped together under the Canadian Payments Association Election of Directors Regulations, two of the members of that group representing at least 10% of the total votes entitled to be cast for the election of directors may at any time call a meeting of the group of classes or requisition the Chairperson to call a meeting of the group of classes.

46. Section 99 of the French version of the By-law is replaced by the following:

Assemblée extraordinaire

99. Le conseil ou le président du conseil peut à n’importe quel moment convoquer une assemblée extraordinaire d’une catégorie de membres pour régler toute affaire dont ils peuvent connaître.

47. Subsections 101(2) and (3) of the French version of the By-law are replaced by the following:

Secrétaire

(2) Sous réserve de l’alinéa 63a), le président de l’assemblée nomme à titre de secrétaire de l’assemblée une personne qui ne représente pas nécessairement un membre.

Scrutateurs

(3) Le président de l’assemblée peut, avec le consentement des membres présents à l’assemblée, nommer un ou plusieurs scrutateurs — qui ne représentent pas nécessairement des membres.

48. Section 102 of the By-law is replaced by the following:

Resolutions

102. If a resolution passed at a meeting of a class or of a group of classes of members is required to be communicated to the Board or to the President or the class or group of classes of members requests that it be communicated to them, a copy of the resolution, certified by the chairperson and the secretary of the meeting, shall be sent to the intended recipient.

49. The portion of subsection 104(1) of the By-law before paragraph (a) is replaced by the following:

Suspension

104. (1) Despite Canadian Payments Association By-law No. 6 — Compliance, the Board may suspend one or more of the rights of a member if

50. (1) Subsection 107(1) of the By-law is replaced by the following:

Method of giving notices

107. (1) Any notice to be given under the by-laws or otherwise is sufficiently given if it is given by personal delivery, transmitted by telex, telecopier, electronic mail or telegram, or sent by first class mail (except during periods of actual or threatened interruption of normal postal service because of weather or labour disturbance) postage prepaid, addressed to the intended recipient at the recipient’s address as recorded on the membership list or in the records of the Association.

(2) Subsection 107(5) of the By-law is replaced by the following:

Change of address

(5) The secretary may change or cause to be changed in the records of the Association the address of any member, director, officer, auditor or member of a committee of the Board in accordance with any reliable information.

51. Subsection 110(1) of the By-law is replaced by the following:

Waiver of notice or abridgement of time

110. (1) Any person entitled to be given a notice may, at any time, waive any notice or abridge the time for any notice required to be given to that person under any provision of the by-laws or otherwise.

CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 2 — FINANCE

52. Section 7 of Canadian Payments Association By-Law No. 2 — Finance (see footnote 3) is replaced by the following:

Member for portion of year

7. If a member was a member for only a portion of the previous fiscal year, the President shall, for the purposes of sections 5 and 6, estimate the number of payment items that the member sent and received through the applicable system for the previous fiscal year by multiplying by 12 the member’s average monthly number of payment items sent and received through the system in the previous fiscal year.

53. Subsection 14(1) of the By-law is replaced by the following:

Reassessment of dues

14. (1) If a member ceases to be a member or withdraws from participation in a system in a fiscal year and the President determines that any resulting loss in dues will not be covered by reserves or surplus in that fiscal year, the President shall reassess the dues payable in the fiscal year by the remaining members or the members that still participate in the system, as the case may be, based on those members’ proportionate share of the shortfall.

54. Subsection 16(1) of the French version of the By-law is replaced by the following:

Amende pour non versement

16. (1) En plus de toute autre mesure qui peut être prise en vertu d’un autre règlement administratif de l’Association, le membre qui omet de verser une cotisation ou un droit dans le délai imparti est tenu de payer, pour chaque jour de retard, l’amende établie selon la méthode de calcul énoncée par résolution du conseil, laquelle ne peut excéder 0,125 % de la somme non versée.

CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 3 — PAYMENT ITEMS AND AUTOMATED CLEARING SETTLEMENT SYSTEM

55. Section 4 of the Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System (see footnote 4) is replaced by the following:

Obligation — non-member entities

4. 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.

56. Paragraph 6(1)(a) of the Bylaw is amended by adding “or” at the end of subparagraph (i), by replacing “or” with “and” at the end of subparagraph (ii) and by repealing subparagraph (iii).

57. Section 20 of the Bylaw is replaced by the following:

Exclusion of liability

20. 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.

58. Subsection 27(2) of the By-law is replaced by the following:

Notification of revocation

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

59. Paragraph 29(2)(b) of the English version of the Bylaw is replaced by the following:

(b) the group clearer and the other entities belonging to the group have an aggregate payment items volume of no less than 0.5% of the total national volume of payment items giving rise to clearing through the ACSS, as determined in accordance with the rules, or any lower percentage of that volume that may be set out in the rules; and

60. Subsections 30(1) and (2) of the Bylaw is replaced by the following:

Revocation of status

30. (1) The Board may revoke the group clearer status of a member if that member no longer complies with the requirements set out in paragraphs 26(a), (b), (d) or 29(2)(b) or, in the case of a group referred to in paragraph 28(1)(b), the contractual commitments referred to in paragraph 29(2)(c) no longer ensure the ability of the member to satisfy its liability as group clearer.

Notification of revocation

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

61. Subsection 34(3) of the By-law is replaced by the following:

Notification of revocation

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

62. Subsection 36(2) of the By-law is replaced by the following:

Extension of period

(2) The President may extend the one-year period if it is necessary for the proper conduct of the business of the amalgamating members.

63. Section 37 of the By-law is replaced by the following:

Notice

37. (1) Subject to section 41, a clearing agent shall give at least 30 days’ notice to the President prior to acting as clearing agent for an indirect clearer.

Obligation of President

(2) The President shall inform the direct clearers and group clearers of the notice in accordance with the rules.

64. Subsections 38(1) and (2) of the By-law are replaced by the following:

30 days notice

38. (1) A clearing agent shall give at least 30 days’ notice to an indirect clearer and to the President prior to ceasing to act as clearing agent for the indirect clearer.

Obligation of President

(2) The President shall inform the direct clearers and group clearers of the notice in accordance with the rules.

65. (1) Paragraph 39(3)(b) of the By-law is replaced by the following:

(b) give notice of its decision to the President, to its other indirect clearers and to the other clearing agents acting for the indirect clearer and attempt to give notice of its decision to the other direct clearers and group clearers.

(2) Subsection 39(4) of the By-law is replaced by the following:

Notice by the President

(4) The President shall give notice to every other direct clearer and group clearer of the clearing agent’s decision to immediately cease to act for the indirect clearer.

66. Section 43 of the By-law is replaced by the following:

Notice

43. A group clearer shall, at least 30 days prior to its effective date, give notice to the President of its decision to cease acting as a group clearer for an entity belonging to the group or of the withdrawal of an entity from the group for which it acts as a group clearer.

67. Section 46 of the By-law is replaced by the following:

Suspension of exchanges

46. (1) If it becomes impractical to exchange any class of payment items at a particular regional exchange point on a given day, the President may, after consulting the direct clearers, group clearers and the Bank of Canada, suspend the exchange of the class of payment items or of all payment items for the regional exchange point for the current ACSS cycle.

Measures

(2) Immediately on suspension, the President shall, after consulting the direct clearers, group clearers and the Bank of Canada, take any measures that are necessary in the circumstances.

Notification of measures taken

(3) The President shall notify the direct clearers, group clearers and the Bank of Canada of the measures taken.

68. Subsection 53(2) of the By-law is replaced by the following:

Notice

(2) The Bank of Canada shall immediately notify the President who shall in turn notify all other direct clearers and group clearers of the default.

69. Subsection 57(3) of the French version of the Bylaw is replaced by the following:

Recouvrement

(3) Elle constitue, de même que l’intérêt, une créance exigible immédiatement par le déposant de l’adhérent ou adhérent-correspondant de groupe qui est en défaut.

CANADIAN PAYMENTS ASSOCIATION BY-LAW NO. 6 — COMPLIANCE

70. The definition “non-member” in subsection 1(1) of the Canadian Payments Association By-law No. 6 — Compliance (see footnote 5) is replaced by the following:

“non-member” « non-membre »

“non-member” means a local referred to in subparagraph 6(1)(a)(ii) of Bylaw No. 3. (non-membre)

71. The heading before section 2 of the By-law is replaced by the following:

INVESTIGATION INITIATED BY PRESIDENT

72. (1) Subsection 2(1) of the By-law is replaced by the following:

Initiated by President

2. (1) The President may, at any time, if the President reasonably believes that a member or a non-member has committed a contravention, refer the matter to a committee that has relevant expertise for the purposes of an investigation.

(2) The portion of subsection 2(2) of the By-law before paragraph (a) is replaced by the following:

Requirements

(2) The President shall provide the following when referring the matter to a committee:

(3) Subsection 2(3) of the By-law is replaced by the following:

Notice

(3) Immediately after the President refers a matter to a committee, the President shall give written notice to the parties that the President has referred the matter to a committee for the purposes of an investigation. The notice shall contain a description of the alleged contravention.

73. Subsection 3(1) of the By-law is replaced by the following:

Complaint

3. (1) A member may file with the President a complaint alleging that another member or non-member has committed a contravention.

74. Section 5 of the By-law is replaced by the following:

Acknowledgement of receipt

5. The President shall acknowledge, in writing, receipt of the complaint within 10 days after the day on which it is filed.

75. (1) The portion of subsection 6(1) of the By-law before paragraph (a) is replaced by the following:

Powers of President

6. (1) The President shall, if the President believes that the complaint is not frivolous, vexatious or made in bad faith,

(2) Subsections 6(2) and (3) of the By-law are replaced by the following:

Notice

(2) If the President decides to investigate a complaint or to refer a complaint to a committee, the President shall, within 30 days after the day on which the complaint is filed, give written notice to the parties of the President’s decision. The notice shall contain the details of the complaint.

Referral

(3) If the President refers a complaint to a committee, the referral shall be made within 40 days after the day on which the complaint is filed.

76. (1) Subsections 7(1) and (2) of the By-law are replaced by the following:

Frivolous complaints

7. (1) If the President decides that the complaint is frivolous, vexatious or made in bad faith, the President shall give written notice of that decision with reasons to the complainant within 30 days after the day on which the complaint is filed.

Appeal

(2) A complainant may appeal the President’s decision to the Board within 30 days after the day on which the notice of the decision is given to the complainant.

(2) Subsection 7(6) of the By-law is replaced by the following:

Notice of the hearing

(6) The secretary shall give written notice of the hearing of the appeal to the complainant and the President at least 14 days before the day of the hearing.

(3) Subsections 7(8) to (10) of the By-law are replaced by the following:

Submissions

(8) The complainant and the President shall be given the opportunity to make oral and written submissions to the Board without introducing new evidence.

Decision of Board

(9) The Board shall either confirm the President’s decision, if the Board believes the complaint is frivolous, vexatious or made in bad faith, or order that an investigation be conducted.

Requirements for decisions

(10) The decision of the Board shall be in writing with reasons and the Board shall give the decision to the complainant and the President within 30 days after the day of the hearing.

(4) The portion of subsection 7(11) of the By-law before paragraph (a) is replaced by the following:

Notice

(11) If the Board orders that an investigation be held, the President shall, within 10 days after the day on which the order is received,

77. Subsection 9(2) of the By-law is replaced by the following:

Conflict of interest

(2) If the President or a member of a compliance panel has, or appears to have, a conflict of interest, the President or the panel member, as the case may be, shall withdraw from the investigation and be replaced by a person designated by the Board.

78. (1) Subsections 12(1) and (2) of the By-law are replaced by the following:

Evidence

12. (1) The President or compliance panel, as the case may be, shall assemble information and documents that are relevant to the investigation.

Written summary

(2) The President or compliance panel, as the case may be, shall ensure that a written summary is prepared of any information that is assembled.

(2) Subsections 12(4) to (6) of the By-law are replaced by the following:

Information and documents

(4) The President or compliance panel, as the case may be, may request any member to provide information or documents that are relevant to the investigation and may make copies of them.

Duty

(5) A member shall provide, or arrange to provide, the information or documents requested, unless the member satisfies the President or compliance panel, as the case may be, that there is a good reason as to why it should not provide or arrange to provide them.

Restriction on use

(6) The President or compliance panel, as the case may be, shall use the information or documents that are assembled for the sole purpose of the investigation and for making a decision in respect of the alleged contravention.

79. Section 14 of the By-law is replaced by the following:

Experts

14. (1) The President or compliance panel, as the case may be, may engage legal and other experts. Their reasonable fees and disbursements shall be included in the expenses of the investigation.

Record

(2) Any information or documents provided to the President or compliance panel, as the case may be, by their experts, other than a legal expert, forms part of the record of the investigation.

80. Subsections 15(1) to (3) of the By-law are replaced by the following:

Hearing

15. (1) The President or compliance panel, as the case may be, shall convene a hearing unless the parties agree that a hearing is not necessary.

Date of hearing

(2) The President or compliance panel, as the case may be, shall select a date for a hearing in consultation with the parties.

Notice

(3) The President or compliance panel, as the case may be, shall give to the parties written notice of the day of a hearing at least 20 days before that day.

81. (1) The portion of subsection 16(1) of the By-law before paragraph (a) is replaced by the following:

Sanctions

16. (1) If, after an investigation, the President or compliance panel, as the case may be, decides that a member is in contravention or, in the case of a non-member alleged to be in contravention, that the non-member is in contravention and that its clearing member failed to ensure compliance by the non-member, the President or compliance panel, as the case may be, may take one or more of the following actions:

(2) Subsection 16(2) of the By-law is replaced by the following:

Recommendation to remove

(2) In addition to the sanctions referred to in subsection (1), the President or compliance panel, as the case may be, may notify the Board or any committee on which an officer or employee of the member serves that the member has committed a contravention and recommend that the officer or employee be removed from the Board or committee.

82. The portion of section 17 of the By-law before paragraph (a) is replaced by the following:

Expenses

17. The President or compliance panel, as the case may be, may determine the amount of the expenses of the investigation and order one or both of the following persons to pay all or a part of those expenses:

83. Subsection 19(1) of the By-law is replaced by the following:

Investigation by President

19. (1) When an investigation is conducted by the President, the President shall prepare a compliance report.

84. Section 21 of the By-law is replaced by the following:

Time limit

21. The President or compliance panel, as the case may be, shall give the compliance report to the parties within 30 days after the day on which the investigation has concluded.

85. Subsections 22(2) to (4) of the By-law are replaced by the following:

Interest

(2) If a member does not pay the amount within the 30-day period, the member shall pay interest calculated in accordance with subsection (3).

Calculations

(3) The interest is equal to an amount calculated in accordance with the formula

A × B × C

where

A is the amount to be paid under subsection (1);

B is the weighted average of the minimum interest rate that the Bank of Canada is prepared to charge in respect of an advance, as made public in accordance with the Bank of Canada Act, converted to a daily rate that is based on 365 days, for the period beginning on the day on which the compliance report is given to the member and ending on the day on which the amount referred to in the description of A is paid (in this subsection referred to as the interest period); and

C is the number of days in the interest period.

Amount owing added to membership dues

(4) Any amount to be paid by the member that is not paid within the 30-day period, together with the interest calculated under subsection (3), shall be added to the following year’s annual dues of that member.

86. Section 23 of the By-law is replaced by the following:

General revenue

23. The amount of any penalty or interest paid or expenses recovered under this By-law accrues to the general revenue of the Association.

87. Section 25 of the By-law is replaced by the following:

Reinstatement

25. The President or compliance panel, as the case may be, shall reinstate the rights of a member that have been suspended under subparagraph 16(1)(d) if the member applies for reinstatement and the conditions for reinstatement referred to in that paragraph have been met.

88. Section 28 of the By-law is replaced by the following:

Exclusion of liability

28. Neither the Association, nor a director, the President or a member of a compliance panel 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 the administration or discharge of any powers or duties that under this By-law are intended or authorized to be executed or performed.

COMING INTO FORCE

89. This By-law comes into force on the day on which subsection 422(3) of An Act to amend the law governing financial institutions and to provide for related and consequential matters , chapter 6 of the Statutes of Canada, 2007, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the By-law.)

Issue and objectives

In 2007, as part of a larger package of proposed amendments to financial services legislation (Bill C-37), amendments to the Canadian Payments Act were introduced in order to improve the operation and efficiency of the payments system. Consequentially, some technical amendments to Canadian Payments Association by-laws have been formulated.

Other amendments to by-laws have been made in response to questions and recommendations by the Standing Joint Committee for the Scrutiny of Regulations. In particular, amendments have been made to enhance clarity of some provisions and consistency between the French and English versions of the by-laws.

Description and rationale

The Canadian Payments Association (CPA) By-law No. 1 (General By-law), By-law No. 2 (Finance), By-law No. 3 (Payment Items and ACSS By-law), By-law No. 6 (Compliance) and By-law No. 7 respecting the Large Value Transfer System have been amended.

Consequential amendments

• Modifications have been made to reflect terminology amended in the Canadian Payments Act. For example, Bill C-37 included amendments to the Canadian PaymentsAct to replace the title “General Manager” / “directeur général” with “President” / “président”. Accordingly, the term “General Manager” / “directeur général” in the by-laws has been replaced with “President” / “président” and will come into force with the related amendments to the Canadian Payments Act. In addition, since the title of “General Manager” has been replaced by “President” / “président,” a clarification is needed to the French title of “Chairperson,” currently also “president,” in order to make a distinction between the two positions. The title of “président” has been replaced by “président du conseil.” This amendment reflects a similar amendment to the Canadian Payments Act.
• An amendment to the Canadian Payments Act was made as part of Bill C-37 to specify that CPA membership for banks and authorised foreign banks becomes effective when a bank receives its order to commence and carry on business. For members other than banks, the amendment to the Canadian Payments Act specifies that their membership takes effect on the day the membership application is approved by the CPA Board of Directors. Consequential amendments to by-laws remove the provisions dealing with the effective date of membership to coincide with the coming into force dispositions of the Canadian Payments Act.
• The Canadian Payments Act has been amended to replace “participant” with “member” to ensure that both participating and non-participating members are covered. The same amendment has been made to the by-laws.
• Some provisions of the by-laws expired on December 31, 2006. The amendments remove the spent provisions and references to them (e.g. provisions of a subparagraph of By-law No. 3 expired effective December 31, 2006. This subparagraph is referenced in By-law No. 6, in the definition of “non-member”).

Amendments in response to the Standing Joint Committee for the Scrutiny of Regulations

In response to questions and recommendations made by the Standing Joint Committee for the Scrutiny of Regulations, the following technical amendments have been made:

• modifications to ensure consistency between the French and English versions;
• removing words which include a subjective element (e.g. the word “juge” has been replaced with “estime” in subsection 14(1) of the French version of the By-law No. 6).
• adding specific and removing general references to the Act, regulations and the by-laws (e.g. a specific reference to section 65 and subsection 88(3) of By-law No. 1 have been added in order to indicate where the authority is provided for the designation of an alternate secretary and/or the establishment of his or her powers and duties as an alternate secretary); and
• re-phrasing certain provisions to reflect the intended policy and to remove subjective elements (e.g. subsection 107(5) of By-law No. 1 has been re-phrased by replacing “with any information that he or she believes to be reliable” with “with reliable information”).

Consultation

As per section 18(1) of the Canadian Payment Act, these amendments have been first presented to the CPA Board of Directors, which approved them on December 2, 2009. The CPA Board of Directors has 16 members composing a wide range of stakeholders.

Contact

Leah Anderson
Director
Financial Sector Division
Department of Finance
L’Esplanade Laurier, 20th Floor, East Tower
140 O’Connor
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-6516
Fax: 613-943-8436
Email: Leah.Anderson@fin.gc.ca

Footnote a
S.C. 2007, c. 6, ss. 429(1) and (2)

Footnote b
S.C. c. C-21; S.C. 2001, c. 9, s. 218

Footnote c
S.C. c. C-21; S.C. 2001, c. 9, s. 218

Footnote 1
SOR/2001-281

Footnote 2
SORS/2003-174

Footnote 3
SOR/2003-175

Footnote 4
SOR/2003-346

Footnote 5
SOR/2003-347

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