Payment Clearing and Settlement Act (S.C. 1996, c. 6, Sch.)

Marginal note:Termination

• 13. (1) Despite anything in any law relating to bankruptcy or insolvency or any order of a court made in respect of a reorganization, arrangement or receivership involving insolvency, a party to a netting agreement may terminate the agreement and determine a net termination value or net settlement amount in accordance with the provisions of the agreement and the party entitled to the net termination value or net settlement amount is to be a creditor of the party owing the net termination value or net settlement amount for that value or amount.

• Marginal note:Eligible financial contract

  (1.1) If a netting agreement referred to in subsection (1) is an eligible financial contract, a party to the agreement may also, in accordance with the provisions of that agreement, deal with financial collateral including

  • (a) selling or foreclosing or, in the Province of Quebec, surrendering financial collateral; and

  • (b) setting off or compensating financial collateral or applying the proceeds or value of financial collateral.

• Marginal note:Sections 39.15 and 39.152 of Canada Deposit Insurance Corporation Act

  (1.2) Despite subsections (1) and (1.1), no action may be taken in respect of an eligible financial contract, as defined in subsection 39.15(9) of the Canada Deposit Insurance Corporation Act, if it is prevented by subsection 39.15(7.01), (7.1) or (7.11) or section 39.152 of that Act.

• Marginal note:Interpretation

  (2) The following definitions apply in this section.

  “financial collateral”

  « garantie financière »

  “financial collateral” means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

  • (a) cash or cash equivalents, including negotiable instruments and demand deposits,

  • (b) securities, a securities account, a securities entitlement or a right to acquire securities,

  • (c) a futures agreement or a futures account,

  • (d) an assignment of a right to payment or delivery against a clearing house, or

  • (e) any other collateral that is prescribed.

  “financial institution”

  « institution financière »

  “financial institution” means

  • (a) a financial institution within the meaning of section 2 of the Trust and Loan Companies Act,

  • (b) such other entity or entity within a class of entities engaged primarily in the business of providing financial services as may be designated by order of the Governor in Council to be a financial institution for the purposes of this section,

  • (c) a trustee, manager or administrator of a pension fund maintained to provide benefits under a pension plan registered under the Income Tax Act,

  • (d) the Canada Pension Plan Investment Board, or

  • (e) the Public Sector Pension Investment Board;

  “net termination value”

  « reliquat net »

  “net termination value” means the net amount obtained after setting off or compensating or otherwise netting the obligations between the parties to a netting agreement in accordance with its provisions;

  “netting agreement”

  « accord de compensation »

  “netting agreement” means an agreement between two or more financial institutions, between the Bank and one or more financial institutions or between a participant and a customer to which the participant provides clearing services that is

  • (a) an eligible financial contract; or

  • (b) an agreement that provides for the netting or set-off or compensation of present or future obligations to make payments against the present or future rights to receive payments.

  “title transfer credit support agreement”

  « accord de transfert de titres pour obtention de crédit »

  “title transfer credit support agreement” means an agreement under which title to property has been provided for the purpose of securing the payment or performance of an obligation in respect of an eligible financial contract;