Canada Deposit Insurance Corporation Act

Marginal note:Stay of proceedings

• 39.15 (1) Where an order is made under subsection 39.13(1),

  • (a) no action or other civil proceeding may be commenced or continued against the federal member institution or in respect of its assets other than a proceeding under the Winding-up and Restructuring Act commenced by the Corporation;

  • (b) no attachment, garnishment, execution or other method of enforcement of a judgment or order against the federal member institution or its assets may take place or continue;

  • (c) no creditor of the federal member institution has any remedy against the federal member institution or its assets;

  • (d) no creditor has any right of set-off against the federal member institution, which, for greater certainty, does not include the consolidation of accounts maintained in the normal course for the purpose of providing clearing and settlement services or the services referred to in paragraph (5)(c); and

  • (e) no person may terminate or amend any agreement with the federal member institution or claim an accelerated payment under any such agreement with the federal member institution by reason only of

    • (i) the federal member institution’s insolvency,

    • (ii) a default, before the order was made, by the federal member institution in the performance of its obligations under the agreement, or

    • (iii) the making of the order.

• Marginal note:Agreements overridden

  (2) Where an order is made under subsection 39.13(1), any stipulation in an agreement is of no force or effect if it

  • (a) has the effect of providing for, or permitting, anything that, in substance, is contrary to paragraph (1)(e) or 39.13(3)(b); or

  • (b) provides, in substance, that on

    • (i) the federal member institution’s insolvency,

    • (ii) the default by the federal member institution in the performance of an obligation, or

    • (iii) the making of the order

    the federal member institution ceases to have the rights to use or deal with assets that the federal member institution would otherwise have.

• Marginal note:Clearing arrangements

  (3) Subsections (1) and (2) do not apply so as to prevent a member of the Canadian Payments Association from acting or ceasing to act as a clearing agent for a federal member institution in accordance with the Canadian Payments Act and the by-laws and rules of that Association.

• Marginal note:Rights subject to set-off

  (4) A federal member institution in respect of which an order is made under subsection 39.13(1) may not enforce against a person a right to receive an amount against which the person, but for paragraph (1)(d), would have a right of set-off.

• Marginal note:Further supplies and advances

  (5) Nothing in subsection (1) or (2) shall be construed

  • (a) as prohibiting a person from requiring payments to be made in cash for goods, services, use of leased or licensed property or other valuable consideration provided after the making of the order;

  • (b) as requiring the advance to a federal member institution in respect of which an order is made under subsection 39.13(1) of money or credit after the making of the order; or

  • (c) as requiring the provision to a federal member institution in respect of which an order is made under subsection 39.13(1) of any of the following services where to do so would be likely, in the reasonable opinion of the person providing the service, to result in that person advancing money or credit to the federal member institution after the making of the order or to give rise, after the making of the order, to a claim of that person against the federal member institution, namely,

    • (i) cash management services,

    • (ii) services related to the redemption of debt instruments,

    • (iii) services related to the issuance of letters of credit or guarantees,

    • (iv) cheque certification services,

    • (v) currency supply services,

    • (vi) funds transfer services and remittance order services,

    • (vii) securities delivery and settlement services,

    • (viii) charge, credit, debit and payment card services,

    • (ix) automated banking and teller machine services,

    • (x) electronic funds transfer at point of sale services,

    • (xi) consignment cheque services,

    • (xii) other services similar to those referred to in subparagraphs (i) to (xi),

    • (xiii) any service of a kind prescribed by the regulations, and

    • (xiv) a guarantee of liabilities in respect of any of the services referred to in subparagraphs (i) to (xiii).

• Marginal note:Security agreements

  (6) Paragraphs (1)(b) to (e) and subsection (2) do not apply in respect of a remedy under, or a stipulation of, a security agreement creating a security interest in assets of a federal member institution if

  • (a) an obligation secured by the security agreement is to the Bank of Canada or the Corporation; or

  • (b) the Superintendent, on the application of the federal member institution, exempted the security agreement from the application of those paragraphs and that subsection before the making of an order under subsection 39.13(1).

• Marginal note:Financial contracts

  (7) Nothing in subsection (1) or (2) prevents the termination of any of the following agreements in accordance with their terms or the setting off of an amount payable under or in connection with any of the following agreements, namely,

  • (a) a currency or interest rate swap agreement;

  • (b) a basis swap agreement;

  • (c) a spot, future, forward or other foreign exchange agreement;

  • (d) a cap, collar or floor transaction;

  • (e) a commodity swap;

  • (f) a forward rate agreement;

  • (g) a repurchase or reverse repurchase agreement;

  • (h) a spot, future, forward or other commodity contract;

  • (i) an agreement to buy, sell, borrow or lend securities, to clear or settle securities transactions or to act as a depository for securities;

  • (j) any derivative, combination or option in respect of, or agreement similar to, an agreement or contract referred to in paragraphs (a) to (i);

  • (k) any master agreement in respect of any agreement or contract referred to in paragraphs (a) to (j);

  • (l) any master agreement in respect of a master agreement referred to in paragraph (k);

  • (m) a guarantee of the liabilities under an agreement or contract referred to in paragraphs (a) to (l); and

  • (n) any agreement of a kind prescribed by the regulations.

• Marginal note:Regulations

  (8) The Governor in Council may make regulations prescribing

  • (a) kinds of services for the purposes of subparagraph (5)(c)(xiii); and

  • (b) kinds of agreements for the purposes of paragraph (7)(n).