FEDERAL REG

SOR/2017-1: Canadian Payments Association By-law No. 1 — General Canadian Payments Act

REGISTRATION OF FEDERAL REGULATION - VIA PART II OF THE GAZETTE

Registered
January 4, 2017


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the By-law.) Issues The current Canadian Payments Association (CPA) By-law No. 1 — General will be repealed and replaced by the proposed By-law No. 1 — General to give effect to recent amendments to the Canadian Payments Act. Background The CPA is a statutory body created by the Canadian Payments Act with a mandate to establish a... (Click for more)


House

1st Reading 2nd Reading 3rd Reading

Senate

1st Reading 2nd Reading 3rd Reading

Published on January 4, 2017

Bill Summary

SOR/2017-1: Canadian Payments Association By-law No. 1 — General Canadian Payments Act

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the By-law.) Issues The current Canadian Payments Association (CPA) By-law No. 1 — General will be repealed and replaced by the proposed By-law No. 1 — General to give effect to recent amendments to the Canadian Payments Act. Background The CPA is a statutory body created by the Canadian Payments Act with a mandate to establish and operate national systems for the exchange, clearing, and settlement of payments between banks, credit unions, and other CPA members. Two systems operated by the CPA are the Automated Clearing Settlement System (ACSS) and the Large Value Transfer System (LVTS). In addition to operating these systems, the CPA develops, implements and updates the rules and standards that govern the clearing and settlement of payments exchanged in Canada. The Association operates on a not-for-profit basis, with annual operating and capital expenditure budgets prepared by the Board of Directors, funded by dues paid by members. The Canadian Payments Act was amended by the Economic Action Plan 2014 Act, No. 2. The amendments established a new Member Advisory Council, with a statutory mandate to provide counsel and advice to the Board on the operation of the clearing and settlement systems; the interaction of those systems with other systems involved in the exchange, clearing or settlement or payments; and the development of new technologies. The Member Advisory Council is intended to be a new consultative and engagement forum for the membership of the CPA, providing payments knowledge and expertise, and facilitating effective dialogue between the Council, the Board and CPA management. CPA By-law No. 1 — General was amended effective August 1, 2015, in order to repeal, and transfer provisions that address the internal administration of the business of the Association under another by-law (CPA By-Law No. 8 — Administration), which represented a new category of by-laws established following the legislative amendments in 2014. Further amendments to CPA By-law No. 1 — General are being made to implement the Member Advisory Council and to make updates and clarifications to other provisions. Given that By-law No. 1 currently contains several provisions that were already repealed through previous amendments and transferred to By-law No. 8, the current By-law No. 1 would be entirely repealed and replaced by the proposed CPA By-law No. 1 — General. Objectives The objectives of the amendments are to 1. give effect to the revised legislation; 2. make minor updates and clarifications; and 3. revise the structure of the By-law. Description Amendments are made to include eligibility criteria for membership in the Member Advisory Council (MAC). These provisions include the maximum number of representatives on MAC; the requirement for MAC representatives to have relevant expertise and experience; and a complete set of rules on how MAC representatives are appointed. Amendments are also made to the Stakeholder Advisory Council eligibility criteria. These amendments remedy a potential conflict of interest situation with the new governance structure established by the revised legislation (i.e. an individual who is an independent CPA Board director will not be eligible to serve on the Council as a representative of a stakeholder) and expand on relevant criteria to be used in assessing nominees. Additional minor and non-substantive amendments are proposed to the Stakeholder Advisory Council provisions and other provisions in By-law No. 1. The title of the French version of the By-law was also amended to conform to current drafting standards. The English title was not modified. “One-for-One” Rule The “One-for-One” Rule does not apply, as the regulatory changes do not impose new costs on businesses. Small business lens The small business lens does not apply to this By-law, as there are no costs to small business. Consultation The CPA has consulted with its membership through various board-level and management advisory committees. The Stakeholder Advisory Council has been consulted on amendments affecting that Council. Rationale Repealing and replacing the By-law is needed to give effect to recent amendments to the Canadian Payments Act and to make a number of minor and non-substantive updates and clarifications. Implementation, enforcement and service standards In accordance with subsection 18(2) of the Canadian Payments Act, the By-law changes require approval of the Minister of Finance to come into force. Following ministerial approval, the by-laws must be sent to all CPA members by the President of the CPA. The amendments do not require any new mechanisms to ensure compliance and enforcement. The CPA is responsible for ensuring that its members comply with the by-laws, as applicable. Contact Deborah Wilson Senior Legal Counsel and Principal Legal and Regulatory Affairs Canadian Payments Association Constitution Square, Tower II 350 Albert Street, Suite 800 Ottawa, Ontario K1R 1A4 Email: [email protected] Footnote a S.C. 2014, c. 39, ss. 342(1) to (4) Footnote b R.S., c. C-21; S.C. 2001, c. 9, s. 218 Footnote c S.C. 2014, c. 39, s. 342(5) Footnote d R.S., c. C-21; S.C. 2001, c. 9, s. 218 Footnote 1 SOR/2003-174

This Bill does not amend any statutes.

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