Bill S-9
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1st Session, 36th Parliament, 46-47 Elizabeth II, 1997-98
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The Senate of Canada
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BILL S-9 |
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An Act respecting depository bills and
depository notes and to amend the
Financial Administration Act
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SHORT TITLE |
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| Short title
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1. This Act may be cited as the Depository
Bills and Notes Act.
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INTERPRETATION |
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| Definitions
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2. (1) The definitions in this subsection
apply in this Act.
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| ``acceptor'' « accepteur »
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``acceptor'' means the person to whom a
depository bill is addressed and who signs
it.
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| ``clearing
house'' « chambre de compensa- tion »
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``clearing house'' means a corporation,
association, partnership, agency or other
entity that carries on in Canada the business
of providing its participants with the
clearing and settlement of transactions in
securities that are deposited with it.
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| ``depository
bill'' « lettre de dépôt »
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``depository bill'' means an order described in
section 4.
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| ``depository
note'' « billet de dépôt »
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``depository note'' means a promise described
in section 5.
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| ``drawer'' « tireur »
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``drawer'' means the person who addresses a
depository bill.
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| ``endorser'' « endosseur »
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``endorser'' means a person who, in the case
of a depository bill, signs the depository bill
otherwise than as drawer or acceptor, or in
the case of a depository note, signs the
depository note otherwise than as maker.
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| ``issue'' « émission »
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``issue'' means the first delivery of a
depository bill or note, complete in form, to
the person to whom it is payable.
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| ``maker'' « souscrip- teur »
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``maker'' means the person who makes a
depository note.
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| ``partici- pant'' « établisse- ment participant »
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``participant'' means a person who has entered
into a contract of membership with a
clearing house.
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| ``party'' « partie »
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``party'' means a person who signs a
depository bill or note.
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| ``person'' « personne »
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``person'' means a natural person, a
corporation, a trust, a partnership, a fund, an
unincorporated association or organization,
Her Majesty in right of Canada or of a
province or the government of a foreign
country or of any political subdivision of a
foreign country.
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| ``transac- tion'' « opération »
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``transaction'' means a transfer, pledge,
assignment or hypothecation of a
depository bill or note or of an interest in a
depository bill or note.
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| Deposit
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(2) For the purposes of this Act, a depository
bill or note is deposited with a clearing house
if it is accepted for deposit by the clearing
house to which it is payable and is in the
possession of that clearing house or, subject to
the instructions of the clearing house, in the
possession of the clearing house's custodian,
or a nominee of either of them.
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| Payable to
clearing house
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(3) For the purposes of this Act, a depository
bill or note is payable to a clearing house if it
is made payable to the clearing house or its
nominee, originally or by endorsement.
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HER MAJESTY |
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| Binding on
Her Majesty
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3. This Act is binding on Her Majesty in
right of Canada or a province.
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DEPOSITORY BILLS AND NOTES |
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| Depository
bill
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4. A depository bill is an unconditional
order in writing that is
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| Depository
note
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5. A depository note is an unconditional
promise in writing that is
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| Non- application of Bills of Exchange Act
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6. The Bills of Exchange Act does not apply
in respect of depository bills and notes.
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| Signature
presumed
valid
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7. In the absence of evidence to the contrary,
a signature on a depository bill or note is
presumed to be genuine and authorized.
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| Transactions
effected by
entries in
records of
clearing house
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8. (1) A transaction related to a depository
bill or note recorded by a clearing house, or
related to an interest in such a depository bill
or note, may be effected by the making of
appropriate entries in the records of the
clearing house.
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| Effect of
transactions
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(2) The transaction has the same effect as a
delivery of a bill of exchange in bearer form
under the Bills of Exchange Act.
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| Applicable
law
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(3) The transaction, including the time it
takes effect, is governed by the laws of the
jurisdiction agreed to by the clearing house
and its participants.
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| Possession
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(4) A participant in whose favour the
transaction is effected is deemed to be in
possession of the depository bill or note. If the
transaction relates to an interest in a
depository bill or note, the participant in
whose favour the transaction is effected is
deemed to be in possession of a depository bill
or note representing the interest.
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| Fungible bulk
of depository
bills or notes
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9. (1) Transactions related to like
depository bills or notes, or related to interests
in like depository bills or notes, may be
recorded by a clearing house as part of a
fungible bulk and the entries may refer merely
to a quantity of like depository bills or notes.
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| Entries on net
basis
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(2) When there is more than one transaction
in depository bills or notes that are part of a
fungible bulk, a clearing house may make
entries in respect of those transactions on a net
basis.
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| Fungible bulk
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(3) For the purposes of this section,
``fungible bulk'' means a bulk of depository
bills or notes of which any unit is, by usage of
trade, the equivalent of any other unit.
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| Errors in
records
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10. Errors in the records of a clearing house
do not affect the validity or effect of the entries
or the liabilities or obligations of the clearing
house to persons adversely affected by the
errors.
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LIABILITIES AND ACTIONS |
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| Liability of
acceptor
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11. The acceptor of a depository bill is liable
to provide the clearing house to which it is
payable with funds so that the clearing house
can pay, on the depository bill's due date and
in accordance with its terms, the participants
who have an interest in the depository bill.
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| Liability of
drawer
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12. If a depository bill is dishonoured by the
acceptor, the drawer is liable to pay the
amount of the depository bill to the clearing
house to which it is payable.
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| Liability of
endorser of
depository bill
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13. If a depository bill is dishonoured by the
drawer and acceptor, every endorser is jointly
and severally liable to pay the amount of the
depository bill to the clearing house to which
it is payable.
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| Liability of
maker
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14. The maker of a depository note is liable
to provide the clearing house to which it is
payable with funds so that the clearing house
can pay, on the depository note's due date or
dates, the principal amount of the depository
note, and the interest payable by its terms, to
the participants who have an interest in the
depository note.
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| Liability of
endorser of
depository
note
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15. If a depository note is dishonoured by
the maker, every endorser is jointly and
severally liable to pay the principal amount of
the depository note, and the interest payable
by its terms, to the clearing house to which it
is payable.
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| Liability in
absence of
contract
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16. A party is liable to pay in accordance
with sections 11 to 15 whether or not the
depository bill or note constitutes a binding
contractual obligation.
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| Discharge of
liability
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17. A party who is liable to pay in
accordance with sections 11 to 15 and who
makes final and irrevocable payment of the
amounts owing to the clearing house on the
depository bill's or note's due date or dates is
discharged of that liability to pay.
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| Duty of
clearing house
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18. (1) A clearing house must enforce the
payment of a depository bill or note payable to
it and it must do so for the account and benefit
and at the expense of each participant who has
an interest in the depository bill or note.
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| Exception
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(2) A clearing house need not enforce the
payment of a depository bill or note if its
contract of membership with its participants
provides that it is not required to do so or that
the duty to enforce is conditional on the
fulfilment of conditions specified in the
contract and those conditions have not been
fulfilled.
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| Action in
name of
clearing house
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(3) If a clearing house that is required to
enforce the payment of a depository bill or
note does not do so within a reasonable time,
any participant who has an interest in the
depository bill or note may bring an action in
the name of the clearing house.
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| No beneficial
interest
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19. A clearing house has no beneficial
interest in a depository bill or note by reason
only of the fact that the depository bill or note
is payable to it, but nothing in this Act
precludes the clearing house from acquiring,
in its own right, a depository bill or note or any
interest in a depository bill or note.
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| No defences
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20. (1) A clearing house holds a depository
bill or note payable to it, and any money
received as payment of principal or interest
with respect to the depository bill or note, free
from any defence that affects the depository
bill or note or any defence that affects the
liability of any party to it, except a defence
that
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| Participants
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(2) Subsection (1) applies to a participant
who brings an action in the name of a clearing
house in accordance with subsection 18(3).
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| R.S., c. F-11;
R.S., cc. 9, 17,
22, 39, 44, 46
(1st Supp.),
cc. 15, 27, 28
(2nd Supp.),
cc. 9, 18, 31
(3rd Supp.),
cc. 1, 7, 35, 41
(4th Supp.);
1989, cc. 3,
27; 1990, cc.
1, 3, 17; 1991,
cc. 3, 6, 10,
16, 24, 38, 50;
1992, cc. 1,
26, 44, 51, 54;
1993, cc. 1, 3,
28, 31, 44;
1994, cc. 24,
31, 38, 41, 47;
1995, cc. 1, 5,
11, 17, 24, 28,
29, 44; 1996,
cc. 8, 9, 10,
11, 16, 17, 18;
1997, cc. 5, 6,
9, 14
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AMENDMENT TO FINANCIAL ADMINISTRATION ACT |
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21. Section 70 of the Financial
Administration Act is amended by striking
out the word ``or'' at the end of paragraph
(a), by adding the word ``or'' at the end of
paragraph (b) and by adding the following
after paragraph (b):
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