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Bill C-38

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        (i) at the demand of their holder, and

        (ii) at prices determined and payable in accordance with specified conditions,

      (b) whose units referred to in paragraph (a) have a fair market value, determined without regard to any voting rights attached to the units, that is not less than 95% of the fair market value of all of the issued units of the trust, and

      (c) whose assets constitute a money market mutual fund;

``securities dealer''
« courtier en valeurs mobilières »

``securities dealer'' means a body corporate that is registered or licensed under the laws of a province to trade in securities, as agent or for its own behalf;

``trustee''
« fiduciaire »

``trustee'', in respect of a qualified trust, means a trustee that is a body corporate;

``user''
« usager »

``user'' means

      (a) in Part 1, a person who is a user of payment services but is not a member, and

      (b) in Part 2, a person who is a user of services provided by a payment system but is not a participant in the system.

(5) Subsection 2(1) of the English version of the Act is amended by adding the following in alphabetical order:

``Chairperson' '
« président »

``Chairperson'' means the Chairperson of the Board referred to in section 15;

1991. c. 45, s. 546(2)

(6) Subsection 2(2) of the Act is replaced by the following:

Societies and federations

(2) For the purposes of Part 1 , a local cooperative credit society, a cooperative credit association , a central cooperative credit society or a federation of cooperative credit societies is deemed not to be a loan company or a trust company.

212. The Act is amended by adding the following after section 2:

ACT BINDING ON HER MAJESTY

Her Majesty

2.1 (1) This Act is binding on Her Majesty in right of Canada.

Her Majesty in right of a province

(2) If Her Majesty in right of a province becomes a member of the Association, this Act is binding on Her Majesty in right of the province.

213. The heading before section 3 of the Act is replaced by the following:

PART 1

CANADIAN PAYMENTS ASSOCIATION

Establishment and Membership

214. The heading before section 4 of the Act is repealed.

215. (1) Paragraph 4(1)(d) of the Act is replaced by the following:

    (d) any other person who is entitled under this Part to be a member and who, on application to the Association for membership in the Association, establishes entitlement to be a member.

(2) Subsections 4(2) to (4) of the Act are replaced by the following:

Entitled members

(2) Each of the following persons is entitled to be a member of the Association if they meet the requirements set out in the regulations and the by-laws:

    (a) a central, a trust company, a loan company and any other person, other than a local that is a member of a central or a cooperative credit association , that accepts deposits transferable by order to a third party;

    (b) a federation, if the federation has as one of its members a central that is a member of the Association, except that the federation may not vote at any meeting of members of the Association;

    (c) Her Majesty in right of a province or an agent thereof, if Her Majesty in right of the province or the agent thereof accepts deposits transferable by order to a third party;

    (d) a life insurance company;

    (e) a securities dealer;

    (f) a cooperative credit association;

    (g) the trustee of a qualified trust; and

    (h) a qualified corporation, on behalf of its money market mutual fund.

(3) Paragraph 4(2)(b) of the Act, as enacted by subsection (2), is repealed.

(4) Subsection 4(6) of the Act is replaced by the following:

Termination of membership

(6) A member, other than a member referred to in paragraphs (1)(a) to (c), ceases being a member of the Association three days after the day on which the Board adopts a resolution, by a majority of not less than two-thirds of the votes cast by directors voting in respect of the resolution, declaring that, in the opinion of the Board, the member does not meet the requirements set out in the regulations and the by-laws.

(5) Paragraph 4(7)(b) of the Act is replaced by the following:

    (b) eligible, despite any other provision of this Part , for readmission to the Association as a member until a resolution is adopted by the Board, by a majority of not less than two-thirds of the votes cast by directors voting in respect of the resolution, declaring that, in the opinion of the Board, the member or former member concerned meets the requirements set out in the regulations and the by-laws; or

216. Section 5 of the Act is replaced by the following:

Objects

5. (1) The objects of the Association are to

    (a) establish and operate national systems for the clearing and settlement of payments and other arrangements for the making or exchange of payments;

    (b) facilitate the interaction of its clearing and settlement systems and related arrangements with other systems or arrangements involved in the exchange, clearing or settlement of payments; and

    (c) facilitate the development of new payment methods and technologies.

Duty of Association

(2) In pursuing its objects, the Association shall promote the efficiency, safety and soundness of its clearing and settlement systems and take into account the interests of users.

217. The portion of subsection 6(1) of the Act before paragraph (a) is replaced by the following:

Powers

6. (1) The Association may, in carrying out its objects ,

218. Section 8 of the Act is replaced by the following:

Composition

8. There shall be a Board of Directors of the Association consisting of sixteen persons elected or appointed in accordance with section 9.

219. (1) Paragraph 9(1)(b) of the English version of the Act is replaced by the following:

    (b) an officer of the Bank to be an alternate director to the director appointed under paragraph (a) and the alternate director so appointed may act as a director during any period in which the director for whom he or she is an alternate is, by reason of absence or incapacity, unable to act.

1993, c. 34, s. 46(F); 1999, c. 28, s. 112

(2) Subsections 9(2) to (4) of the Act are replaced by the following:

Appointments by Minister

(1.1) The Minister shall appoint three directors of the Association to hold office for a term of not more than three years, except that the first director appointed shall be appointed to hold office for a term of three years, the second shall be appointed to hold office for a term of two years and the third shall be appointed to hold office for a term of one year.

Disqualifi-
cations

(1.2) No person is eligible to be appointed under subsection (1.1) or, having been appointed under that subsection, to continue as a member of the Board who is

    (a) a director, an officer or an employee of a person that is eligible to apply to be a member of the Association, or of an affiliate of such a person;

    (b) a member of the Stakeholder Advisory Council;

    (c) employed in any capacity in the public service of Canada or a province or holds any office or position for which any salary or other remuneration is payable out of public moneys; or

    (d) a member of the Senate or House of Commons or a member of a provincial legislature.

Election by members

(2) Subject to subsection (3), twelve directors of the Association shall be elected by the members to hold office for a term of three years, except that of those first elected four shall be elected for a term of three years, four for a term of two years and four for a term of one year.

Composition of Board

(3) For the purpose of election of directors, the members, other than the Bank of Canada, shall be grouped into seven classes, namely,

    (a) banks and authorized foreign banks;

    (b) centrals and cooperative credit associations ;

    (c) trust companies and loan companies;

    (d) qualified corporations and trustees of qualified trusts;

    (e) securities dealers;

    (f) life insurance companies; and

    (g) other members .

Each class may elect from among representatives named by the members of that class the number of directors set out in the regulations.

Removal of director

(4) If a resolution passed by a two-thirds majority of the members of a class described in subsection (3) who are present at a special meeting of members of that class called to consider the resolution provides for the recall of a director elected by that class, then, despite subsection (2), that director ceases to be a director of the Association at the time notice of the resolution is given to the director or at any other time that may be fixed by by-law.

Remunera-
tion of directors

(5) A director appointed under subsection (1.1) shall be paid by the Association such remuneration as may be fixed by by-law.

Affiliated bodies corporate

(6) For the purposes of paragraph (1.2)(a),

    (a) one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person; and

    (b) if two bodies corporate are affiliated with the same body corporate at the same time, they are deemed to be affiliated with each other.

Definition of control

(7) In paragraph (6)(a), ``control'' means control in any manner that results in control in fact, whether directly through the ownership of securities or indirectly through a trust, agreement or arrangement, the ownership of any body corporate or otherwise.

1993, c. 34, s. 47(F); 1999, c. 28, s. 113

220. Section 10 of the Act is repealed.

221. Section 12 of the English version of the Act is replaced by the following:

Election of alternates

12. At every meeting of members at which a director is elected, the members of the class that elected the director shall elect an alternate director for that director and the alternate director so elected may act as a director during any period in which the director for whom he or she is an alternate is, by reason of absence or incapacity, unable to act.

222. Subsections 13(2) and (3) of the Act are replaced by the following:

Quorum

(2) At a meeting of a class of members at which a director is to be elected, the members of that class present or deemed to be present, in person or by proxy, constitute a quorum if, together, they are entitled to cast a majority of the votes that may be cast for the election of a director by all members of that class.

223. The heading before section 15 of the Act is replaced by the following:

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