Financial System

The Canadian Payments Association

The Canadian Payments Association (CPA) is a not-for-profit organization created by an Act of Parliament in 1980 under the Canadian Payments Association Act. The Act was replaced in 2001 by the Canadian Payments Act (the CP Act).

Mandate and services

The mandate of the CPA is to:

• establish and operate national systems for the clearing and settlement of payments and other arrangements for the making or exchange of payments.
• 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
• facilitate the development of new payment methods and technologies.

In fulfilling its mandate, the CPA has the public policy objective to "promote the efficiency, safety and soundness of its clearing and settlement systems and take into account the interests of users." The CPA owns and operates the two national payments systems in Canada, the Automated Clearing Settlement System (ACSS) and the Large Value Transfer System (LVTS). The CPA, through its Board of Directors, sets bylaws, rules, and standards that govern members' participation in these systems and outlines operational procedures.

Membership and governance

Membership in the CPA includes the Bank of Canada, domestic banks, and authorized foreign banks. Other deposit-taking institutions (credit union centrals and trust and loan companies, and provincial savings offices) have been eligible for membership since 1980. The new CP Act in 2001 opened membership to life insurance companies, securities dealers, and money market mutual funds.

The CPA is managed by a 16-person Board of Directors, the Chair of which is an officer of the Bank of Canada. Three further positions on the Board are appointed by the Minister of Finance, and the rest are elected by members in a proportion representative of the different classes of institutions that are members of the Association. Also contributing to the work of the CPA is the Stakeholder Advisory Council (SAC), which provides advice to the Board on payment, clearing, and settlement issues. The group, which can include up to 20 persons, is broadly representative of the users of the CPA's services and the service providers.

The CPA operates under the authority of the 2001 CP Act. The Board of Directors administers the proprietary payments systems and fulfils its mandate on behalf of its member institutions. All CPA bylaws are approved by the Governor in Council, i.e., the federal government cabinet.