Canadian Payments Association By-law No. 10 — RTR: SOR/2026-133

Canada Gazette, Part II, Volume 160, Number 13

Registration
SOR/2026-133 June 18, 2026

CANADIAN PAYMENTS ACT

The Board of Directors of the Canadian Payments Association makes the annexed Canadian Payments Association By-law No. 10 — RTR under subsection 18(1)footnote a of the Canadian Payments Act footnote b.

Ottawa, March 10, 2026

Garry Foster
Chairperson of the Board of Directors of the Canadian Payments Association

The Minister of Finance, under subsection 18(2)footnote c of the Canadian Payments Act footnote b, approves the annexed Canadian Payments Association By-law No. 10 — RTR, made by the Board of Directors of the Canadian Payments Association.

Ottawa, June 8, 2026

François-Philippe Champagne
Minister of Finance

Canadian Payments Association By-law No. 10 — RTR

Interpretation

Definitions

1 (1) The following definitions apply in this By-law.

Act
means the Canadian Payments Act. (Loi)
Bank
means the Bank of Canada. (Banque)
direct settlement participant
means a participant whose RTR payment obligations are cleared and settled through its settlement account. (participant direct au règlement)
indirect settlement participant
means a participant whose RTR payment obligations are cleared and settled through the settlement account of a settlement agent. (participant indirect au règlement)
participant
means a member whose application to participate in the RTR system has been approved under subsection 5(2). (participant)
participant-to-participant transfer
means a transfer of an amount of funds in RTR Clearing and Settlement from one direct settlement participant to another direct settlement participant who is the ultimate beneficiary of the amount. (transfert entre participants)
payee
means the person to whom the fixed amount set out in a payment message is to be paid or credited, whether or not that person is the ultimate beneficiary of the amount. (bénéficiaire)
payment exchange
means an electronic system that facilitates the exchange of payment messages. (système d’échange de paiements)
payment message
means an electronic message that sets out an RTR payment obligation and is, or is to be, exchanged in a payment exchange. (message de paiement)
receiving participant
means the direct settlement participant or indirect settlement participant who, in an RTR payment message or in settlement instructions, is identified as the participant who is to receive the fixed amount set out in the RTR payment message or in those instructions. (participant destinataire)
RTR Clearing and Settlement
means the electronic system that is a component of the RTR system and in which RTR payment obligations are cleared and settled. (système de compensation et de règlement PTR)
RTR Exchange
means the payment exchange that is a component of the RTR system. (système d’échange PTR)
RTR payment message
means a payment message that is, or is to be, exchanged in the RTR Exchange. (message de paiement PTR)
RTR payment obligation
means the obligation of a participant to pay another participant a fixed amount in RTR Clearing and Settlement. (obligation de paiement PTR)
RTR system
means the real-time exchange, clearing and settlement system, also known as the Real-Time Rail, that is owned and operated by the Association. (système de PTR)
Rules
means the rules made by the Board respecting the RTR system. (règles)
sending participant
means a direct settlement participant or indirect settlement participant who, in an RTR payment message or in settlement instructions, is identified as the participant who is to pay the fixed amount set out in the RTR payment message or in those instructions. (participant expéditeur)
settlement account
means an account on the books of the Bank that a direct settlement participant has in RTR Clearing and Settlement and to which the Association makes entries respecting the clearing and settlement of RTR payment obligations. (compte de règlement)
settlement agent
means a direct settlement participant who is approved under section 16 to clear and settle RTR payment obligations in RTR Clearing and Settlement on behalf of indirect settlement participants. (agent de règlement)
settlement instructions
means information that sets out the details necessary for the clearing and settlement of an RTR payment obligation in RTR Clearing and Settlement and
  • (a) is generated by a payment exchange and sets out the RTR payment obligation from a payment message; or
  • (b) is generated by RTR Clearing and Settlement for a participant-to-participant transfer and sets out the RTR payment obligation. (instructions de règlement)
third-party exchange
means a payment exchange that, under an agreement with the Association, may submit settlement instructions to RTR Clearing and Settlement. (système d’échange externe)

Reference to settlement accounts

(2) For the purposes of paragraph 34(d), section 35, subsection 40(3) and paragraph 41(1)(a), a reference in the provision to the participant’s settlement account is to be read as a reference to the settlement account of its settlement agent if the participant is an indirect settlement participant.

General

Application

Application

2 (1) This By-law applies to the exchange of RTR payment messages and the clearing and settlement of RTR payment obligations in the RTR system.

Scope

(2) Each participant must comply with the provisions of this By-law and the Rules.

Responsibility for activities and functions

(3) If a participant enters into an agreement with another person for the performance of an activity or function required by this By-law or the Rules, the participant remains responsible for ensuring that the activity or function is carried out as required by this By-law and the Rules.

Locals

(4) Each participant who exchanges an RTR payment message on behalf of a local referred to in subparagraph 6(1)(a)(ii) of the Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System must ensure that the local complies with this By-law and the Rules as if it were a participant.

Limitation — rights, liabilities, duties and obligations

(5) Except as otherwise expressly provided in this By-law or the Rules, nothing in this By-law or the Rules

Association’s Responsibilities

Association responsible for the RTR system

3 (1) The Association must manage, operate and maintain the RTR system and ensure that it is capable of performing all activities and functions required by this By-law and the Rules.

Association responsible for service providers

(2) If the Association enters into an agreement with another person for the maintenance of the RTR system or for the performance of an activity or function required by this By-law or the Rules, the Association remains responsible for ensuring that the RTR system is capable of performing all activities and functions as required by this By-law and the Rules.

Exclusion of Liability

Association and Bank

4 Neither the Association nor the Bank, including their respective directors, officers and employees, is liable for any loss or damage suffered by a member as a result of anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that are intended or authorized to be executed or performed under this By-law or the Rules.

Participation in the RTR System

Participants

Application

5 (1) A member may, in the form and manner set out in the Rules, make an application to the President to participate in the RTR system as a direct settlement participant or as an indirect settlement participant.

Approval criteria

(2) The President must approve the application if the member demonstrates that

Participation — direct settlement participant

6 A direct settlement participant who is not subject to a suspension under any of sections 9 to 11 may

Participation — indirect settlement participant

7 An indirect settlement participant who is not subject to a suspension under any of sections 9 to 11 may

Tests before first RTR payment message

8 Before sending its first RTR payment message, a participant must, by successfully completing the system tests set out in the Rules, demonstrate its ability to send RTR payment messages.

Suspension

Suspension — access to settlement account

9 The President must suspend a direct settlement participant’s permission to participate in the RTR system if the Bank notifies the President that the participant no longer has access to its settlement account.

Suspension — other

10 (1) The President may suspend a participant’s permission to participate in the RTR system if

Prior notice to Bank

(2) Before making a suspension, the President must provide the Bank with notice of the intention to make the suspension.

Suspension — exceptional circumstances

11 (1) If an agent of His Majesty in right of Canada, an agent or mandatary of His Majesty in right of a province, a regulator or a supervisory body takes control of a participant or any of its assets or makes a declaration that a participant is considered to be no longer viable or that a participant is unable to meet its liabilities as they become due, the President may, after being advised of such an action having been taken or such a declaration having been made and with the concurrence of the Minister and the Governor of the Bank, suspend the participant’s permission to participate in the RTR system if its further participation could adversely affect the efficiency, safety or soundness of the RTR system.

Reinstatement

(2) The President may reinstate the participant’s permission to participate in the RTR system if, with the concurrence of the Minister and the Governor of the Bank, the President determines that the participant’s further participation in the RTR system will not adversely affect the efficiency, safety or soundness of the RTR system.

Notice to participants

12 After making a suspension under any of sections 9 to 11, the President must

Revocation

Revocation by Board

13 (1) The Board may revoke a member’s approval to be a participant in the RTR system if

Prior notice to Bank

(2) Before making a revocation, the Board must provide the Bank with notice of the intention to make the revocation.

Notice by President

(3) After the Board makes a revocation, the President must

Reinstatement

Application

14 (1) A participant whose permission to participate in the RTR system is suspended under section 9 or 10 or a member whose approval to be a participant in the RTR system is revoked under section 13 may, in the form and manner set out in the Rules, make an application to the President to have that permission or approval reinstated.

Reinstatement

(2) The President must reinstate the permission or approval if the application demonstrates that the circumstances giving rise to the suspension or revocation no longer exist.

Withdrawal

Notice of withdrawal

15 A participant may cease to be a participant in the RTR system by providing a notice of withdrawal to the President in the form and manner set out in the Rules.

Settlement Agents

Application to be a Settlement Agent

Application

16 (1) A direct settlement participant who is not subject to a suspension under any of sections 9 to 11 may, in the form and manner set out in the Rules, make an application to the President for approval to clear and settle RTR payment obligations in RTR Clearing and Settlement on behalf of indirect settlement participants.

Approval criteria

(2) The President must approve the application if the direct settlement participant demonstrates that

Suspension of Approval

Suspension — access to settlement account

17 The President must suspend an approval provided under section 16 if the Bank notifies the President that the direct settlement participant no longer has access to the settlement account referred to in paragraph 16(2)(a).

Suspension — other

18 (1) The President may suspend an approval provided under section 16 if the direct settlement participant

Prior notice to Bank

(2) Before making a suspension, the President must provide the Bank with notice of the intention to make the suspension.

Notice to participants

19 After making a suspension under section 17 or 18, the President must

Revocation of Approval

Revocation by Board

20 (1) The Board may revoke an approval provided under section 16 if the direct settlement participant

Prior notice to Bank

(2) Before making a revocation, the Board must provide the Bank with notice of the intention to make the revocation.

Notice by President

(3) After the Board makes a revocation, the President must

Reinstatement of Approval

Application

21 (1) A direct settlement participant whose approval under section 16 is suspended under section 17 or 18 or revoked under section 20 may, in the form and manner set out in the Rules, make an application to the President to have that approval reinstated.

Reinstatement

(2) The President must reinstate the approval if the application demonstrates that the circumstances giving rise to the suspension or revocation no longer exist.

Designation

Designation of settlement agents

22 (1) Subject to subsection (6), an indirect settlement participant must, in accordance with the Rules, designate

Multiple designations

(2) A settlement agent may be designated in respect of more than one payment exchange referred to in subsection (1).

Identification of payment exchange

(3) The designation must identify each payment exchange in respect of which it is made.

Prior notice

(4) A settlement agent must, for each payment exchange in respect of which the designation is made, provide written notice to the Association, in the form and manner set out in the Rules, before acting for the first time on behalf of the indirect settlement participant in respect of the payment exchange.

New designation required

(5) The indirect settlement participant must designate a new settlement agent for a payment exchange if

Termination under section 25

(6) In the case where notice to terminate the current settlement agent’s designation is provided under subsection 25(1) and a new settlement agent must be designated in accordance with subsection (5), designation of the new settlement agent must be made before the day on which the current settlement agent’s designation is terminated.

Identified payment exchanges

23 A settlement agent may only act on behalf of an indirect settlement participant in relation to a payment exchange identified by the indirect settlement participant in its designation made under section 22.

Termination of Designations After Suspension or Revocation

Termination

24 (1) All designations made under section 22 in respect of a settlement agent are terminated if the settlement agent is, in its capacity as a direct settlement participant or a settlement agent, subject to

When termination occurs

(2) The designations are terminated at the time at which the suspension or revocation is made.

Settlement agent — effect of termination

(3) A settlement agent must not act on behalf of an indirect settlement participant after its designations are terminated under this section.

Termination After Prior Notice

Termination

25 (1) An indirect settlement participant or settlement agent who wishes to terminate a designation made under section 22 must, in accordance with the Rules, provide written notice that the designation is to be terminated to the Association and the indirect settlement participant or settlement agent, as the case may be.

When termination occurs

(2) The designation is terminated on the earlier of

Settlement agent must continue to act

26 (1) Subject to subsections (2) and (3), a settlement agent must continue to act on behalf of the indirect settlement participant until the day on which its designation is terminated under section 25.

Exceptions

(2) Subject to subsection 39.15(3.1) of the Canada Deposit Insurance Corporation Act, a settlement agent may immediately cease to act on behalf of an indirect settlement participant if

Exception

(3) A settlement agent must immediately cease to act on behalf of an indirect settlement participant during any period of time that the indirect settlement participant is subject to a suspension under any of sections 9 to 11 or to a revocation under section 13.

Clearing and Settlement

General

Payment items

27 For the purpose of the definition payment item in subsection 2(1) of the Act, the classes of payment items are the following:

Settlement accounts

28 (1) The Association must operate, on behalf of the Bank, one settlement account in RTR Clearing and Settlement for each direct settlement participant.

Procedures

(2) Each settlement account must be operated in accordance with the procedures set out in the Rules.

RTR Exchange Processes

Sending RTR payment messages

29 A participant may send RTR payment messages only in the form and manner set out in the Rules.

Irrevocable

30 An RTR payment message cannot be amended or revoked after it is sent to the RTR Exchange.

Acceptance by RTR Exchange

31 The RTR Exchange must accept an RTR payment message if

Actions required after acceptance

32 (1) Immediately after accepting an RTR payment message, the RTR Exchange must

Ability to receive RTR payment message

(2) Except in the circumstances specified in the Rules, a participant must always be able to receive a RTR payment message referred to in paragraph (1)(b).

Notice to RTR Exchange

(3) Immediately after receiving the RTR payment message referred to in paragraph (1)(b), the receiving participant must, in accordance with the Rules, send the RTR Exchange a notice indicating whether or not it accepts the payment set out in the message.

Clearing

General

Irrevocable

33 Settlement instructions are irrevocable once they are generated by or submitted to RTR Clearing and Settlement.

Acceptance for clearing and settlement

34 Settlement instructions that are submitted to RTR Clearing and Settlement by a payment exchange must be accepted for clearing and settlement if

Reservation of funds

35 (1) Immediately after RTR Clearing and Settlement accepts settlement instructions for clearing and settlement, the Association must reserve, in the sending participant’s settlement account, an amount of funds that is equal to the amount necessary to clear and settle the RTR payment obligation if the settlement instructions contain an instruction to reserve the funds.

Entries

(2) For the purpose of subsection (1), the amount is reserved in the sending participant’s settlement account when the Association makes the entries to the account required by the Rules.

Use of reserved funds

(3) Subject to subsection 40(2), funds that are reserved under subsection (1) must only be used to settle the RTR payment obligation, regardless of any claim or interest in — or, in Quebec, any right to — those funds that any person other than the sending participant may have.

Notice to payment exchange

(4) RTR Clearing and Settlement must send to the payment exchange that submitted the settlement instructions a notice indicating whether or not the funds have been reserved.

RTR Exchange

Payment outcome report

36 (1) The RTR Exchange must, in accordance with the Rules, send the sending participant and the receiving participant a payment outcome report that indicates whether or not the RTR payment obligation will be settled.

Positive payment outcome report

(2) If the following conditions are met, the payment outcome report must indicate that the RTR payment obligation will be settled:

Direction to implement

37 The RTR Exchange must submit a direction to RTR Clearing and Settlement to implement the settlement instructions if the conditions referred to in subsection 36(2) are met.

Participant-to-Participant Transfers

Direction

38 A direct settlement participant who seeks to effect a participant-to-participant transfer must submit, in accordance with the Rules, a direction to RTR Clearing and Settlement to effect the transfer.

Settlement instructions

39 RTR Clearing and Settlement must generate the settlement instructions for the participant-to-participant transfer directed under section 38 if the direction is submitted in accordance with the Rules.

Settlement

Settlement required

40 (1) The Association must settle an RTR payment obligation if the associated settlement instructions were

Release of reserved funds

(2) If the Association is not required to settle the RTR payment obligation under subsection (1), it must release all funds that have been reserved in respect of that payment obligation under section 35.

Entries

(3) For the purpose of subsection (2), the amount is released in the sending participant’s settlement account when the Association makes the entries to the account required by the Rules.

Settlement effected

41 (1) For the purpose of this By-law, an RTR payment obligation is settled in RTR Clearing and Settlement when the Association

Final and irrevocable

(2) A transfer that is made in accordance with subsection (1) is final and irrevocable.

Notice of settlement

(3) If the settlement instructions associated with the RTR payment obligation were generated by the RTR exchange, the Association must, immediately after the obligation is settled, send the sending participant and the receiving participant a notice of settlement.

Payments to Payees

Scope

42 Sections 43 to 47 apply in respect of the payment of an amount to a payee as a result of the settlement of a RTR payment obligation that was set out in an RTR payment message.

Payment

43 (1) Subject to section 45, the receiving participant must, within the time limit set out in the Rules, make the amount of the payment available to the payee.

Making payment available to payee

(2) The amount of a payment is made available to a payee when the earliest of the following actions is taken:

Final and irrevocable

(3) Except in the circumstances specified in the Rules, a payment made under subsection (1) is final and irrevocable.

Payee identifier

44 (1) A receiving participant who receives a payment message in the RTR Exchange that identifies the payee both by name and an account number or other identifier specified in the Rules may rely on that account number or other identifier for the purpose of making the amount of the payment available to the payee.

Reliance on payee identifier

(2) A receiving participant who relies on an account number or other identifier for the purpose of making the amount of the payment available to the payee is deemed to have complied with section 43.

Exceptional circumstances

45 If any of the following exceptional circumstances exist, the receiving participant must comply with the procedures set out in the Rules for those circumstances instead of making the amount of the payment available to the payee:

Obligations to payee

46 The obligations of a receiving participant under sections 43 and 45 are to the payee and no obligation is owed by the receiving participant to the sending participant or any other person solely because of any of those sections.

Requirements not limited

47 The requirements set out in sections 43 and 45 must not be limited by the Rules or any agreement.

Emergencies

Emergency condition

48 If communications between the RTR system and a participant are interrupted, the ability of the RTR system to receive, send or otherwise process payment messages or to clear and settle RTR payment obligations is impaired, the safe and efficient operation of the RTR system is placed into question or any other emergency affects its operations, the President may, with prior notice to the Bank and in accordance with the procedures set out in the Rules,

Consequential Amendments

Canadian Payments Association By-law No. 6 — Compliance

49 (1) The definition clearing member in subsection 1(1) of the Canadian Payments Association By-law No. 6 — Compliance footnote 1 is replaced by the following:

clearing member
means a member that, on behalf of a non-member,
  • (a) exchanges payment items and effects clearing or makes entries into the Automated Clearing Settlement System as defined in section 1 of By-law No. 3; or
  • (b) exchanges payment items in the RTR system as defined in subsection 1(1) of By-law No. 10. (membre de compensation)

(2) Subsection 1(1) of the By-law is amended by adding the following in alphabetical order:

By-law No. 10
means Canadian Payments Association By-law No. 10 — RTR. (Règlement administratif n° 10)

(3) Subsection 1(3) of the By-law is replaced by the following:

Contravention by non-member

(3) For the purposes of this By-law, a non-member commits a contravention when the non-member fails to comply with a provision of the by-laws or rules in respect of which a clearing member is responsible for ensuring compliance by the non-member under By-law No. 3 or By-law No. 10.

Canadian Payments Association By-law No. 2 — Finance

50 (1) The definition participant in section 1 of the Canadian Payments Association By-law No. 2 — Finance footnote 2 is amended by adding the following after paragraph (b):

(2) The definition system in section 1 of the By-law is amended by striking out “or” at the end of paragraph (c) and by adding the following after paragraph (c):

Canadian Payments Association By-law No. 1 — General

51 (1) The definition direct participant in subsection 18(3) of the Canadian Payments Association By-law No. 1 — General footnote 3 is amended by striking out “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(2) Paragraph (d) of the definition direct participant in subsection 18(3) of the By-law is amended by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

Coming into Force

August 24, 2026 or registration

52 This By-law comes into force on August 24, 2026, but if it is registered after that day, it comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the By-law.)

Issues

A new Canadian Payments Association by-law is required for the planned introduction of the Real-Time Rail, a real-time payment exchange, clearing and settlement system (the RTR system or RTR).

Background

The Canadian Payments Association (doing business as Payments Canada) is a statutory corporation with a mandate to establish and operate national systems for the clearing and settlement of payments and other arrangements for the making or exchange of payments. The Canadian Payments Act (the Act) established Payments Canada and it establishes its mandate and duty, its governance structure, and membership eligibility criteria. The Act also allows the Board of Directors to make any by-laws and rules that it considers advisable for the attainment of Payments Canada’s mandate, including by-laws and rules respecting the exchange, clearing and settlement of payment items.

Payments Canada currently operates the national payment clearing and settlement systems Lynx and the Automated Clearing Settlement System (ACSS). Lynx is a real-time gross settlement system that enables participating Payments Canada members to send and receive time sensitive or large value payments (sometimes referred to as “wire payments”) securely on business days, with payment settlement occurring on an individual gross basis. The ACSS is a batch deferred net settlement system that is used by participating Payments Canada members for the efficient clearing and settlement of day-to-day retail transactions, on business days, including cheques, direct deposits, bill payments and pre-authorized debits. These payment systems play a critical role in Canada’s economy, and have been designated by the Bank of Canada under the Payment Clearing and Settlement Act as systemically important and prominent payment systems, respectively. In 2025, together these systems cleared and settled $103 trillion, more than $411 billion every business day.

The RTR system will also be operated by Payments Canada. Unlike Lynx and the ACSS, the RTR will enable the exchange, clearing and settlement of payments within seconds, 24 hours a day, seven days a week, empowering participating Payments Canada members and their clients to send payments quickly and with certainty that the payments will settle in real time at any time. The RTR will also provide a platform for innovation, supporting modern payments use cases and allowing Canadian consumers and businesses to make real-time payments that are “data-rich” (that is, additional information — such as invoices or remittance details — can be included in the RTR payment message to support better tracking and automated reconciliation).

The RTR system consists of two main components: the RTR Exchange and RTR Clearing and Settlement. The RTR Exchange will facilitate the real-time exchange of RTR payment messages between RTR participants.

The RTR Clearing and Settlement component will perform the clearing and settlement of transactions between RTR participants using RTR settlement accounts held at the Bank of Canada that are funded through cash deposits. The RTR Clearing and Settlement component will also support the settlement of payment messages exchanged through third-party exchanges where these exchanges have entered into the appropriate agreements with Payments Canada.

As a designated system under the Payment Clearing and Settlement Act, the RTR system will be subject to the Bank of Canada’s Risk Management Standards for Prominent Payment Systems. The RTR access model, financial risk framework, legal framework, governance, comprehensive management of risks, design and operations have been developed with the Bank of Canada, Payments Canada members, and industry stakeholders ensuring regulatory compliance, a safe and efficient approach to exchange, clearing and settlement, and appropriate governance and risk mitigation. Foundational elements of the legal and financial framework are reflected in the by-law, including

Objective

The purpose of the Canadian Payments Association By-law No. 10 - RTR (RTR by-law) is to ensure that the RTR, as a new exchange, clearing, and settlement system, has a well founded, transparent and enforceable legal basis. The by-law has been drafted to ensure the new system will operate in a safe, sound and efficient manner that meets the Bank of Canada’s Risk Management Standards for Prominent Payment Systems. Finally, the RTR by-law articulates the key rights and responsibilities for RTR system participants in their interactions with each other, their service providers, and payees.

Description

The RTR by-law reflects the RTR’s financial risk framework, key operational requirements, and policy requirements governing how the system operates. These policy requirements include, for example, the provision of payment amounts to payees and participant obligations in processing payments. The by-law also refers to the RTR rules, which will provide detailed technical and business process requirements for participants. The main elements of the by-law are summarized below.

General

The RTR by-law focuses on Payments Canada’s operation of the RTR system and the rights and responsibilities of system participants. The by-law clarifies that the by-law is not intended to affect the legal rights and responsibilities of any person, nor to impose duties, liabilities, or obligations on participants or Payments Canada toward other persons except as expressly provided. The exclusion of liability for Payments Canada from loss or damage suffered by a Payments Canada member is similar to those in Payments Canada’s by-laws for the ACSS and Lynx. As certain functions in the RTR are performed by Payments Canada on behalf of the Bank of Canada, the exclusion of liability also applies to the Bank of Canada, its directors, officers and employees.

Participation in the RTR System

The RTR by-law establishes the general eligibility criteria for RTR participation. Participation is voluntary and any Payments Canada member is eligible to become an RTR participant if it meets the requirements set out in the RTR by-law and rules.

All RTR participants are permitted to send RTR payment messages in the RTR Exchange and are expected to receive and process these messages in accordance with the RTR by-law and rules. However, only participants that have established settlement accounts at the Bank of Canada can settle payments in RTR Clearing and Settlement. The by-law therefore reflects two forms of participation: direct settlement participants whose payments (RTR payment obligations) are cleared and settled through their own settlement account, and indirect settlement participants whose RTR payment obligations are cleared and settled through the settlement account of a direct settlement participant. Direct settlement participants that have been approved to support the settlement of indirect settlement participants’ payments are called settlement agents.

The RTR by-law establishes that failure to comply with the participation requirements under the by-law and rules — and certain other exceptional circumstances — may result in suspension or revocation of a participant’s permission to participate and/or to act as a settlement agent. Reinstatement from suspension, revocation of permission to participate, and optional withdrawal by a participant are also addressed in the RTR by-law. Suspensions resulting from exceptional circumstances (for example, where Payments Canada is advised that a regulator has declared a participant non-viable) may only occur with the concurrence of the Minister of Finance and the Governor of the Bank of Canada, and only if the participant’s further participation could adversely affect the efficiency, safety, or soundness of the RTR system.

Clearing and Settlement

The RTR by-law establishes the classes of payment items acceptable for exchange, clearing, and settlement in the RTR. It also sets out the circumstances in which a payment will be cleared and settled in the RTR, key steps, and certain rights and obligations of participants related to the clearing and settlement process.

Clearing in the RTR occurs when the system validates a payment message’s key data elements and checks that necessary conditions for settlement are satisfied (such as sufficiency of funds in the sending participant’s settlement account). Settlement in RTR Clearing and Settlement will occur when the settlement account of the participant sending the payment (or its settlement agent) is debited, and the settlement account of the receiving participant (or its settlement agent) is credited in the amount of the payment. The RTR by-law is clear that settlement occurs on the books of the Bank of Canada and is final and irrevocable between RTR participants.

The RTR by-law accommodates the potential clearing and settlement of payments by RTR participants sent through payment exchanges operated by third parties, provided these third-party exchanges have entered into agreements with Payments Canada. This will enable certain benefits from the financial risk and liquidity management aspects of RTR Clearing and Settlement to extend into the broader retail payments ecosystem.

Payments to the payee

The RTR by-law requires a receiving participant to make the amount of an RTR payment available to the payee (e.g. an individual customer) according to the time frames and procedures established in the rules, except under certain circumstances. Under the exceptional circumstances described in section 45 of the RTR by-law, a receiving participant is not required to make the amount of a payment available to the payee in the usual manner, but instead must follow the procedures outlined in the RTR rules. For example, if a receiving participant cannot make the amount of a payment available within the normal time frame due to an issue that is directly impacting its operating systems, it must instead make the payment available as soon as reasonably practicable.

All payments that have been made available to the payee are final and irrevocable, except for circumstances prescribed in the RTR rules. These circumstances include situations where a processing error has occurred or the original payment was the result of fraud.

Emergencies

The RTR by-law contemplates the possibility that the RTR, or a participant’s use of the RTR, may be disrupted. The by-law allows the President of Payments Canada to take a variety of actions to respond to disruptions or other emergencies. In conjunction with the RTR rules, the emergency provisions in the by-law will enable Payments Canada, working with the Bank of Canada and system participants, to safely and effectively respond to potential disruptions.

Consequential amendments to other Canadian Payments Association by-laws

To support the implementation of the RTR, the RTR by-law includes the following consequential amendments to other Payments Canada by-laws:

These amendments will come into force at the same time as the new RTR by-law.

Regulatory development

Consultation

Payments Canada consulted extensively with its members, external stakeholders and regulators in support of the RTR’s system design, policy framework and by-laws and rules.

In fall 2020, Payments Canada conducted the first public consultation by publishing a consultation paper and soliciting feedback from the industry and public on critical public policy proposals, focusing on system access, payment processes, payment finality, recourse, innovation, and competition. The consultation was enhanced through follow-up discussions with key stakeholder representatives, including consumer groups, business associations, FinTech groups, and a broad range of individual entities. Payments Canada members and key stakeholders were also consulted by way of Payments Canada’s advisory councils and committees (e.g. the Member Advisory Council and Stakeholder Advisory Council).

Feedback from the 2020 consultation indicated support for the RTR policy framework, highlighting that the legal framework for the RTR should continue to evolve after the initial release of the system as new processes, technology and standards are developed and refined. Feedback from the 2020 consultation was also incorporated in the draft RTR rules including the addition of foundational fraud policies which require RTR participants to establish internal fraud control standards and implement procedures outlining appropriate actions in response to fraud.

To support Payments Canada in the development of the by-law, the drafting instructions for the RTR by-law were subject to ongoing review by Payments Canada’s Legal and Policy Group — comprising operational, policy and legal subject matter experts from Payments Canada’s members, including the Bank of Canada. Payments Canada maintained regular contact with the Bank of Canada and the Department of Finance throughout the by-law’s development. Payments Canada also facilitated a draft by-law review with a range of stakeholders, including end-users and FinTech representatives.

In Spring 2025, Payments Canada conducted another public consultation on the draft RTR by-law, engaging stakeholders, and providing the draft RTR rules for context. As part of this process, Payments Canada also provided information on new and updated elements of the RTR, which included access policies, complaints handling elements, and additional fraud management requirements. Payments Canada also launched four bilingual RTR educational webinars on different topics (Payments Canada and the RTR, Access and Participation, Compliance and Recourse, and Fraud Management) to support broad public engagement on the legal framework. Payments Canada received 16 submissions through the consultation process and 1400 participants attended the RTR educational webinars.

Feedback from the 2025 consultation included broad industry support for the RTR and positive reviews on the Webinar Engagement. Feedback incorporated from the 2025 consultation included minor updates to the RTR draft rules such as changes to the definition and applicability of the requirement to be a member of a complaints body.

Indigenous engagement, consultation and modern treaty obligations

The RTR by-law has no impact on modern treaty obligations, and the launch of the Indigenous engagement and consultation process is not required.

Instrument choice

There are no instrument alternatives available for Payments Canada to implement the RTR framework. The RTR by-law establishes RTR payment messages and certain settlement instructions as payment items, in accordance with subsection 2(1) of the Act, which defines “payment item” as “an item within a class of items prescribed by by-law.” The RTR by-law is also the appropriate instrument to establish the fundamental features of the RTR system – including the system components and their interaction – and to set out foundational requirements related to system participation and the obligations of receiving participants in respect of payees. Consistent with the legal frameworks for Lynx and the ACSS, the rules for the RTR build on and supplement the RTR by-law.

Regulatory analysis

Benefits and costs

Benefits

Payments systems underpin almost all economic activity in Canada. Canadian businesses, consumers and financial institutions will benefit from the introduction of a new real-time payment system. The RTR will act as a platform for responsible innovation, enabling the introduction of new and enhanced payment products and experiences.

Specifically, launching a real-time payment system in Canada will

Overall, all Canadians will benefit from the stable, efficient and safe movement of their funds, while ensuring responsible competition.

Costs

Payments Canada members who intend to participate in the RTR have reported that costs to prepare for participation will vary depending on institutional size, technical readiness, and scope of participation. Estimated implementation costs may range from less than $5 million for smaller participants to $150 million for larger participants. These costs include investments in dedicated hardware and software, system development and implementation, minimum staff requirements and reporting requirements. These costs do not include any costs associated with future enhancements.

Small business lens

Analysis under the small business lens concluded that the proposed regulation will not impact Canadian small businesses. Only Payments Canada members will be eligible to become RTR participants, and none meets the definition of “small business” in the Policy on Limiting Regulatory Burden on Business, specifically fewer than 100 employees or less than $5 million in annual national revenues.

One-for-one rule

The one-for-one rule applies, as the by-law introduces new administrative costs on businesses in subsections 22(4) and 25(1) of the RTR by-law. Section 22(4) requires settlement agents to provide written notice to Payments Canada, in the form and manner set out in the Rules, before acting for the first time on behalf of an indirect settlement participant in respect of a payment exchange. Section 25(1) requires an indirect settlement participant or settlement agent to provide written notice to Payments Canada and the relevant party when terminating a designation.

Compliance with these requirements involves preparing and submitting written notices and retaining related documentation. Based on consultations, the total annual administrative cost for participants conducting these activities is estimated to be $882 (stated in 2012 dollars and discounted to 2012 at 7% annually as prescribed in the Red Tape Reduction Regulations).

Regulatory cooperation and alignment

Payments Canada considered domestic and international approaches to real-time payments systems in developing the RTR by-law. The RTR framework is broadly aligned with international best practices, including ISO 20022 messaging standards. A Canada-specific approach is required to ensure consistency with the Canadian legislative environment. Payments Canada engaged regularly with the Bank of Canada and the Department of Finance and no formal regulatory arrangements with other jurisdictions were established.

International obligations

The RTR by-law is not related to any international commitments or obligations concerning regulatory cooperation or alignment.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

No impacts based on gender and other identity factors have been identified. Implementation, compliance and enforcement, and service standards.

Implementation, compliance and enforcement, and service standards

The RTR by-law will come into force on August 24, 2026, or, if registered after this date, the date the by-law is registered. Payments Canada is responsible for ensuring that its members comply with the RTR by-law. Compliance and enforcement will be carried out through Payments Canada’s existing compliance framework, including application of the Canadian Payments Association By-law No. 6 — Compliance. The creation of the RTR by-law does not require any new mechanisms to ensure compliance and enforcement.

Contact

Sara Supple
Director, Legal Affairs and Senior Legal Counsel
Payments Canada
Constitution Square, Tower II
350 Albert Street, Suite 800
Ottawa, Ontario
K1R 1A4
Email: info@payments.ca