Under the Retail Payment Activities Act, payment service providers registered with the Bank of Canada must demonstrate how they manage their operational risks, respond to incidents, safeguard end-user funds, and notify the Bank of Canada of certain incidents and significant changes. This requirement comes into effect on September 8, 2025.
The Bank of Canada has drafted new supervisory guidelines (Guidelines) to help payment service providers understand their obligations and is inviting stakeholders to comment on them. The Bank of Canada is especially interested in feedback on aspects of the Guidelines that could either be clarified or challenging to implement. The deadline for comments is May 21, 2024.
The guidelines are:
- Operational risk and incident response: This supervisory guideline is intended to help payment service providers that are subject to the Retail Payment Activities Act meet their obligations related to operational risk management and incident response.
- Incident notification: This supervisory guideline explains the requirements on incident reporting under the Retail Payment Activities Act and provides clarity, when appropriate, on how the Bank expects payment service providers to comply with those regulatory requirements.
- Safeguarding end-user funds: This supervisory guideline is intended to help payment service providers that are subject to the Retail Payment Activities Act meet their obligations related to safeguarding end-user funds.
- Notice of significant change or new activity: Under the Retail Payment Activities Act, payment service providers are required to notify the Bank before they make a significant change to the way they perform their retail payment activities or before they perform a new retail payment activity.
The new supervisory guidelines are available for download and review from the website of the Bank of Canada.
The Retail Payments Activities Act is available for download from the website of the Government of Canada.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.
