📋 Tender Overview
Bank of Canada Governor Tiff Macklem has designated Lynx which is owned and operated by Payments Canada as a systemically important payment system under the Payment Clearing and Settlement Act. Given how important Lynx is as Canadas wholesale payment system a disruption or failure of this system could significantly and adversely affect the financial system and economy. This designation brings Lynx under formal Bank oversight.As part of Canadas payments modernization efforts Lynx replaces the Large Value Transfer System LVTS. It inherits the operational functions toreinforce the Banks policy interest rateprovide a means for settling obligations from other financial market infrastructures FMIschannel liquidity from the Bank to financial institutions in times of crisisPayment systems under Bank oversight must comply with the CPMI-IOSCO Principles for Financial Market Infrastructures issued by the Bank for International Settlements Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions. The principles ensure risks in the system are adequately monitored and controlled. Designation provides legal protection regarding payment finality. It also places Lynx under the Banks resolution regime ensuring continued operations in the unlikely but plausible event that the payment system becomes non-viable.Additional informationUnder the Payment Clearing and Settlement Act the Bank has formal responsibility for the designation and oversight of clearing and settlement systems also known as FMIs that could pose a systemic or payments system risk.Currently five systemically important FMIs and two prominent payment systems including Lynx are subject to the Banks oversight.Systemically important FMIs are FMIs that have the potential to pose a risk to Canadas financial system. If one participant is unable to meet its obligations to an FMI that could transmit financial problems through the FMI and cause other participants to be unable to meet their obligations.Prominent payment systems have the potential to pose risks to Canadian economic activity through a disruption or failure that could affect public confidence in the overall Canadian payments system.For more information on how the Bank identifies systemically important FMIs and how designation protects them against risk see the Guideline Related to Bank of Canada Oversight Activities Under the Payment Clearing and Settlement Act.
