Thank you, Mr. Chair.
Clause 126 would amend the Canada Deposit Insurance Corporation Act, in particular the stay of proceedings provisions of the act. These stays can be imposed when an institution has failed and is under the resolution provisions of the act.
The clause has a couple of components. One of them deals with stays that would apply to certain shares and liabilities that can be converted into equity on the resolution. Another element would apply to certain eligible financial contracts. These are typically known as “derivatives”. The amendment would exclude the application of the stay provisions of the act to eligible financial contracts—EFCs—entered into between the member institution and sovereign entities and central banks.
As well, there's a provision in there that would enable the CDIC to make bylaws to require that certain clauses be included in the eligible financial contracts of its member institutions. That's clause 126.