Section 16 of the Financial Administration Act (Quebec) (FAA) empowers the Quebec Minister of Finance to enter into certain types of financial contracts. In 2011, the FAA was amended to add new section 16.1 permitting the Minister to pledge securities and security entitlements within the meaning of the Act respecting the transfer of securities and the establishment of security entitlements in connection with a transaction effected under section 16. Now, Bill 58, An Act to again amend various legislative provisions concerning mainly the financial sector, which has just been tabled, will amend section 16.1 to clarify that the pledge includes a "margin deposit, margin or settlement" and, in addition that, compensation (the civil law term for set-off) can be effected against the Quebec Crown in connection with the transaction. What this latter amendment will do is clarify that article 1672 of theCivil Code of Québec, which prohibits claiming compensation against the Quebec Crown, does not prevent netting under a transaction entered into under section 16 of the FAA. Finally, Bill 58 amends section 18 of the FAA to clarify that a close-out amount under a transaction is a charge against the Consolidated Revenue Fund.
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