Thursday May 11 2017

News Source: Global Exchanges

Focus: Other

Type: General




On 27th April 2017, the Canadian Securities Administrators (CSA), representing the 13 provincial and territorial securities regulatory authorities, released the much-awaited information advancing the move to T+2, including the following documents:

  • Final rule amendments to National Instrument 24-101 Institutional Trade Matching and Settlement and its companion policy
  • A consultation document with interim guidance in the form of a Notice and Request for Comment: Adoption of a T+2 Settlement Cycle for Conventional Mutual Funds, along with proposed amendments to National Instrument 81-102 Investment Funds (NI 81-102) and National Instrument 81-104 Commodity Pools (NI 81-104).

Final NI 24-101 rule amendments

The final rules retain the current ‘noon on T+1’ institutional trade matching deadline and the exception reporting threshold of 90%. The amendments will:

  • Eliminate the noon on T+2 matching deadline for trades initiated by parties whose investment decisions or settlement instructions originate outside North America – all trades must be matched by noon on T+1, or reported if the matching threshold at that time does not equal or exceed 90%.
  • Require exchange-traded funds (ETFs) currently settling on T+3 to move to T+2, and to be included in T+2 exception Form 24-101 reports (in the equity category) if the 90% threshold is not achieved.
  • Confirm the September 5, 2017 implementation date, with the practical provision of a possible later implementation date being announced by way of a notice only (rather than the more intensive rule-making process) should, for example, the U.S. extend the T+2 implementation date.
  • Provide transitional exception reporting relief for firms so that filing under the old rules can continue for the full calendar quarter ending September 30, 2017, i.e., the matching percentage can include non-North-American trades matched until noon on T+2, or any later quarter if the implementation date is postponed.

The remaining NI 24-101 amendments include an updated definition of “clearing agency” and changes for clarity and consistency unrelated to T+2 (e.g., changing “shall” to “must”, adding Eastern Time to time references, changing upper to lower case). Proposed matching service utility (MSU) rule changes – to make MSU systems and business continuity requirements consistent with those already applying to clearing agencies, marketplaces, information processors, and trade repositories – were not approved.

The notice accompanying the final rules referenced industry requests for CSA guidance regarding the adoption of a T+2 settlement cycle by conventional mutual funds.

Click on the above link for more information.