Ottawa, Canada – The Canadian Securities Administrators (CSA) have announced rule amendments that support the transition to a shorter settlement cycle for equity and long-term debt market trades. These changes, effective today, align Canada’s settlement cycle with the industry’s shift from two days after the date of a trade (T+2) to one day (T+1).
The amendments to National Instrument 24-101 Institutional Trade Matching and Settlement mirror the upcoming regulatory changes in the United States, set to take effect on May 28, 2024, one day after Canada’s implementation.
National Instrument 24-101 establishes a framework to ensure the efficient and timely settlement of institutional trades (equity and debt) by registered dealers and advisers, known as Registered Firms. The instrument mandates that these firms create, maintain, and enforce policies and procedures to meet the new T+1 matching threshold for institutional trades.
The CSA, a council of securities regulators from Canada’s provinces and territories, is dedicated to coordinating and harmonizing regulation for the Canadian capital markets. This move to a T+1 settlement cycle aims to enhance market efficiency and reduce risk in the trading process.