THE MANITOBA SECURITIES COMMISSION MSC RULE 2010-9 (Section 149.1, The Securities Act) Amendments to National Instrument 24-101 Institutional Trade Matching and Settlement 1. National Instrument 24-101 Institutional Trade Matching and Settlement is amended by this Instrument. 2. Section 1.1 is amended by: a. replacing "authorized" in the definition of "clearing agency" with "recognized"; b. replacing the definition of "institutional investor" with the following: "institutional investor" means a client of a dealer that has been granted DAP/RAP trading privileges by the dealer; c. adding the definition "North American region" as follows: "North American region" means Canada, the United States, Mexico, Bermuda and the countries of Central America and the Caribbean; d. replacing paragraphs (a) and (b) of the definition "trade-matching party" with the following: (a) a registered adviser acting for the institutional investor in processing the trade, (b) if a registered adviser is not acting for the institutional investor in processing the trade, the institutional investor unless the institutional investor is (i) an individual, or (ii) a person or company with total securities under administration or management not exceeding $10 million, e. replacing the words "the day on which a trade is executed", wherever they occur in the definitions of "T+1", "T+2" and "T+3", with "T". 3. Paragraph 2.1(f) is amended by adding "in a security of a mutual fund" after "trade". 4. Section 3.1 is amended by: a. replacing in subsection (1) "the end of T" with "12 p.m. (noon) on T+1"; b. replacing subsection 3.1(2) with the following: 3.1(2) Despite subsection (1), the dealer may adapt its policies and procedures to permit matching to occur no later than 12 p.m. (noon) on T+2 for a DAP/RAP trade that results from an order to buy or sell securities received from an institutional investor whose investment decisions or settlement instructions are usually made in and communicated from a geographical region outside of the North American region.
- 2 -5. Section 3.2 is replaced by the following: Pre-DAP/RAP trade execution documentation requirement for dealers 3.2 A registered dealer shall not open an account to execute a DAP/RAP trade for an institutional investor or accept an order to execute a DAP/RAP trade for the account of an institutional investor unless its policies and procedures are designed to encourage each trade-matching party to (a) enter into a trade-matching agreement with the dealer, or (b) provide a trade-matching statement to the dealer. 6. Section 3.3 is amended by: a. replacing in subsection (1) "the end of T" with "12 p.m. (noon) on T+1"; b. replacing subsection (2) with the following: 3.3(2) Despite subsection (1), the adviser may adapt its policies and procedures to permit matching to occur no later than 12 p.m. (noon) on T+2 for a DAP/RAP trade that results from an order to buy or sell securities received from an institutional investor whose investment decisions or settlement instructions are usually made in and communicated from a geographical region outside of the North American region. 7. Section 3.4 is replaced by the following: Pre- DAP/RAP trade execution documentation requirement for advisers 3.4 A registered adviser shall not open an account to execute a DAP/RAP trade for an institutional investor or give an order to a dealer to execute a DAP/RAP trade for the account of an institutional investor unless its policies and procedures are designed to encourage each trade-matching party to (a) enter into a trade-matching agreement with the adviser, or (b) provide a trade-matching statement to the adviser. 8. Part 4 is replaced by the following: PART 4 – REPORTING BY REGISTERED FIRMS Exception reporting requirement 4.1 A registered firm shall deliver Form 24-101F1 to the securities regulatory authority no later than 45 days after the end of a calendar quarter if (a) less than 90 per cent of the DAP/RAP trades executed by or for the registered firm during the quarter matched within the time required in Part 3, or (b) the DAP/RAP trades executed by or for the registered firm during the quarter that matched within the time required in Part 3 represent less than 90 per cent of the aggregate value of the securities purchased and sold in those trades.
- 3 -9. Form 24-101F1 is amended by: (a) replacing item 3 under "REGISTERED FIRM IDENTIFICATION AND CONTACT INFORMATION:" with the following: 3a. Address of registered firm’s principal place of business: 3b. Indicate below the jurisdiction of your principal regulator within the meaning of National Instrument 31-103 Registration Requirements and Exemptions: Alberta British Columbia Manitoba New Brunswick Newfoundland & Labrador Northwest Territories Nova Scotia Nunavut Ontario Prince Edward Island Québec Saskatchewan Yukon 3c. Indicate below all jurisdictions in which you are registered: Alberta British Columbia Manitoba New Brunswick Newfoundland & Labrador Northwest Territories Nova Scotia Nunavut Ontario Prince Edward Island Québec Saskatchewan Yukon (b) replacing the portion of the Form after the heading "INSTRUCTIONS:" and before the heading "EXHIBITS" with the following: Deliver this form for both equity and debt DAP/RAP trades together with Exhibits A, B and C pursuant to section 4.1 of the Instrument, covering the calendar quarter indicated above, within 45 days of the end of the calendar quarter if (a) less than 90 per cent of the equity and/or debt DAP/RAP trades executed by or for you during the quarter matched within the time required in Part 3 of the Instrument, or (b) the equity and/or debt DAP/RAP trades executed by or for you during the quarter that matched within the time required in Part 3 of the Instrument represent less than 90 per cent of the aggregate value of the securities purchased and sold in those trades."
- 4 - (c) replacing the heading "EXHIBIT B – Reasons for non-compliance" with the following: Exhibit B – Reasons for not meeting exception reporting thresholds 10. Form 24-102F2 is amended by: (a) replacing the portion of the Form after the heading "Table 1 --- Equity trades:" and before the word "Legend" with the following: Entered into clearing agency by dealers # of Trades % $ Value Industr of y Trades T T+1 - noon T+1 T+2 T+3 >T+3 Total Table 2 — Debt trades: Entered into clearing agency by dealers # of Trades % $ Industr Value y of Trades T T+1 - noon T+1 T+2 T+3 >T+3 Total (b) replacing the portion of the Form after the heading "Exhibit B – Individual matched trade statistics" and before the heading "CERTIFICATE OF CLEARING AGENCY" with the following: Using the same format as Exhibit A above, provide the relevant information for each participant of the clearing agency in respect of client trades during the quarter that have been entered by the participant and matched within the timelines indicated in Exhibit A. Matched in clearing agency by custodians % # of % $ Value % Industry Trades Industry of Industry Trades Matched in clearing agency by custodians % # of % $ Value % Industry Trades Industry of Industry Trades
- 5 -11. Form 24-101F5 is amended by: (a) replacing the portion of the Form after the heading "Table 1 --- Equity trades:" and before the word "Legend" with the following: Entered into matching service utility by dealer-users/subscribers # of Trades % $ Value Industr of y Trades T T+1 - noon T+1 T+2 T+3 >T+3 Total Table 2 — Debt trades: Entered into matching service utility by dealer-users/subscribers # of % $ Value Trades Industr of y Trades T T+1 - noon T+1 T+2 T+3 >T+3 Total (b) replacing the portion of the Form after the heading "Exhibit D – Individual matched trade statistics" and before the heading "CERTIFICATE OF MATCHING SERVICE UTILITY" with the following: Using the same format as Exhibit C above, provide the relevant information for each user or subscriber in respect of trades during the quarter that have been entered by the user or subscriber and matched within the timelines indicated in Exhibit C. 12. This Instrument comes into force on July 1, 2010 13. This Instrument may be cited as MSC Rule 2010-9. Matched in matching service utility by other users/subscribers % # of % $ Value % Industry Trades Industry of Industry Trades Matched in matching service utility by other users/subscribers % # of % $ Value % Industry Trades Industry of Industry Trades
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