CSA Staff Notice 24-319 Regarding
National Instrument 24-101 Institutional Trade Matching and Settlement – Update and Staff Recommendation
August 10, 2023
Introduction
On December 15, 2022, the Canadian Securities Administrators (CSA) published for comment proposed amendments (the 2022 Proposed Amendments) to National Instrument 24-101 Institutional Trade Matching and Settlement (NI 24-101). This Notice contains CSA Staff’s (Staff or we) views regarding changes to the 2022 Proposed Amendments based on industry feedback. Staff intend to recommend that our respective decision-makers adopt[1] a revised version of the 2022 Proposed Amendments that would include a trade-matching deadline of 3:59 a.m. Eastern Time on the day after the trade (T+1) (rather than a trade-matching deadline of 9 p.m. Eastern Time on the date a trade is made as was published in the 2022 Proposed Amendments).
Background
NI 24-101 provides a framework for ensuring efficient and timely settlement of the processing of institutional trades (equity and debt) by registered dealers and advisers (Registered Firms). NI 24-101 has a number of requirements including that Registered Firms are required to establish, maintain and enforce policies and procedures designed to achieve the matching threshold of institutional trades.
The 2022 Proposed Amendments are intended to align with the shortening of the standard settlement cycle for equity and long-term debt market trades in Canada from two days after the date of a trade (T+2) to T +1, and to coincide, as much as possible, with parallel changes in the United States.
The Notice that accompanied the 2022 Proposed Amendments asked for feedback on the most appropriate trade-matching deadline to achieve settlement on T+1.[2]
Purpose of this Notice
In public comments on the 2022 Proposed Amendments, we received feedback indicating that participants favored a trade matching deadline of 3:59 a.m. on T+1. Staff are supportive of this change to the 2022 Proposed Amendments.
In other, more recent communications, the Canadian Capital Markets Association (CCMA), which is leading industry coordination efforts in Canada, expressed concerns about the trade-matching deadline published in the 2022 Proposed Amendments and the need to know the trade-matching deadline as soon as possible in order to make the necessary preparations, including information technology systems changes and testing, for the T+1 transition.
In response to this feedback, Staff are publishing this Notice to update industry about our recommendation regarding the trade matching deadline to help firms with their preparations for the transition to T+1. The amendments recommended by Staff, if approved by our respective decision-makers[3], are expected to come into force on a date that is aligned with Canada’s industry move to a T+1 settlement cycle, currently expected to be May 27, 2024.
Questions
If you have questions, please contact any of the following:
Ontario Securities Commission
Aaron Ferguson
Manager, Market Regulation
Tel: 416-593-3676
Email: aferguson@osc.gov.on.ca
Ontario Securities Commission
Jarrod Smith
Senior Accountant, Market Regulation
Tel: 416-263-3778
Email: jsmith@osc.gov.on.ca
Ontario Securities Commission
Stephanie Wakefield
Senior Legal Counsel, Market Regulation
Tel: 647-401-8397
Email: swakefield@osc.gov.on.ca
Autorité des marchés financiers
Dominique Martin,
Senior Director, Market Activities and Derivatives
Tel: 514-395-0337, ext. 4351
Email: dominique.martin@lautorite.qc.ca
Autorité des marchés financiers
Yasmine Garreau
Senior Policy Advisor - Oversight of Clearing Activities
Tel: 514-395-0337, ext. 4697
Email: yasmine.garreau@lautorite.qc.ca
Autorité des marchés financiers
Francis Coche
Analyst, Derivatives - Oversight of Clearing Activities
Tel: 514-395-0337, ext. 4343
Email: Francis.Coche@lautorite.qc.ca
Alberta Securities Commission
Harvey Steblyk
Senior Legal Counsel, Market Regulation
Tel: 403-297-2468
Email: harvey.steblyk@asc.ca
British Columbia Securities Commission
Michael Grecoff,
Securities Market Specialist, Capital Markets Regulation
Tel: 604-899-6864
Email: mgrecoff@bcsc.bc.ca
British Columbia Securities Commission
Navdeep Gill
Senior Legal Counsel, Legal Services, Capital Markets Regulation
Tel: 604-899-6970
Email: ngill@bcsc.bc.ca
Manitoba Securities Commission
Paula White
Deputy Director, Compliance and Oversight
Tel: 204-945-5195
Email: paula.white@gov.mb.ca
Financial and Consumer Affairs Authority of Saskatchewan
Liz Kutarna
Director, Capital Markets, Securities Division
Tel: 306-787-5871
Email: liz.kutarna@gov.sk.ca
Financial and Consumer Services Commission (New Brunswick)
Amelie McDonald
Legal Counsel
Tel: 506-635-2938
Email: amelie.mcdonald@fcnb.ca
Nova Scotia Securities Commission
Chris Pottie
Deputy Director, Registration & Compliance
Tel: 902-424-5393
Email: chris.pottie@novascotia.ca