Canada Welcomes T+2 Settlement

September 6, 2017

Effective September 5, 2017, the standard settlement timeframe for certain securities has been shortened to trade date plus two days (T+2) from trade date plus three days (T+3). The Canadian transition to a shorter settlement cycle is being made concurrently with the move to T+2 in the United States and will effect equity and long-term debt market trades in Canada.

As previously discussed, earlier this year the Canadian Securities Administrators adopted amendments to National Instrument 24-101 Institutional Trade matching and Settlement to reflect the new shorter settlement cycle. In Ontario, ministerial approval of the NI 24-101 amendments was granted on June 26, 2017. Similarly, both the Investment Industry Regulatory Organization of Canada (IIROC) and the Toronto Stock Exchange (TSX) adopted amendments to IIROC’s Universal Market Integrity Rules (UMIR), Dealer Member Rules (DMR) and Form 1, and the TSX Company Manual, respectively, to provide for the T+2 cycle, as previously discussed here and here.

As trades in securities of conventional mutual funds are not subject to NI 24-101, on August 31, 2017, the CSA published a notice announcing that the CSA (other than the British Columbia Securities Commission and the Financial and Consumer Affairs Authority of Saskatchewan) have adopted amendments to National Instrument 81-102 Investment Funds and National Instrument 81-104 Commodity Pools to shorten the standard settlement cycle for conventional mutual funds to T+2. The amendments substantially reflect those published for comment on April 27, 2017 and discussed here. Provided all necessary government ministerial approvals are obtained, such amendments are expected to come into force on November 14, 2017.

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