T+2 Settlement Comes to Canada

May 4, 2017

Transition to a shorter settlement cycle for equity and long-term debt market trades is expected to occur in Canada on September 5, 2017. The standard settlement cycle for such trades will be shortened from three days after the date of a trade (T+3) to two days after the date of a trade (T+2) pursuant to amendments to National Instrument 24-101 Institutional Trade Matching and Settlement adopted by the Canadian Securities Administrators on April 27, 2017. The timing of the transition will coincide with the date markets in the United States are expected to move to a T+2 settlement cycle. 

What Will Change?

The following amendments to NI 24-101 will apply to registered dealers and advisers, clearing agencies and matching service utilities:

  • References to T+3 in NI 24-101 will either be removed entirely or, where applicable, replaced with references to T+2.
  • Provisions of NI 24-101 relating to non-North American trades will be repealed, as they are no longer seen to be appropriate in a standard T+2 settlement environment. Parties will need to match earlier on T+1 regardless of the cross-border nature of the trade.
  • NI 24-101 will be amended to clarify that it does not apply to a purchase or redemption of an investment fund governed by Parts 9 or 10 of National Instrument 81-102 Investment Funds, and to clarify that DAP/RAP trades in exchange traded fund (ETF) securities are to be included in the exception reports under Form 24-101F1 by registered firms as “equity” and not “debt” DAP/RAP trades. As ETFs are mutual funds subject to NI 81-102, ETF securities bought and sold like other stock on secondary markets and settled through CDS are not subject to NI 24-101.
  • The definition of “clearing agency” included in NI 24-101 will be amended to cross reference the definition of “securities settlement system” found in National Instrument 24-102 Clearing Agency Requirements.

When Do The Changes Come into Effect?

It is expected that the amendments will come into force on September 5, 2017 in all CSA jurisdictions, subject to obtaining government ministerial approvals in certain jurisdictions. September 5, 2017 is the date on which markets in the United States are expected to make the transition to T+2 from T+3 settlement; however, there remains the possibility that such target date be extended if regulatory and industry contingencies are not achieved on time. As such, the CSA has provided for the effective date to be extended as necessary to match any delay of the U.S. transition.


As previously discussed, on August 18, 2016, the CSA  published for comment amendments to NI 24-101 and is companion policy aimed at:

  • Facilitating the move to a T+2 settlement cycle; and
  • Updating, modernizing and clarifying certain provisions of NI 24-101.

Concurrently, the CSA published Consultation Paper 24-402 Policy Considerations for Enhancing Settlement Discipline in a T+2 Settlement Cycle Environment. The amendments to NI 24-101 being adopted are based upon the 2016 proposal.

Further Information

In order to provide further guidance, the CSA plan to update and republish CSA Staff Notice 24-305 Frequently Asked Questions About National Instrument 24-101 – Institutional Trade Matching and Settlement and Related Companion Policy later this year. For further information, please see CSA Notice Amendments to National Instrument 24-101 Institutional Trade Matching and Settlement and Changes to Companion Policy 24-101CP to National Instrument 24-101 Institutional Trade Matching and Settlement (April 27, 2017).

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