According to an August 18 news release, the CSA published proposed amendments to National Instrument 24-101
: Institutional Trade Matching and Settlement
in addition to CSA Consultation Paper 24-402: Policy Considerations for Enhancing Settlement Discipline in a T+2 Settlement Cycle Environment
. A comment period lasting until November 16, 2016 was also announced.
The amendments to the National Instrument are being proposed in relation to the Canadian securities industry's plans to shorten the standard settlement cycle for trades from three days after a trade (T+3) to two days after a trade (T+2). The shift to T+2 is set to occur on September 5, 2017, the same date on which US markets are planning to make the same move.
"A shorter settlement cycle is expected to mitigate risk in securities clearing and settlement by reducing counterparty exposure between the parties to a trade," explained Louis Morisset, chair of the CSA and chair and CEO of the Autorité des marchés financiers.
T+2 initiatives by the industry are expected to consider operational improvements to manage settlement risk in the move to T+2. For that reason, CSA members are seeking comment on the adequacy of the current settlement discipline regime for a T+2 cycle, and whether enhancements might be desirable to help support a smooth transition to T+2.
Any proposal to enhance the current regime resulting from the consultation paper would require a further public comment process. The proposed amendments and consultation paper can be found on CSA members' websites.
Deadline for comments on CSA proposals extended
IFIC suggests federal budget adjustments for economic growth