The Canadian Securities Administrators (CSA) recently announced that rule amendments supporting the move to a shorter settlement cycle for equity and long-term debt market trades came into force in Canada.
The amendments to National Instrument 24-101 Institutional Trade Matching and Settlement align with the industry’s move to “reduce the time by which institutional trades must be matched from two days after the date of a trade (T+2) to one day (T+1).”
This is consistent with the “associated regulatory rule changes in the United States.”
The transition to T+1 in the United States has long been anticipated and will occur on May 28, 2024, or a day later than in Canada.
National Instrument 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).”
It has several 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 CSA, the council of the securities regulators of Canada’s provinces and territories, coordinates and “harmonizes regulation for the Canadian capital markets.”
The Canadian Securities Administrators is an umbrella organization of Canada’s provincial and territorial securities regulators whose objective is “to improve, coordinate, and harmonize regulation of the Canadian capital markets.”
The CSA’s national systems include the National Registration Database (NRD), a web-based database that allows security dealers and investment advisors “to file registration forms electronically; the System for Electronic Disclosure by Insiders (SEDI), an online, browser-based service for the filing and viewing of insider trading reports; and the System for Electronic Document Analysis and Retrieval (SEDAR), a publicly-accessible database that contains all the required non-confidential filings related to publicly-traded Canadian companies.”
The CSA serves a regulatory function that is somewhat comparable to that of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the United States.
