On December 15, 2022, the Canadian Securities Administrators (CSA) published for comment proposed rule amendments to National Instrument 24-101 Institutional Trade Matching and Settlement (NI 24-101) to support the transition from a two-day Canadian trade settlement cycle (T+2) to a one-day settlement cycle (T+1).
The NI 24-101 amendments include among others:
The repeal of “T+2”
The requirement for registered dealers and registered advisers to have policies and procedures in place designed to achieve institutional trade matching by 9 p.m. Eastern Time on the date of a trade (T), as opposed to the current requirement of 12 p.m. (noon) Eastern Time on T+1
Amendments to Form 24-101F2 Clearing Agency Quarterly Operations Report of Institutional Trade Reporting and Matching and Form 24-101F5 Matching Service Utility Quarterly Operations Report of Institutional Trade Reporting and Matching
The repeal the Exception Reporting Requirement
A reference to cyber-resilience to the system requirements
NI 24-101 Companion Policy is being amended accordingly.
The move to a T+1 settlement cycle is scheduled to be effective in 2024, ‘at the same time as the markets in the United States move to a T+1 settlement cycle’ and this to facilitate the update of procedures and processes.
As outlined in CSA Staff Notice 81-335 which was released the same day, the CSA is not amending National Instrument 81-102 Investment Funds to mandate a shorter settlement cycle.
NI 24-101 came into force in 2007 and was intended to provide a legislative framework to ensure more efficient and timely processing and settlement of institutional trades in Canada. It requires institutional trading participants to establish processes and procedures that allow trade matching within prescribed limits.
Comments should be submitted by March 17, 2023.