CSA Staff Notice 24-319 Regarding Regulation 24-101 respecting Institutional Trade Matching and Settlement

1 CSA Staff Notice 24-319 Regarding Regulation 24-101 respecting Institutional Trade Matching and Settlement – Update and Staff Recommendation August 10, 2023 Introduction On December 15, 2022, the Canadian Securities Administrators (CSA) published for comment draft amendments (the 2022 Draft Amendments) to Regulation 24-101 respecting Institutional Trade Matching and Settlement (Regulation 24-101). This Notice contains CSA Staff’s (Staff or we) views regarding changes to the 2022 Draft Amendments based on industry feedback. Staff intend to recommend that our respective decision-makers adopt1 a revised version of the 2022 Draft Amendments that would include a trade-matching deadline of 3:59 a.m. Eastern Time on the day after the trade (T+1) (rather than a trade-matching deadline of 9 p.m. Eastern Time on the date a trade is made as was published in the 2022 Draft Amendments). Background Regulation 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). Regulation 24-101 has a number of 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 2022 Draft Amendments are intended to align with the shortening of the standard settlement cycle for equity and long-term debt market trades in Canada from two days after the date of a trade (T+2) to T +1, and to coincide, as much as possible, with parallel changes in the United States. The Notice that accompanied the 2022 Draft Amendments asked for feedback on the most appropriate trade-matching deadline to achieve settlement on T+1.2 Purpose of this Notice In public comments on the 2022 Draft Amendments, we received feedback indicating that participants favored a trade matching deadline of 3:59 a.m. on T+1. Staff are supportive of this change to the 2022 Draft Amendments. In other, more recent communications, the Canadian Capital Markets Association (CCMA), which is leading industry coordination efforts in Canada, expressed concerns about the trade-matching deadline published in the 2022 Draft Amendments and the need to know the trade-matching 1 Subject to applicable ministerial approvals. 2 https://lautorite.qc.ca/fileadmin/lautorite/reglementation/valeurs-mobilieres/24-101/2022-12-15/2022dec15-24- 101-avis-cons-en.pdf

2 deadline as soon as possible in order to make the necessary preparations, including information technology systems changes and testing, for the T+1 transition. In response to this feedback, Staff are publishing this Notice to update industry about our recommendation regarding the trade matching deadline to help firms with their preparations for the transition to T+1. The amendments recommended by Staff, if approved by our respective decision-makers3 , are expected to come into force on a date that is aligned with Canada’s industry move to a T+1 settlement cycle, currently expected to be May 27, 2024. Questions If you have questions, please contact any of the following: Autorité des marchés financiers Dominique Martin, Senior Director, Market Activities and Derivatives Tel: 514 395-0337, ext. 4351 Email: dominique.martin@lautorite.qc.ca Autorité des marchés financiers Yasmine Garreau Policy Advisor - Oversight of Clearing Activities Tel: 514 -395-0337, ext. 4697 Email: yasmine.garreau@lautorite.qc.ca Autorité des marchés financiers Francis Coche Analyst, Derivatives - Oversight of Clearing Activities Tel: 514 395-0337, ext. 4343 Email: Francis.Coche@lautorite.qc.ca Ontario Securities Commission Aaron Ferguson Manager, Market Regulation Tel: 416 593-3676 Email: aferguson@osc.gov.on.ca Ontario Securities Commission Jarrod Smith Senior Accountant, Market Regulation Tel: 416 263-3778 Email: jsmith@osc.gov.on.ca Ontario Securities Commission Stephanie Wakefield Senior Legal Counsel, Market Regulation Tel: 647 401-8397 Email: swakefield@osc.gov.on.ca Alberta Securities Commission Harvey Steblyk Senior Legal Counsel, Market Regulation Tel: 403 297-2468 Email: harvey.steblyk@asc.ca British Columbia Securities Commission Michael Grecoff, Securities Market Specialist, Capital Markets Regulation Tel: 604 899-6864 Email: mgrecoff@bcsc.bc.ca 3 Subject to applicable ministerial approvals.

3 British Columbia Securities Commission Navdeep Gill Senior Legal Counsel, Legal Services, Capital Markets Regulation Tel: 604 899-6970 Email: ngill@bcsc.bc.ca Financial and Consumer Affairs Authority of Saskatchewan Liz Kutarna Director, Capital Markets, Securities Division Tel: 306 787-5871 Email: liz.kutarna@gov.sk.ca Manitoba Securities Commission Paula White Deputy Director, Compliance and Oversight Tel: 204 945-5195 Email: paula.white@gov.mb.ca Financial and Consumer Services Commission (New Brunswick) Amelie McDonald Legal Counsel Tel: 506 635-2938 Email: amelie.mcdonald@fcnb.ca Nova Scotia Securities Commission Chris Pottie Deputy Director, Registration & Compliance Tel: 902 424-5393 Email: chris.pottie@novascotia.ca