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

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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.

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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