Canadian Securities Regulators Embrace T+1 Settlement Cycle

The Canadian Securities Administrators (CSA) announced on Monday (May 27th) that the amendments to the National Instrument 24-101 Institutional Trade Matching and Settlement (National Instrument 24-101) have officially taken effect. These amendments have shortened the standard settlement cycle for equity and long-term debt market trades in Canada from T+2 to T+1.

The CSA noted that these amendments are in line with industry trends and are consistent with the move towards T+1 settlement cycles and associated regulatory rule changes in the United States. However, due to a one-day statutory holiday, the United States will transition to the T+1 settlement cycle one day later than Canada, on May 28th, 2024.

The National Instrument 24-101 provides a regulatory framework to ensure efficient and timely settlement of institutional trades (equity and debt) by registered dealers and advisers. Registered firms are required to comply with several requirements outlined in the rule, including the establishment, maintenance, and enforcement of policies and procedures aimed at achieving the matching threshold for institutional trades.

The CSA, the council of securities regulators of Canada's provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.