The Canadian Securities Administrators (CSA) have announced that the rule amendments supporting the shortening of the settlement cycle for equity and long-term debt market trades have come into effect in Canada.

Canada has planned a two-year transition to a T+1 settlement cycle. The revised National Instrument 24-101 Institutional Trade Matching and Settlement shortens the institutional trade matching time from two days after the trade date (T+2) to one day (T+1). This change aligns with similar regulatory changes in the United States, where the T+1 settlement will begin on May 28, 2024, one day later than in Canada.

National Instrument 24-101 provides a framework for registered dealers and advisors (registered firms) to ensure the efficient and timely settlement of institutional trades (equities and debt). It requires registered firms to establish, maintain, and enforce policies and procedures designed to achieve institutional trade matching thresholds.

The CSA is a council composed of securities regulators from Canada’s provinces and territories, responsible for coordinating and harmonizing the regulation of Canada's capital markets.

These rule amendments not only enhance trading efficiency but also ensure the stability and transparency of Canada’s capital markets. Through this initiative, the CSA aims to further optimize market operations, ensuring that investors and market participants can complete trade settlements in a shorter timeframe, thereby reducing risk.

This change in Canada's capital markets marks a significant step toward a more efficient and modernized trading system, demonstrating Canada's foresight and leadership in the global financial markets.