The proposed amendments to NI 24-101 and CP 24-101 (the
"Proposed Amendments") are intended to
assist in a successful migration to T+2 settlement from the current
T+3 regime. The Proposed Amendments also update NI 24-101 to
reflect certain developments since it came into force in 2007, as
well as clarify certain existing provisions. For example, the
Proposed Amendments include making trades in exchange-traded mutual
fund (ETF) securities, a significant area of growth since 2007,
subject to NI 24-101. Other proposed revisions to modernize or
clarify NI 24-101 and CP 24-101 include broadening the definition
of "clearing agency" to include clearing agencies other
than CDS and enhancing the provisions on matching services
utilities systems and business continuity planning.
The Consultation Paper provides an overview of existing
settlement discipline measures in the Canadian equity and debt
markets and raises policy considerations for addressing the risk
that the transition to a standard T+2 settlement cycle might
increase settlement failures. The CSA is using the Consultation
Paper to seek comments on whether (i) additional settlement
discipline measures might be required, including additional
amendments to NI 24-101 and CP 24-101, and (ii) other settlement
discipline mechanisms – similar to those already in place or
proposed in certain foreign jurisdictions, such as a
settlement-fail penalty mechanism or a close-out (or forced buy-in)
requirement – for the Canadian equity and debt markets would
deter settlement failures.
The comment period on the Proposed Amendments and the
Consultation Paper expires on November 16, 2016.
In Ontario Securities Commission v. Tiffin, the Ontario Court of Justice clarified the limits of the definition of "securities" under s.1(1) of the Securities Act, as it relates to promissory notes. The defendant in the case was charged with trading in securities without being registered and while prohibited, and without filing a prospectus.
The OSC has issued a press release advising stakeholders that Ontario securities law may apply to any use of distributed ledger technologies, such as blockchain, as part of financial products or service offerings.
The use of electronic signatures is becoming increasingly commonplace in commercial transactions, as individuals and businesses capitalize on the administrative efficiency afforded by today’s digital world.
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