The New Self-Regulatory Organization of Canada (New SRO) has proposed amendments to the Universal Market Integrity Rules (UMIR) and the Investment Dealer and Partially Consolidated Rules (IDPC Rules) to help facilitate the move from a T+2 settlement cycle to a T+1 settlement cycle. The U.S. Securities and Exchange Commission has already adopted rule changes to amend the settlement cycle to T+1, which industry must comply with by May 28, 2024. Collectively, the proposed New SRO amendments harmonize the rules with the T+1 settlement cycle by shortening delivery and settlement periods by one day.
Certain other changes are also being proposed to modernize the IDPC Rules relating to buy-ins and conform to industry settlement periods for mortgage-backed securities. In addition, the New SRO intends to repeal requirements for dealers to file broker-to-broker trade matching exception reports, similar to what the CSA proposed earlier for institutional trade matching exception reports. In the notice of the proposed amendments, the New SRO recommended that dealers review their executed agreements (such as custodian agreements and lending agreements) to determine whether there are any delivery or payment obligations, or interest calculations, specific to a T+2 settlement cycle that will need to be amended.
Comments on the proposal are due by June 19, 2023.
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