Les Autorités canadiennes en valeurs mobilières (les « ACVM ») ont proposé des modifications au Règlement 81-102 sur les fonds d'investissement (le « Règlement 81-102 ») visant à faciliter la décision d'un organisme de placement collectif d'abréger volontairement le cycle de règlement des opérations de souscription et de rachat de ses titres de deux jours à un jour après l'opération (les « modifications proposées »). Les modifications proposées prévoient que le cycle de règlement de un jour sera largement adopté au Canada et elles ont été publiées pour une période de consultation de 90 jours, qui prendra fin le 17 janvier 2024.

Une traduction de ce billet sera disponible prochainement.

The Canadian Securities Administrators ("CSA") have proposed amendments to National Instrument 81-102 Investment Funds ("NI 81-102") to facilitate voluntary decisions by mutual funds to shorten the settlement cycle for purchases and redemptions of their securities from two days after the date of a trade ("T+2") to one day after the date of a trade ("T+1") (the "Proposed Amendments"). The Proposed Amendments anticipate the broader adoption of T+1 settlement in Canada and have been published for a 90-day comment period, which ends on January 17, 2024.

Background

As we discussed in a previous post, in December 2022, the CSA published for comment proposed amendments to National Instrument 24-101 Institutional Trade Matching and Settlement, which would in part enable the shortening of the standard settlement cycle for equity and long-term debt market trades in Canada from T+2 to T+1. They also published CSA Staff Notice 81-335 Investment Fund Settlement Cycles (the "Staff Notice") to clarify that while amendments to NI 81-102 were not being proposed at that time, mutual funds should voluntarily settle on T+1 if the standard settlement cycle in Canada became T+1.

Proposed Amendments

The CSA received one comment letter regarding the Staff Notice, in which the commenter observed that a technical amendment should be made to the forced redemption for non-payment requirement in paragraph 9.4(4)(a) of NI 81-102. While paragraph 9.4(4)(a) requires a mutual fund to redeem securities that were issued to a purchaser if the purchaser fails to pay for those securities the day after settlement, the provision is premised on the current settlement cycle of T+2. Without the Proposed Amendments, a mutual fund that shortens its settlement cycle to T+1 would be unable to redeem its securities for non-payment for an additional day (i.e., until two days after settlement, as opposed to one). In the CSA's view, this may prove administratively challenging and disincentivize mutual funds that are considering a transition to T+1 settlement.

The Proposed Amendments therefore consist of technical changes to accommodate mutual funds that voluntarily decide to settle on T+1. They provide that payment must be made no later than the "reference settlement date" of the purchase order for a mutual fund's securities. The "reference settlement date" means the earlier of: (i) the business day determined by the mutual fund and disclosed in writing to the principal distributor, participating dealer or person or company providing services to the principal distributor or participating dealer; and (ii) the second business day after the pricing date. The Proposed Amendments also modify paragraph 9.4(4)(a) of NI 81-102 to require a mutual fund that shortens its settlement cycle to T+1 to redeem its securities for non-payment on the next business day after the reference settlement date of the purchase order (i.e., on T+2).

Stakeholders are invited to comment on the Proposed Amendments. According to a CSA Staff Notice published in August 2023, Canada is still expected to adopt a standard settlement cycle of T+1 on May 27, 2024.

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