The Canadian Capital Markets Association has released updated lists of proposed legal and regulatory amendments necessary for Canada to achieve cross-industry straight-through processing of securities transactions by 2005.

“Our proposed amendments will help overcome major challenges, raised in CCMA white papers, with institutional and retail trade processing, electronic alternatives to paper securities certificates, corporate actions and securities lending,” said CCMA chair Thomas MacMillan.

“They require changes to federal and provincial legislation and regulation, as well as rules and standards of self-regulatory organizations throughout Canada’s capital markets. We call on our industry colleagues and professionals within the securities industry to review these lists and help develop a comprehensive map of the legal, regulatory and best-practice changes needed to implement STP.”

Last year, the CCMA published a list of functional changes required to Canada’s legal and regulatory framework known as the General Issues List – Legal or GILL. The GILL identifies the business imperatives that provide direction to the more general work of the CCMA in the months ahead. Changes are prioritized as being critical for STP, very important for STP (for example, because they will reduce risk) and important for optimizing the benefits of STP.

Critical changes include matching trade details on trade date. Very important changes include clarifying property rights associated with the holding of securities and mandating the reporting of corporate entitlement information (e.g., dividends, mergers) to a central location accessible by all investors. An important change recommends consideration of having securities be in electronic form before trading can be initiated.

To meet these business challenges, the CCMA’s Legal/Regulatory Working Group also updated a detailed list of 107 reviewed specific changes required to provincial and national legislation, regulations, by-laws, rules, standards and conventions known as the Detailed Required Amendments List or DRAL. “This second list, now identifying 57 issues, guides us at a practical level in making required changes, helping the LRWG and other CCMA committees liaise with lawmakers and regulators to ensure that the legal and regulatory environment is ready for STP,” said Tom Marley, chair of the LRWG.

Marley went on to say, “While 2005 seems far away, it is important that proposed changes be published for comment and enacted as soon as possible – and no later than December 2004 – so that all industry participants and investors can understand the implications of industry-wide STP. Changes that can be effective before implementation of cross-industry STP will accelerate benefits and reduce the amount of change that will occur in mid-2005.”

The CCMA requests review and comment on the updates from all Canadian securities markets stakeholders by February 1, 2003.