CDS Clearing and Depository Services Inc. is proposing amendments to its rules regarding the issuance of money market securities.

In a request for comment on the proposed rule changes published Thursday, CDS reports that last year it reviewed the processes for issuing, transferring and maintaining custody of money market securities in CDSX, and the roles and responsibilities of the participants acting as issuer agents. In doing so, it determined that the processes require updating, that additional controls and standards should be imposed on its internal processes and on participant issuer agents, and that new measures are required to ensure compliance with these controls and standards. As a result, systems changes, and rule and procedure amendments, are required, CDS says.

“The primary focus of the rule amendments is the definition of participant roles and responsibilities with respect to eligible securities, and the imposition of standards for adequate internal controls and segregation of duties in the back-office operations of participants who undertake these roles,” it explains.

The firm notes that the amendments relating to the role of issuer agents only affects the group of 15 participants who act as issuer agents, all of whom have been consulted during the development of the new process and standards for the issuance of money market securities through CDSX.

Additionally, it says that the amendments relating to the eligibility of securities reflect current practices and will have no impact.

The amendments relating to the release of material risk information will affect all participants, by enabling them to assess and respond to material risk in CDSX, it adds.

“The rule amendments as a whole should have no impact on other money market players or on the securities and financial markets in general,” it concludes.

Comments on the proposed amendments are due by February 21, and they are expected to effective by April 5, assuming regulatory approval.

CDS is also proposing a series of housekeeping amendments which are also out for comment until Feb. 21, but would take effect March 1.

IE