(October 11 – 11:55 ET) – The Canadian Capital Markets Association has been launched to help inform and bring together Canada’s capital markets on T+1 trading and other issues.

The association will identify, analyze and recommend ways to meet the challenges and opportunities facing Canadian and international capital markets, with its first task being to coordinate the shortening of the securities settlement cycle to the day following trade date. Canada will shorten the time it takes to clear and settle a securities trade to one day from the current three days to coincide with similar efforts under way in the United States.

A number of other countries are also considering the change, which will mean a quicker turn-around for investors, improved service and reduced risks. The U.S. Securities Industry Association says that implementation of T+1 in the U.S. could be possible by June 2004.

Some market participants believe that the T+1 task will be far more demanding than the effort required in 1995 to reach T+3. “This time it is not simply about doing the same things faster, but about fundamentally changing the settlement process,” said Charles Baillie, chairman and CEO TD Bank Financial Group. “The effort will require the same industry-wide cooperation as did the Year 2000 project.”

“It is essential that Canada prepare for T+1 to maintain our competitiveness with global capital markets,” said Bank of Canada governor Gordon Thiessen. “Canada, like the U.S., moved from T+5 to T+3 five years ago in a joint effort of government and the financial industry,” Thiessen said. “Canada’s financial services industry needs to join together again to coordinate the move to the T+1 standard with the U.S. to avoid potential market dislocations.”

“To raise awareness and help the industry prepare for T+1, the CCMA is spearheading a number of initiatives,” said Pierre Roach, representing the Canadian Payments Association, a CCMA Member. “Initiatives will include organizing conferences, developing publications, launching a Web site, and commissioning independent research on topics related to T+1. These initiatives are designed to provide the information and coordination that will ensure that Canada’s capital markets keep pace with global advances.”
-IE Staff