Transition to shorter T+2 settlement now underway
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The implementation of T+2 settlement formally takes place next week, on Tues. Sept. 5, but the transition effectively begins on Mon. Aug. 28.

The Canadian Capital Markets Association (CCMA) has published a support plan stressing that the move to shorter settlement cycles “is more than a one-day event.” The transition starts with the last few days of T+3 trading, it notes, and ends Sept. 8, “assuming everything goes as planned.”

The shift to T+2 involves all segments of the investment industry, including brokerage firms, investors, exchanges and other components of trading infrastructure.

“Each firm and each segment will have their own transition requirements, implementation plans and staff/client awareness communication channels in effect for part, or all, of this two-week period,” the CCMA’s report says.

The CCMA plans to provide status updates over the Labour Day weekend based on feedback from various infrastructure components, including TMX Group Ltd., Canadian Depository for Securities Ltd., Canadian Derivatives Clearing Corp. and Fundserv, among others.

The CCMA will also serve as a conduit for information and a resource to help firms deal with any unexpected issues that may arise during the transition.

“The CCMA will not duplicate what individual firms and their infrastructure and service providers, as well as their vendors, will be doing in order to avoid unnecessary work and the potential for confusion,” the report says. “Instead, the CCMA will provide a vehicle for the industry to ask questions that cannot be answered within a subpart of the industry, provide updates, and work with appropriate parties to determine any additional steps required, etc. across multiple parts or all segments of the industry.”

The CCMA also reports in its latest newsletter that the most recent survey of CCMA members finds that all survey participants report being either comfortable or very comfortable that they, along with infrastructure and service providers and counterparties, will successfully transition to T+2 trading.

Read: SEC bulletin educates investors on T+2

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