CANADA: CSA Preparing for the Implementation of T+1 Settlement

Wednesday March 2 2022

The Canadian Securities Administrators (CSA) has published a notice to raise awareness, summarize views, and describe the role with respect to an initiative by the Canadian securities industry to shorten the standard settlement cycle for most trades in securities from two days after the date of trade (T+2) to one day after the date of trade (T+1). 

Move to shorter settlement cycles 

As noted in the transition to T+2, CSA Staff continue to be of the view that shorter settlement cycles can help reduce settlement risk and have the potential to improve operational efficiencies for the industry. Keeping the settlement cycles of Canada and the United States aligned can also reduce market inefficiencies that could otherwise arise if the Canadian securities market maintained a different standard for settlement 

At the same time, migration to shorter settlement cycles will likely require significant operational changes such as changes to staffing, processes, rules and systems. Close collaboration and coordination across industry participants and other capital market stakeholders will be required. CSA support industry coordination efforts to move to T+1, and anticipate that the CCMA and its working groups will be widely representative of all stakeholders. As it did for the transition to T+2, the Canadian securities industry will need to make appropriate preparations to successfully implement the migration to T+1. 

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