A Collaborative Transition
The Canadian Capital Markets Association (CCMA) is coordinating the Canadian financial market’s move to the T+1 settlement cycle. The CCMA’s several industry working groups are working to identify the specific requirements for the Canadian financial industry. CDS is collaborating with the CCMA as part of these working groups.
T+1 Overview
As of May 27, 2024, North American securities now settle just one business day after the transaction date (T+1). This landmark shift increases efficiency and reduces risk in Canadian capital markets.
A Triumph of Collaboration
We thank the tireless market participants, visionary governing bodies, and dedicated industry stakeholders. Your unwavering commitment and seamless coordination have made Canada's transition to T+1 a resounding success. Together, we've ushered in a new era of efficiency in Canadian capital markets.
Key Achievements
The move to T+1 has delivered significant benefits:
- Maintained settlement synchronicity with U.S. securities markets
- Reduced counterparty, market, and liquidity risks
- Encouraged increased automation in operational processes across organizations
Early Success Indicators
Initial data shows promising results:
- Institutional trade processing: Trending towards the 90% confirmation target by 3:59 a.m. on T+1
- CAD settlements fail rate: Comparable to T+2 levels, typically below 2%
- CNS Participant Fund: ~27% decrease based on a five-day rolling average
- CNS Default Fund: 23.4% decrease over the same period
Benefits
Synchronized Settlement with U.S. Markets
Enjoy seamless cross-border transactions and improved liquidity with aligned settlement periods between Canadian and U.S. markets.Enhanced Risk Management
Experience reduced counterparty, market, and liquidity risks, leading to a more stable and secure investment environment.Streamlined Operational Processes
Benefit from increased automation across organizations, resulting in faster, more efficient, and error-resistant transactions.Improved Capital Efficiency
Free up capital more quickly with shorter settlement cycles, allowing for better investment opportunities and cash flow management.Global Competitiveness
Stay at the forefront of global financial practices, enhancing Canada's position in the international investment landscape.Project Reference Documentation
A detailed overview of our upcoming transition to T+1 and why it’s important.
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A landmark initiative for our capital markets ecosystem and a major undertaking for stakeholders across the industry.
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Questions related to T+1?
Seamless Transition to T+1
The Canadian Depository for Securities (CDS), Canada's central securities depository, proudly announces the successful implementation of T+1 settlement. As of May 27, 2024, our production systems have seamlessly adapted to the new standard, reinforcing our position as the trusted provider of clearing, depository, and settlement services for Canadian capital markets.
Global Alignment
Canada's move to T+1 settlement was synchronized with markets in Argentina, Jamaica, and Mexico on May 27. The U.S. market and dual-listed securities on Peruvian markets followed suit on May 28, after the U.S. Memorial Day holiday.
Industry-Wide Collaboration
This achievement is the result of extensive planning and coordination. Initiated by The Canadian Capital Markets Association (CCMA) in December 2021, the project brought together the entire Canadian investment industry. Our efforts aligned with the U.S. securities industry's initiative to shorten their settlement cycle, led by SIFMA, ICI, and DTCC.