TSX Markets is seeking comment on a plan for special settlement of U.S. dollar stocks on days when Canadian markets are trading but U.S. markets are closed.

It proposes changes to US settlement dates for U.S. banking holidays: Martin Luther King Day, Presidents Day, Memorial Day, Independence Day, and U.S. Thanksgiving.

If T+3, for a stock traded on either Canadian exchange in U.S. dollars, falls on a U.S. banking holiday (considered a Canadian business day in the T+3 calculation), CDS cannot utilize the Fed Fund wire service to settle and the U.S. Dollar trade will “fail”. There is no way for a CDS system participant to make a U.S. dollar settlement on a U.S. banking holiday.

TSX Markets reports that it has concluded talks with operations personnel of brokerage firms, CDS and trading systems providers regarding settlement of stocks trading in U.S. dollars in the Canadian marketplace. The talks resulted in a new special settlement proposal which it is now seeking comment on.

The committee proposes: if T+3, as is currently calculated by TSX and TSXV systems, falls on a U.S. banking holiday, the settlement due date will be moved forward one business day to T+4 for all U.S. dollar traded stocks; if T+3 falls on both a U.S. banking holiday and a Canadian entitlement record date for a particular U.S. dollar traded stock, settlement due date for that stock only will be moved back one business day to T+2.