The Office of the Superintendent of Financial Institutions is alerting firms to a new rule regarding institutional trade matching in a letter.
The letter highlights a new rule from the Canadian Securities Administrators, which came into force on April 1, requiring market participants to establish, maintain and enforce policies and procedures designed to achieve matching of institutional trades on the day on which the trade was executed.
“Commencing Oct. 1, the relevant parties to the matching process will need to execute agreements or state in documentation that they have such policies and procedures in place,” it notes, adding that the rule that mandates matching on the trade day is being gradually phased in over approximately a three-year period.
OSFI says that the new rule will affect federally-regulated financial institutions and affiliates of FRFIs that are market participants, engage in trading activities or hold investment assets as custodians for institutional investors and pension plans.
“We appreciate that many FRFIs, affiliates of FRFIs, and pension plans have been devoting significant resources to achieving necessary efficiencies in their operations. We encourage FRFIs and pension plans, in particular those that are directly affected by [the new rule], to pay close attention to the new rule,” it says.
OSFI warns firms on new institutional trade matching rule
Firms must now establish, maintain and enforce policies and procedures designed to achieve matching of institutional trades on the day the trade was executed
- By: James Langton
- May 2, 2007 May 2, 2007
- 10:52