The Canadian Capital Markets Association has issued a notice indicating that the Canadian securities industry is set to become a global leader in improving the speed of clearing and settling trades.

A new national rule, National Instrument 24-101 — Institutional Trade Matching (ITM) and Settlement, compels the securities industry to focus on automation and connectivity to achieve the ultimate objective of same day trade matching, it notes. The CCMA says that the rule becomes effective April 1, however exception reporting has been delayed until February 2008.

“This is the first regulatory rule in Canada covering all parties to a trade – brokers, investment managers and custodians. Indeed Canada is a leader globally as the U.S. has delayed work on a trade matching rule” said Jane Davis, CCMA executive director.
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The CCMA says that the Canadian Securities Administrators have worked with the self-regulatory organizations, the Office of the Superintendent of Financial Institutions, and the industry to ensure the rule was effectively engineered and capable of enforcement. “Vendors and utilities servicing the industry have been innovative and accommodating to help the industry prepare for same day trade matching,” it adds.

“From an operational perspective, the Canadian securities industry will be a global leader especially important in sector where speed and operational risk are becoming important differentiators,” it concludes.