A report to the Canadian Capital Markets Association says that Canada is about more than a year behind the U.S. in the move to implement straight-through processing.

With that goal still several years off, the CCMA’s board of directors has unanimously agreed to realign its key priorities to focus efforts on achieving institutional trade-date matching.

Until recently, the CCMA has worked to facilitate the Canadian securities industry’s move to implement STP. However, recent research, commissioned by the CCMA and conducted by the Capital Markets Company (Capco), found that Canada’s STP readiness potentially lags the U.S. by 14 months.

Differences in market regulation and business practice account for some of the gap between the markets, but the overall gap is largely attributable to the degree to which the Canadian market is positioned to perform same day trade matching of institutional trades from a technological, behavioural/process and regulatory standpoint.

The research found that institutional trade matching (agreeing to the details of a trade, the day the trade was executed) is the area of greatest benefit for the Canadian marketplace.

CCMA recommends utilizing the existing framework of self-regulatory organizations to establish the integrated set of rules necessary to advance institutional trade matching. It says that it believes that there is sufficient time to develop and implement the framework to achieve institutional trade-date matching as it could be at least 2-3 years before the U.S. will be in a position to shorten its settlement cycle.

“The board’s decision will enhance the competitiveness of the Canadian capital markets globally”, said Gerry O’Mahoney, chair of the CCMA. “While Canada is ahead in areas such as payments and dematerialization and much work has been done with the development of industry best practices and standards, focusing our work on the implementation of institutional trade matching will position Canada to gain momentum and align our goals with developments in the U.S.”