Notice of Commission Approval – Rule Amendments to Facilitate the Investment Industry’s Move to T+2 Settlement – Investment Industry Regulatory Organization of Canada (IIROC)

Market Regulation Document Type
IIROC rule review

The Ontario Securities Commission has approved proposed amendments to IIROC’s Universal Market Integrity Rules, Dealer Member Rules, and Form 1 (the Amendments) regarding the investment industry’s move from a trade date plus three business days (T+3) settlement cycle to a trade date plus two business days (T+2) settlement cycle.  The Amendments will facilitate the investment industry’s move to a standard T+2 settlement cycle, which is expected to take place on September 5, 2017 (the same date that the markets in the United States plan to transition to T+2). 

In addition, the Alberta Securities Commission, the Autorité des marchés financiers, the British Columbia Securities Commission, the Financial and Consumer Affairs Authority of Saskatchewan, the Financial and Consumer Services Commission of New Brunswick, the Manitoba Securities Commission, the Nova Scotia Securities Commission, the Office of the Superintendent of Securities, Service Newfoundland and Labrador, and the Prince Edward Island Office of the Superintendent of Securities Office have approved or not objected to the Amendments.

Among other things, the Amendments are intended to ensure that the transition to a T+2 settlement cycle in Canada is harmonized with the move to a T+2 settlement cycle in the United States, given the close connections between the markets in both countries. The move to a T+2 settlement cycle will align the settlement cycle standard in the North American markets with those in other major markets (e.g., Europe, Hong Kong, Australia, and New Zealand), which have transitioned to a T+2 settlement cycle.

The Amendments were published for public comment on July 28, 2016, and IIROC received one comment letter. The Amendments are expected to become effective on September 5, 2017, at the same time as the North American markets migrate to a T+2 settlement cycle. A copy of the IIROC Notice of Implementation, including the adopted Amendments together with a summary of the comments received and IIROC’s responses, can be found at IIROC has made certain non-substantive changes to the proposed amendments published for comment last year.