The Canadian Capital Markets Association (CCMA) released a bulletin providing progress on preparations ahead of T+1 in May 2024. Among the items in planning is a “vendor-agnostic securities loan recall portal”. TMX is planning to develop a securities lending portal intended to let agent lenders and borrowers using different vendors (say, Equilend, FIS, Pirum) to receive/communicate and upload notifications.
This would enable easier and more reliable processing of securities loan recalls by streamlining the process from the beneficial owner, who advises an agent lender of a recall need, and the agent lender getting that information to the borrower to process the recall.
In a separate announcement, the CCMA released T+1 preparation survey results. Some rule uncertainty has been dealt with: Canadian securities regulators had to issue proposed rule changes on the basis of the U.S. draft T+1 rules, setting a particular time by which industry participants were to achieve 90% trade matching. The CCMA, based on feedback from its members, recommended an alternative time believed to better suit the Canadian marketplace and that would, if adopted, considerably affect development efforts. CSA (Canadian Securities Administrators) Staff have confirmed their intention to recommend a time of 3:59 a.m. ET T+1, providing the comfort considered by CCMA members to be a major step forward in proceeding with development.
Also among the findings, respondents indicated that DLT/blockchain has not been a viable solution. Following the 2017 transition to T+2, distributed ledger technology (DLT) had been identified as a solution for efforts to further shorten the settlement cycle; since then, a number of DLT-based financial projects have failed to scale effectively, and at the same time the US Securities and Exchange Commission (SEC) introduced uncertainty about how soon there might be a regulatory change to mandate same-day settlement, delaying decision-making as industry participants considered different solutions for T+0 vs T+1.