The Canadian Depository for Securities Limited (CDS) is speeding up the clearing and settlement of equity and debt securities trades from three days (T+3) to one day (T+1).
The CDS is Canada's national securities depository, clearing and settlement hub and is linked to the CDS American equivalent, the Depository Trust & Clearing Corporation (DTCC).
In March 2001, the Canadian Capital Markets Association (CCMA) issued a white paper which discussed institutional trade-processing problems in the Canadian securities market. The white paper set out a blueprint which suggested how trade clearing and settlement times could be improved and invited comment from the securities industry. The CDS is taking on board those comments and leading the drive towards T+1.
Allan Cooper, CDS president and CEO, says: "Comments received in response to the white paper confirmed the validity of the CCMA blueprint. CDS will bring the blueprint to life. The time has come to move from theory to practice."
CDS will define a domestic solution based on the CCMA blueprint with a link to international models. It will analyse the cost of using CCMA white paper suggestions for solutions for the Global Straight-Through Processing Association (GSTPA), Omgeo (global joint venture between DTCC and Thomson Financial) and 'made-in-Canada' solutions. CDS's largest customers will choose the international model they will use for T+1.
CDS will announce the exact form the T+1 solution will take in the coming months but it will be interoperable with other trade-matching systems.
The US is expected to move to T+1 in June 2004 with system-wide testing beginning in 2003.