The Canadian Capital Markets Association (CCMA) this week held discussions on the implications of the revised National Instrument 24-101 , which concerns Institutional Trade Matching and Settlement.
Initially issued in April 2004, the 24-101 rule was originally designed to provide a general framework in provincial securities legislation for ensuring a more efficient and timely process for matching and settling institutional trades. It requires market participants to have policies and procedures in place that enable them to match trades on trade-date by 1 July 2008.
Progressive trade-matching thresholds and target dates have been set, starting with 1 January 1 2007, when 70 per cent of all trades are to be matched by noon on T+1.The comment period for the revised rule ends 2 May 2006.
The CCMA information session focused on the rule’s impact on the investment management and broker dealer market participants.
Randee Pavalow, Director, Capital Markets, Ontario Securities Commission, initiated the discussion with a review of the industry’s progress, the evolution of the current rule and answering questions and issues raised during the discussion period.
Jenny Tsouvalis, Chairman of the CCMA Buy-Side Subcommittee and Vice President, Operations and Applications at OMERS, led the panel in discussing the impact of the rule on an investment manager’s operations and how to best achieve implementation of the rule through evaluating current workflow, tracking trade matching rates with custodians and by addressing data issues throughout the process.
Ed Charron, Vice-Chairman of the CCMA Custodian/Broker Subcommittee, and Director, Operations Manager, GMP Securities Ltd. reviewed the compliance and reporting requirements for broker dealers, as well as stressed the importance of the dealer community to review their internal processes and procedures.
“The rule will benefit all market participants,” said Alan Hutton, CCMA Vice-Chairman, who moderated the panel “It will improve the competitiveness of Canada’s capital markets, reduce operational risk and increase productivity.”