The Canadian Securities Administrators (CSA) all issuers and offerors
that pay entitlements in Canadian dollars to CDS, for distribution to
CDS participants, to make such payments using the Large Value Transfer
System (LVTS) operated by the Canadian Payments Association (CPA).
The LVTS is an electronic wire payment system that permits secure,
almost instantaneous transfer of final and irrevocable funds between
financial institutions. The CPA rules require issuers and offerors to
make payments that exceed $25 million in LVTS funds.
The CSA issued this notice to encourage the voluntary use of LVTS for
payments to CDS of $25 million or less because it believes that use of
LVTS for all entitlement payments to CDS will improve market efficiency,
reduce risk and facilitate Canadas ability to achieve straight-through
processing.
Issuers and offerors making LVTS payments may potentially incur higher
fees and costs depending on factors such as the size of the issuer or
offeror, the nature of their banking relationship and how the payments
are funded.
The CSA is sensitive to concerns about higher costs, and is therefore asking for a voluntary change in payment practices at this time. However, in the final sentence of the Notice, the CSA proposes to assess in a year from now whether there has been any meaningful progress towards the use of LVTS by issuers and offerors (and their agents).”