Canadian Marketplace Implementing National Instrument 24-101 Institutional Trade Matching & Settlement Jane Davis Executive Director, Canadian Capital Markets Association ISITC Conference - June 4, 2007
Dec 17, 2015
Canadian Marketplace ImplementingNational Instrument 24-101
Institutional Trade Matching & Settlement
Jane DavisExecutive Director, Canadian Capital Markets Association
ISITC Conference - June 4, 2007
CCMA Board & Observers
3
NI 24-101
Compels the industry to automate
Regulation of trade matching parties
Procedural & behavourial post trade changes required
Involves front, middle & back office functions
4
Target Dates
October 2007 - 80% matched by noon on T+1
January 2008 - 90% matched by noon on T+1
July 2008 - 70% matched on T
January 2009 - 80% matched on T
July 2009 - 90% matched on T
Q1 2010 and beyond - 95% matched on T
5
Key Components
Focus on policies and procedures Written acknowledgement of capabilities
Trade matching statement/agreement Phased implementation
Transitional performance targets Performance measurement
Exception reporting Mutual Dependency among trade-related parties
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Implementation Schedule
Effective April 1, 2007
Phased-in transitional performance target dates over an approximate three-year period
Documentation in place by October 1, 2007
Exception reporting for fourth quarter of 2007 in February 2008
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Policies and Procedures
Accelerate trade processing from T+1 to T
Integrated approach
Enhanced electronic transmission
Industry best practices and standards
Front, middle and back office involved
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Acknowledgement
Written acknowledgement
Trade matching statement
Alternatively a trade matching agreement
9
Accelerating Trade Transmission
Acceleration of trade allocations to the custodian (re: investor or fund account) and broker (re: custodian) involves:
Data availability and integrity Frequency and timing of trade transmission Late day systems, operations and information
availability Change in work schedules Front and back office communication
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PerformanceMeasurement
Trade-matching performance measurement Data sources Accuracy Consistency
Development of new reporting
Analysis of results
Corrective action
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Mutual Dependency
Impacts all trade-related parties Broker/Dealers Custodians Investment Managers
Linkage involves third party vendors/ infrastructure providers
Standard Data Elements
Help to facilitate changing of trading routines (algorithmic/DMA)
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Conclusion
Current industry numbers
Active subcommittees / ad hoc working groups
Requires “team” culture within and between parties
Sharing of best practices
Lot of investment of time and money
Canadian Marketplace ImplementingNational Instrument 24-101
Institutional Trade Matching & Settlement
Jane DavisExecutive Director, Canadian Capital Markets Association
ISITC Conference - June 4, 2007