T+1 Securities Settlement

What does the change mean for you?

Beginning on May 27th, 2024, the new standard for equity settlement will become the following business day after a trade in Canada. US Securities markets will move to Trade Date + 1 business day (T+1) on May 28th (one day later, due to the U.S. public holiday Memorial Day on the 27th).

Trade date (commonly referred to as “T”) is the day your order to buy or sell a security is executed. The day the proceeds from a transaction must be delivered is known as the Settlement date. Currently, most securities follow a T+2 rule. As a result of this change, the settlement cycle will be one day shorter.

What will be affected by this change?

The securities affected by this change include the following:

- Common stocks

- Exchange traded funds (ETFs)

- American Depositary Receipts (ADRs)

- Rights

- Warrants

- Corporate Bonds

The CDS’s list of instruments included in the scope of T+1 settlement can be found provided in the link below: https://cds.ca/resource/en/420

The Details:

Double Settlement Dates:

- Trades that are subject to the T+1 change executed prior to 05/27/2024 for Canadian securities, and 05/28/2024 for US securities will settle on a T+2 basis.

- Trades that are subject to the T+1 change executed on or after 05/27/2024 for Canadian Securities and 05/28/2024 for US securities will settle on a T+1 basis.

Ex-dividend Date Change:

- For standard dividends, the ex-date and the record date will remain the same under T+1 settlement.

- For special dividends, the ex-date and due bill redemption date will remain the same under T+1 settlement.

Margin Call Calculation, Extension Requests, and Regulation SHO Buy-ins:

- Adjusted for T+1 settlement effective 05/27/2024 for Canadian securities and 05/28/2024 for US securities.

o Reg SHO Buy-ins change from T+3 to T+2.

o Money Due calls are due T+3 under T+1 settlement.

o Required Maintenance Call are due T+1 under T+1 settlement.

Where can I learn more?

To find our more information about the T+1 settlement, please visit the CDS link https://cds.ca/resource/en/420, and the DTCC Shortening the Settlement Cycle, https://dtcc.com.ust1.