Canada: Moving towards a T+1 settlement cycle in 2024
Further to Announcement A23012, Clearstream Banking1 reminds clients that the Canadian Capital Markets Association (CCMA) announced the Canadian T+1 settlement cycle adjustment start date as
27 May 2024
The CCMA acknowledged that this is one day earlier than the U.S. Security Exchange Commission’s announced date for U.S. markets of 28 May 2024. This decision is driven by Canadian markets being open for business that day, while U.S. markets will be closed.
Processing schedule
The United States and Canada will not be aligned for the transition to T+1 settlement. As such, the CCMA announcement shared a timeline of the asymmetric processing schedule:
- The last date on which securities will be traded on the current two-day (T+2) settlement standard in Canada and the U.S. will be Friday, 24 May 2024.
- Capital market participants in both countries shall adjust their systems to support a shortened standard securities settlement cycle on the weekend of 25 and 26 May 2024.
- The first day of T+1 trading will be the next business day in both countries: Monday, 27 May 2024, in Canada and Tuesday, 28 May 2024, in the U.S.
Friday, | Saturday, | Sunday, | Monday, | Tuesday, | Wednesday, | Thursday, | |
Canada settlement cycle | Last T+2 Trade Date | Conversion Weekend | Conversion Weekend | First T+1 Trade Date | Double Settlement Date | Trade and settle T+1 | Trade and settle T+1 |
U.S.A. settlement cycle | Last T+2 Trade Date | Conversion Weekend | Conversion Weekend | Conversion Weekend (Markets closed) | First T+1 Trade Date | Double Settlement Date | Trade and settle T+1 |
Impact on clients
Historically, trading volumes in Canada are lower when the Canadian market is open, and the U.S. market is closed. Hence, smaller risks associated with implementing system changes during the conversion weekend can be expected.
Clearstream Banking is currently analysing the impact of the transition with regard to its IT infrastructure and business processes to support a seamless shift from T+2 to T+1 settlement.
Clearstream Banking will update clients on any potential impact on the various services, that is, settlement, cash, income and corporate actions, and the transition timeline for the settlement process in due time.
Clients are recommended to review related publications issued by the U.S. and Canadian competent authorities to assess the impact of the shortened settlement cycle.
Further information
For further information, clients may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG clients using Creation accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.