"It is essential that Canada prepare for T+1 to maintain our competitiveness with global capital markets," said Bank of Canada Governor Gordon Thiessen. "Canada, like the U.S., moved from T+5 to T+3 five years ago in a joint effort of government and the financial industry," Mr. Thiessen said. "Canada's financial services industry needs to join together again to coordinate the move to the T+1 standard with the U.S. to avoid potential market dislocations." He noted that the Securities Industry Association, a U.S.-based association of securities brokers and traders, has reported that implementation of T+1 in the U.S. could be possible by June 2004.
Market participants believe that the T+1 task will be far more demanding than the effort required in 1995 to reach T+3. "This time it is not simply about doing the same things faster, but about fundamentally changing the settlement process," said A. Charles Baillie, Chairman and Chief Executive Officer, TD Bank Financial Group. "The effort will require the same industry-wide cooperation as did the Year 2000 project."
To help inform and bring together Canada's capital markets on T+1 and other issues, the Canadian Capital Markets Association (CCMA) has been launched. The association will identify, analyze and recommend ways to meet the challenges and opportunities facing Canadian and international capital markets, with its first task being to coordinate the shortening of the securities settlement cycle to the day following trade date.
"To raise awareness and help the industry prepare for T+1, the CCMA is spearheading a number of initiatives," said Pierre Roach, representing the Canadian Payments Association, a CCMA Member. "Initiatives will include organizing conferences, developing publications, launching a Web site, and commissioning independent research on topics related to T+1. These initiatives are designed to provide the information and coordination that will ensure that Canada's capital markets keep pace with global advances."
Mr. Thiessen commended the CCMA for initiating the massive effort required of banks, brokers, dealers, investment funds, fund managers, securities clearing and settlement organizations, stock exchanges and securities regulators that have banded together to implement T+1 in Canada.
Individuals who want to receive further information on T+1 should send their name, title, mailing address, telephone and fax numbers and email address to: info@ccma-acmc.ca
For more information concerning the T+1 initiative or the Canadian Capital Markets Association, please contact:
Eric Pelletier
Manager, Corporate Communications
Tel.: 1 (416) 365-8427
Fax: 1 (416) 365-0842
E-mail: epelletier@cds.ca
