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

6

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

7

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

8

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

10

PerformanceMeasurement

Trade-matching performance measurement Data sources Accuracy Consistency

Development of new reporting

Analysis of results

Corrective action

11

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)

12

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