THE 360 NEWSLETTER

Currently, the North American investment industry supports a trade date plus two business days (T+2) transaction settlement period. However, the U.S. Securities and Exchange Commission (“SEC”) mandated the U.S. market participants to shorten this settlement cycle from T+2 to T+1, which has prompted the Canadian Capital Markets Association (CCMA) to announce to move in tandem with the U.S. market and support a T+1 settlement period standard in Canada.

As such, please be advised that the transition from a T+2 to a T+1 settlement period for Canadian Capital Markets will take place over the weekend of May 24 to 26, 2024, with an effective date of Monday, May 27, 2024. As a result, over 76.5% of fund company T+2 products are expected to move to T+1.

Impacts to advisors

Fundserv blackout period:

• Fundserv will reject all orders placed between 4:00 p.m. ET and 7:00 p.m. ET on Friday, May 24, 2024, using reject code N99-071;
• Trading orders placed after 7 p.m. ET will have an order date of May 27 and will be settled at T+1 for those funds moving to T+1.

In-cash transfers (“ICTs”) between May 27 and June 7, 2024

• ICTs will be expanded to support T+1 funds on the sell side, however these changes will be included in the Fundserv V34 release scheduled for the weekend of June 8.  As a result, we ask that you please not place any ICTs during this two-week gap period of May 27 to June 7, 2024*.
• Electronic cash transfer orders placed during this period will be rejected by Fundserv with error code 005 (Invalid Fund Identifier).

*Important note: This only applies to in-cash transfers between two different fund companies in client-name accounts as described in Administrative Procedure #39. In-cash transfers between nominee plans or within the same plan, on the other hand, remain possible and will not be rejected by Fundserv.

Reminder – Importance of timely deposits

Since Investia net settles with manufacturers and will need to do so at T+1 going forward, it is imperative that advisors make timely deposits. We are therefore taking this opportunity to remind you that all your bank deposits must be processed and their backups uploaded to head office before the end of the day of transaction entry. For more information, please refer to Administrative Procedure # 14 – Bank Deposits.

Ad hoc withdrawals

Note that in a minority of cases, clients requesting a withdrawal could receive the full amount of their withdrawal after two installments. The majority of funds redeemed will be paid out to clients at T+1, however, if the funds redeemed included a fund with a settlement at T+2, the amount corresponding to this/these fund(s) will be paid out the following day, i.e., at T+2.

Procedure updates

Administrative Procedures #5 – Internal Transfers (Investia Nominee & Intermediary Accounts) and #39 – In-Cash Transfer (“ICT”) will be updated in the coming days to reflect these changes.

Additional information

For more detailed information related to the transition to the T+1 settlement cycle, we invite you to read the following communications:

CSA Announcement – Adoption of Amendments to NI 24-101

Investment Executive – Portfolio managers, advisors are ready for T+1

IFIC – Investment funds and the move to T+1

Should you have any questions, please contact our Client Services Team, by email at investia@investia.ca, by phone at 1-888-684-5548, or use the chatbot feature available on the Advisor Centre.