The Ontario Securities Commission (OSC) has released an analysis of the impact on failed trades as part of the move to a T+1 settlement window. The research found that Canada's market participants were able to adjust to the shortened settlement window without any major market disruption.
On May 27,2024, the trade settlement cycle for listed securities was shortened from two days after the trade date (T+2) to one day after the trade date (T+1). Failed trades occur when the seller does not deliver securities or the buyer does not provide funds by the settlement date. OSC Staff examined failed trades pre- and post-T+1 implementation for different security types and listing markets to assess the impact of the change.
“Understanding the impact of changes to our regulatory system is essential for maintaining trust in our capital markets,” said Leslie Byberg, Executive Vice President, Strategic Regulation. “The smooth transition to a T+1 settlement cycle demonstrates the ability of Canadian capital markets participants to collaborate and cooperate to modernize markets without compromising stability.”
OSC Staff analyzed data from the Canadian Depository for Securities Limited (TMX CDS) from January 2021 to June 2025 to evaluate the impact of the shortened settlement cycle on the prevalence of failed trades. The analysis did not find significant change either in the proportion of securities with failed trades or the proportion of total traded value that failed to settle on time after T+1 settlement was introduced.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at https://www.osc.ca.
Follow us on X Follow us on LinkedIn
SOURCE Ontario Securities Commission
https://rt.newswire.ca/rt.gif?NewsItemId=C7690&Transmission_Id=202509241108CANADANWWEB______C7690&DateId=20250924