On September 5 the Canadian securities industry moved to a shortened settlement cycle, from T+3 to T+2. While this change will increase the safety and soundness of our financial systems and directly benefit investors and other market participants – especially when considering the large daily volume of trading in the Canadian and American financial markets – it presents a new challenge to market participants, who must now comply with the shorter processing turnaround time. This may be especially challenging when certificates are involved in a trade transaction, and when issuing shares from treasury for the exercised of stock options.
Computershare has developed proprietary technology that enables issuers to send electronic messages through TRAX to a CDS participant on behalf of an employee or investor. Once the CDS participant accepts the transaction, the securities will be in the recipient's account within two business days. Recipients can also arrange with their broker to have the shares delivered on an expedited basis.
Without having to issue, handle and cancel physical certificates, issuers can also use TRAX to support your dematerialization efforts, processing transactions electronically and allowing for unrestricted positions to be moved electronically to a CDS participant. This eliminates the need for shares to be issued in certificate or Direct Registration System (DRS) format. Issuers and brokers can also mitigate the risks of an account going short or losing certificates and the expenses associated with insuring, storing and replacing them. This process also helps avoid investor frustrations around dealing with lost or delayed certificates, while also expediting buy-back transactions for issuers.
Supporting T+2 obligations and your dematerialization strategy
Computershare has the capability to help CDS participants and issuers meet the shortened timeline of T+2 requirements by processing treasury orders through TRAX, which expedites transaction delivery and settlement time, and can save 1-2 days in processing time.
Our investment in automating the delivery of electronic securities ensures that TRAX transactions are processed on time, every time.
To learn more please contact your Relationship Manager or a member of our Sales Team.
