On May 1, CASLA issued securities-lending FAQs regarding recalls in a T+1 environment. Automating sending and receiving recalls is key to achieving efficient settlement discipline and reduced settlement risk. Importantly:
“Recall notices should be sent to the borrowers as soon as possible in order to give the borrower ample time, as of the day of the recall, to manage inventory requirements… The industry has operated in Canada and in the United States with an understanding that this cutoff is 3pm EST. CASLA does not anticipate this changing in a T+1 environment unless otherwise agreed to in contractual arrangements negotiated between counterparties.”