T+1 Frequently Asked Questions (FAQs)

Here you will find the questions and answers developed for the possible move from a T+2 to a T+1 securities settlement cycle, with more recent FAQs added at the top.  A good number of the CCMA’s T+3-to-T+2 FAQs may also be useful at some point.

Please also check out U.S. T+1 FAQs including the following:

  • What are the industry benefits of accelerated settlement?
  • What is multilateral netting and why is it so beneficial?
  • Why stop at T+1 or T+½? Why not go to real-time settlement?
  • What needs to be accomplished to accelerate the industry’s settlement cycle to T+1 and beyond?

What is the process and timing currently for mutual fund pricing error corrections? (added May 23, 2022)

If there is a pricing error that impacts trades that have already been reported in the Contract File (FS), fund companies have several options. They can issue new price files, reverse and reprocess the transactions with the correct price, or compensate accounts or deduct units.

Are there consequences or follow-up initiated if standard Fundserv timelines are not met? (added May 23, 2022)

Late prices may delay the start of the overnight batch run. if it is extremely late, it may cause a fund company to miss the 6 a.m. ET Contract File (FS) cut-off. This could mean penalties and negative feedback from dealers that won’t receive the file in time to match pending orders. If this occurs, advisors will not see the trades contracted in investor accounts.


Are mutual fund prices created more than once a day and, if, so under what conditions? (added May 23, 2022)

No, prices are created only once a day.


When do fund companies strike mutual fund prices (is there a deadline)? (added May 23, 2022)

Prices are normally struck by 5:30 pm, but it depends on the complexity of the portfolio. There isn’t a formal deadline, but they must be calculated before the Fundserv nightly batch run starts.

The U.S. securities regulator (Securities and Exchange Commission or SEC) issued a formal proposal on February 10, 2022, , which, if adopted, would require moving to a standard T+1 settlement cycle by March 31, 2024, although the DTCC/SIFMA/ICI white paper said the first half of 2024. What is the Canadian marketplace going to do? (added February 17, 2022)

Canadian market participants have committed to moving to T+1 on the same day as U.S. counterparts.  Whatever the final date chosen, Canadian firms should target completing system and operational changes, and be well along in industrywide testing, by December 31, 2023.  We are continuing to work with industry members and our American colleagues to confirm an integrated timeline, which will be posted once approved.

What is T+1? (added December 1, 2021)

T+1 (and T+0, T+2, and T+3) refers to the number of days (as in a one-day gap) between trade execution (or T) and the related trade settlement (defined as the exchange of the buyer’s payment for the trade to the seller in conjunction with the transfer of these securities from the seller to the buyer.

How can I know if my firm is involved or how can I get involved myself? (added December 1, 2021)

Please visit www.ccma-acmc.ca or e-mail Keith Evans at kevans@ccma-acmc.ca.

Do the settlement cycles in the U.S. and Canada need to remain harmonized and, if so, why? (added December 1, 2021)

They don’t need to be, but should be harmonized to reduce risk, complexity and ultimately cost. A CCMA_commissioned study was completed in 1999 by Charles River Associates that indicated the Canadian capital markets should change the settlement cycle at the same time as the U.S. – neither before, nor after. About 40% of trades on Canadian stock exchanges are inter-listed securities (that is, a single security is listed on both Canadian and American exchanges) and Canada-U.S. cross-border transactions make up roughly 25% of the millions of trades processed annually through CDS. Different settlement dates would cause confusion for investors and increase the risk of errors with the associated cost of manual corrections.

Why do securities have different settlement cycles, and why aren’t they the same day just as I can withdraw money from my account and it is processed the same day? (added December 1, 2021)

The automation of both cash and securities markets advanced considerably during the 1980s, 1990s, and first decade of this century. However, the transfer of cash still remains much more straightforward than is the case with securities. A cash transfer requires agreement on and transfer of usually relatively small amounts on a particular date. In the case of securities, there are many more details to agree upon. For example, investment managers have 18 mandatory data elements per transaction to send to the broker-dealer and custodian, if allocating at the individual client level — and the amounts at risk can be considerably greater. Also, some investments involve on and offshore structures, where the offshore part will take longer to transact or involve illiquid securities where it may take extra days to sell an asset at a reasonable price.

What securities will be affected by the shortened cycle? (added December 1, 2021)

In general, the main securities that are expected to be impacted are: all stocks or equities, all corporate bonds, and long-term government bonds with a remaining term to maturity of more than three years (TBC), as well as investment funds, including conventional mutual funds, exchange-traded funds or ETFs and hedge funds, as well as segregated funds and principle-protected notes.

How could this affect me as an investor? (added December 1, 2021)

Many investors might experience no change at all, if they buy and sell using securities and cash they already have in their accounts. If they hold securities as certificates in physical form, however, investors have to deliver them to their dealer beforehand. If they are not selling securities already in their accounts or don’t have enough cash, they will have to deposit cash to cover the transaction. Speak to your dealer or custodian to learn more details about the effect of any changes.