CDS Rule Amendment Notice - Technical Amendments to CDS Procedures Relating to Deliverer Buy-in Procedures

Market Regulation Document Type
Canadian Depository for Securities Limited (CDS) rule review

CDS CLEARING AND DEPOSITORY SERVICES INC. (CDS®)

TECHNICAL AMENDMENTS TO CDS PROCEDURES

DELIVERER BUY-IN PROCEDURES

NOTICE OF EFFECTIVE DATE

A. DESCRIPTION OF THE RULE AMENDMENT

Background

The proposed amendments to CDS Trade and Settlement Procedures are made in order to clarify the satisfaction of maximum liability by the actual settlement of a failed-to-deliver position. The proposed amendments add a reminder to Participants that they are not relieved of their buy-in liability through the settling of trades in the normal course during the buy-in period.

The proposed amendments do not alter the status quo with respect to buy-ins or the process by which a Deliverer of a buy-in can inquire as to their liabilities, request an extension, or produce a maximum execute liability report.

The Procedures marked for the amendments may be accessed at the CDS website at:

In English: http://www.cds.ca/cdsclearinghome.nsf/Pages/-EN-UserDocumentation?Open

En français: http://www.cds.ca/cdsclearinghome.nsf/Pages/-FR-Documentation?Open

Description of Proposed Amendments

The proposed amendments to the CDS User Guide entitled Trade and Settlement Procedures clarify a pre-existing note respecting Participants buy-in liability and the Participant's satisfaction of their maximum liability. The proposed amendments clarify that settling of trades in the normal course does not relieve a Participant of its buy-in liability.

B. REASONS FOR TECHNICAL CLASSIFICATION

The amendments proposed pursuant to this Notice are considered technical amendments as they are matters of a technical nature in routine operating procedures and administrative practices relating to the settlement services.

C. EFFECTIVE DATE OF THE RULE

Pursuant to Appendix A ("Rule Protocol Regarding The Review And Approval Of CDS Rules By The OSC") of the OSC Recognition and Designation Order, as amended 1 November, 2006, and Annexe A ("Protocole d'examen et d'approbation des Règles de Services de Dépôt et de Compensation CDS Inc. par l'Autorité des marchés financiers") of AMF Decision 2006-PDG-0180, made effective on 1 November, 2006, CDS has determined that these amendments will be effective on May 7, 2007.

D. QUESTIONS

Questions regarding this notice may be directed to:

Tony Hoffmann
Legal Counsel
The Canadian Depository for Securities Limited
85 Richmond Street West
Toronto, Ontario M5H 2C9
Telephone: 416-365-3768
Fax: 416-365-1984
e-mail: [email protected]

JAMIE ANDERSON
Managing Director, Legal