CDS Rule Amendment Notice - Technical Amendments to CDS Procedures Relating to Pledge: Pending Reason Code

CDS CLEARING AND DEPOSITORY SERVICES INC. (CDS^®)

TECHNICAL AMENDMENTS TO CDS PROCEDURES

PLEDGE: PENDING REASON CODE

NOTICE OF EFFECTIVE DATE

A. DESCRIPTION OF THE AMENDMENTS

Background

The CDS Strategic Development Review Committee ("SDRC") Debt subcommittee has requested an enhancement to the CDSX^® Pledge function that would identify all short securities in a pending pledge and advise the party (borrower or lender) that has the short security position both online and via an InterLink CDSP05N message.

The addition of this "pending status" functionality will:

-- streamline the effort required by the participant to determine which securities are causing the pledge transaction to pend; and

-- speed up the pledge settlement process, as short securities will be automatically highlighted to participants.

The change will apply to both pledges between participants, and to pledges by participants to CDS in support of their collateral obligations (CMS function).

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

http://www.cds.ca/cdsclearinghome.nsf/Pages/-EN-blacklined?Open

Description of Proposed Amendments

The following procedures will be impacted by this initiative:

Pledge and Settlement Procedures:

-- Chapter 3 Inquiring on Pledges

-- Chapter 4 Modifying Pledges, Section 4.1

-- Chapter 7 Pledge Settlement, Section 7.2

Participating in CDS Services:

-- Chapter 14 Collateral Administration, Sections 14.2.5 and 14.2.6

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 Recognition and Designation Order, as amended on November 1, 2006, and Annexe A ("Protocole d'examen et d'approbation des Règles de Services de Dépot et de Compensation CDS Inc. par l'Autorité des marchés financiers") of AMF Decision 2006-PDG-0180, made effective on November 1, 2006, CDS has determined that these amendments will be effective on September 15, 2008.

These amendments were reviewed and approved by the SDRC on July 31, 2008.

D. QUESTIONS

Questions regarding this notice may be directed to:

Eduarda Matos

Legal Counsel

The Canadian Depository for Securities Limited

85 Richmond Street West

Toronto, Ontario M5H 2C9

Telephone: 416-365-3567

Fax: 416-365-1984

e-mail: [email protected]

JAMIE ANDERSON

Managing Director, Legal