CDS Rule Amendment Notice - Technical Amendments to CDS Procedures - New Trade Type ‘MB’

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

CDS CLEARING AND DEPOSITORY SERVICES INC. (CDS®)

TECHNICAL AMENDMENTS TO CDS PROCEDURES

NEW TRADE TYPE ‘MB’

NOTICE OF EFFECTIVE DATE




A.       DESCRIPTION OF THE AMENDMENTS

Background

The CDS Strategic Development Review Committee (“SDRC”) Tax subcommittee has requested that a new trade type be added to CDSX in order to facilitate the tracking of trades involving movements of securities resulting from a marriage breakdown. The current AT (Account Transfer) or C (Client) types of trades are too generic to adequately meet this purpose.

The new trade type, 'MB', will assist CDS Participants in complying with new Canada Revenue Agency (“CRA”) tax reporting requirements related to the Tax-Free Savings Account (“TFSA”) which will become available on January 1, 2009. The proposed TFSA is a registered savings account that allows taxpayers to earn investment income tax-free inside the account. This new MB trade will allow CDS Participants to identify specific transactions for year-end tax related reporting to their client base.

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:

      Trade and Settlement Procedures:
            – Chapter 1 Introduction to Trade and Settlement, Section 1.3

B.       REASONS FOR TECHNICAL CLASSIFICATION

The amendments proposed pursuant to this Notice are considered technical amendments as they are amendments required to ensure consistency or compliance with an existing rule, securities legislation or other regulatory requirement.

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 the proposed amendments will become effective on a date subsequently determined by CDS, and as stipulated in the related CDS Bulletin.

These amendments were reviewed and approved by the SDRC on October 23, 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