News Release

SIMA responds to CIRO’s proposed changes to client delivery obligations

Association calls for additional guidance and longer implementation period

July 3, 2026 (Toronto)—The Securities and Investment Management Association (SIMA) today submitted comments on CIRO’s proposed changes to client delivery obligations, which are intended to reduce settlement failures and enhance market integrity. The proposal would require investment dealers to put policies and procedures in place to identify and address client delivery failures—situations where a client sells a security but does not provide the shares needed to complete the trade.

SIMA supports CIRO’s efforts to promote timely settlement, strengthen market integrity, and address concerns with client delivery failures. SIMA also welcomes CIRO’s decision to replace the previously proposed mandatory close-out requirements with a more flexible, principles-based approach that allows dealers to address client delivery failures based on the facts and circumstances of each situation.

“We support strengthening Canada’s settlement framework while recognizing the need for dealers to have flexibility in responding to client delivery failures,” said Andy Mitchell, SIMA’s President and CEO. “The proposed approach is a positive step. However, additional guidance will provide greater clarity on dealer obligations and support industry-wide implementation.”

In its submission, SIMA highlights several areas where further guidance would help firms to implement the proposed framework, including:

• responsibilities of dealers in different trading arrangements, such as when one firm interacts with the client while another processes the trade, or when investments are held and traded through shared or intermediary accounts.
• operation of the “deemed-to-own” exception, including the evidence dealers may rely on to determine whether the exception applies, how those determinations should be documented, and how information should be shared among dealers, affiliates, custodians and other third parties.
• practical application of the proposed requirement to begin remediation within five business days following the settlement date for short-sale delivery failures. SIMA supports this requirement, provided the obligation is understood as the initiation of appropriate remedial action rather than resolution of the delivery failure by that date.

SIMA recommends that CIRO maintain the existing 10-day timeline for extended failed-trade reporting as a shorter reporting period would increase operational complexity without providing proportional regulatory benefits.

In addition, SIMA is calling for a longer implementation period (at least six months), noting that three months is not enough time for dealers to implement the significant operational, supervisory, and technology enhancements.

SIMA’s submission is intended to help ensure the final framework strengthens market integrity while remaining practical and operationally achievable for investment dealers.

About SIMA

The Securities and Investment Management Association empowers Canada’s investment industry. It is the leading voice for the securities and investment management industry, which oversees approximately $4.5 trillion in assets for over 20 million investors and Canadian capital markets participants. SIMA members—including investment fund managers, investment and mutual fund dealers, capital markets participants, and professional service providers—are committed to creating a resilient, innovative investment sector that fuels long-term economic growth and creates opportunities for all Canadians.

For more information

Christine Harminc
Director, Communications and Public Affairs
charminc@sima-amvi.ca
416-309-2313