T+2 CANADA KEITH EVANS EXECUTIVE DIRECTOR – CCMA IIAC – OPERATIONS AND COMPLIANCE DAY MARCH 2016

AGENDA CCMA – A history lesson T+2 - Why Now? What are the Benefits? UST2 Update How is Canada Organized? What’s Next? Questions?

CCMA – A HISTORY LESSON The Canadian Capital Markets Association (CCMA) is a federally incorporated, not-for-profit organization, launched in August 2000 to identify, analyze and recommend ways to meet the challenges and opportunities facing Canadian and international capital markets. ‘Moth-balled’ in 2008 Small Board has kept it as an active legal entity Current members IIROC CBA CDS Initial projects were STP/T+1 NI

CCMA – A HISTORY LESSON The current priority of the CCMA is to coordinate a smooth transition to a two-day settlement period, or T+2. Work for the Canadian financial industry. Equities Fixed Income Mutual Funds Includes all segments. Buy side Sell side Custodians Co-ordinate with the US timeline.

T+2 - WHY NOW? US issued a Whitepaper in 2010 T+2 vs T+1 Costs and Benefits US issued a new Whitepaper in June 2015 Focused on T+2 18 month analysis 17 Working Groups US requested the US regulators to make rule changes to support the move to T+2 in Q3 2017

WHAT ARE THE BENEFITS? The migration to T+2 settlement is expected to provide immediate benefits. These benefits include a mitigation of counterparty risk, a decrease in margin requirements for clearing entities a reduction in margin and liquidity demands especially during periods of market volatility an increase in global settlement harmonization. According to the US study, the average clearing fund requirement for clearing members is expected to decrease by % 10 as a result of a move to T+2.

T+2 – US SCHEDULE

CCMA (Executive Director) T+2 Steering Committee (T2SC) Co-Chair – Keith Evans (CCMA) Co-Chair – Jason O”Born (RBCCM) CCMA Board of Directors Operational Working Group (OWG) Co-Chair – Domenic Sgambelluri Co-Chair - Michael Holmes Legal/Regulatory Working Group (LRWG) Chair – Jamie Anderson Communication/Education Working Group (CEWG) Chair – Barb Amsden HOW IS CANADA ORGANIZED

Overall Steering Committee Three Working Groups Operations (OWG) Legal and Regulatory (LRWG) Communications and Education (CEWG) One Sub Working Group Mutual Funds (MFSWG)

HOW IS CANADA ORGANIZED All committees and working groups meet at least monthly Excellent industry participation and support No show stoppers identified to date Vendors and Utilities have all indicated no issues Approximately 100 issues have been identified Three Primary Issues NI Testing Readiness

WHAT’S NEXT? Most of Europe (except Spain) transitioned in 2014 Australia/New Zealand scheduled to transition in March 2016 Re-Launch the new CCMA website Host an industry T+2 event in April 2016 Transition at the same time as the US in Q3 2017

QUESTIONS?