Modernizing Canada’s clearing and settlement framework
Changes to CDS Clearing’s fee model directly affect the costs, transparency and fairness of Canada’s clearing and settlement system, which affects all market participants.
Submission – CDS Clearing and Depository Services Inc – Proposed Significant Changes to Discontinue the Fee Rebate Model and Reduce Certain Core Clearing and Settlement Fees & Proposed Amendments to Eliminate Network Connectivity Fees and to Eliminate Report File Transmission Fees
Recipients
- Kevin Sampson, President, CDS Clearing and Depository Services Inc.
- Autorité des marchés financiers (AMF)
- Ontario Securities Commission (OSC), Market Regulation Branch
- British Columbia Securities Commission (BCSC), Capital Markets Regulation
Industry segments this resource supports
- Capital markets
Summary
We submitted comments opposing CDS Clearing’s proposal to eliminate its longstanding fee rebate model and adjust several core and non-core fees. While we support modernization of Canada’s clearing and settlement infrastructure, we argue that the proposal lacks adequate justification, transparency, and alignment with public interest commitments established during the Maple Group’s (now TMX Group) acquisition of CDS. The submission highlights concerns about governance, cost allocation, participant value, and the absence of a clear framework for evaluating the impact of the post-trade modernization (PTM) initiative. We urged CDS and regulators to keep the rebate structure until a more transparent, equitable and accountable fee model is developed collaboratively with industry.
Why this matters: Changes to CDS Clearing’s fee model directly affect the costs, transparency and fairness of Canada’s clearing and settlement system, which affects all market participants.
Key takeaways
- SIMA supports modernization but believes the proposed elimination of the rebate model is not justified and would place a disproportionate burden on participants.
- The rebate was originally introduced as a public-interest safeguard during the Maple Group acquisition and should not be removed without a robust governance framework.
- CDS Clearing’s rationale that rising costs require rebate elimination is challenged, as CDS has generated strong profits and paid substantial dividends to TMX Group.
- Participants already fund modernization through existing service fees; eliminating rebates would effectively require them to pay twice for the same infrastructure investments.
- Claims that certain fees are being eliminated are misleading, as many costs are simply being shifted to participants, and some fees—such as site-to – site port charges—remain in place.
- Transparency concerns persist, including inconsistent or incomplete financial impact data and unclear benefits from the PTM initiative.
SIMA recommends keeping the rebate structure until a comprehensive, transparent, and industry-supported fee framework is established.
