(vii) US Banking Holidays and Special Settlement For any securities trading on TSX in US dollars (“US Dollar Securities”), Issuers should avoid setting a record date for a dividend that falls on a US banking holiday. If this is not avoided, TSX will have to manually implement special settlement. Currently, for all trades that settle in US dollars, CDS Clearing and Depositary Services Inc. (“CDS”) uses the US Fedwire Funds Services. Because the US Fedwire Funds Services is not open for business on US banking holidays, (i) all US dollar trades executed on TSX that are due to settle on a US banking holiday will ‘fail’ under the CDS system; and (ii) all trades in US Dollar Securities that are due to settle on a US banking holiday, which is also a record date for a distribution, will result in an inaccurate list of security holders on the record date. SECURITIES THAT PERMANENTLY SETTLE T+2: (i) US Dollar Securities that settle on a US banking holiday: TSX will ensure, if the settlement date for a T+2 trade in US Dollar Securities falls on a US banking holiday, that the settlement date will automatically be moved forward one US business day to T+3. This approach ensures that settlement for these trades will occur on a US business day and not a US banking holiday, therefore preventing the CDS system from failing the trades. (ii) US Dollar Securities that settle on a US banking holiday which is also a record date: When a trade in US Dollar Securities settles T+2 on a US banking holiday which also happens to be the record date for a distribution for such security, by settling the trade under the T+3 proposal described in (i) above, certain buyers will not be included on the security holder list to receive the entitlement as of the record date. As a result, TSX must implement special T+1 settlement to ensure that the security holders are on record for the distribution and that the settlement date occurs on a US business day. To avoid this, TSX requests that Issuers not set a record date for a distribution that falls on a US banking holiday. Please refer to Staff Notice 2017-0003 for more details. SECURITIES THAT PERMANENTLY SETTLE T+1: (i) US Dollar Securities that settle on a US banking holiday: TSX will ensure, if the settlement date for US Dollar Securities that permanently settle T+1 falls on a US banking holiday, that the settlement date will automatically be moved forward one US business day to T+2. This approach will ensure that settlement for these trades will occur on a US business day and not a US banking holiday, therefore preventing the CDS system from failing the trades. (ii) US Dollar Securities that settle on a US banking holiday which is also a record date: When a trade in US Dollar Securities settles T+1 on a US banking holiday which also happens to be the record date for a distribution for such security, by settling the trade under the T+2 proposal described in (iii) above, certain buyers will not be included on the security holder list to receive the entitlement as of the record date. As a result, TSX must implement special same day settlement to ensure that the security holders are on record for the distribution and that the settlement date occurs on a US business day. To avoid this, TSX requests that Issuers not set a record date for a distribution that falls on a US banking holiday. 17
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