Market Link Guide – Canada
Key features
CSD link as defined under CSDRa | Yes |
Type of link | Indirect link through Royal Bank of Canada to:
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Indirect link through RBC Investor Services via CDS to:
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a. CSD Regulation (EU) No 909/2014, Article 2(29).
CSD | Custodian | |
Name | CDS | Royal Bank of Canada |
FATCA GIIN | Not available | G6CADL.00003.ME.124 |
LEI | CDS: 549300BMUBP6YOC66N50 | ES7IP3U3RHIGC71XBU11 |
Country of incorporation | Canada | Canada |
Account type | Omnibus account | Omnibus account |
Legal Account name / holder | Royal Bank of Canada (RBC) In the book of the CSD, securities are registered in the name of CDS & Co. RBC as the participant in CDS does not hold an individually segregated account for CBL at the CDS. | Clearstream Banking S.A. |
Operational arrangements
Yes/No | Remarks | |
Settlement free of payment | Yes | |
Settlement against payment | Yes | Eligible settlement currency:
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Settlement against payment in central bank money account of CBL/CBL clients | No | CAD: The central bank, Bank of Canada, does not hold accounts for deliveries against payment settlement for individual clients. The clearing and settlement system for debt and equities in Canada (CDSX) nets payment obligations between CDS and participants such as RBC that are then settled at the end of the day with payments made through the Large Value Transfer System (LVTS) to the CDS settlement account at the Bank of Canada. CBL holds a cash account at the custodian. USD: Settlement against payment in USD is facilitated through RBC’s custodian, Bank of New York Mellon. |
Bridge settlement | Yes | |
Shaping facility | No | |
Partial settlement | No | |
Settlement penalty fees | Yes | |
Pre-matching | No | |
Back-to-back processing | Yes | |
Allegements | Yes | |
Automatic compensation | Yes | |
Registered securities | Yes | |
Multi-Market Securities | Yes | |
Lending and borrowing | Yes | Debt securities only. |
Proxy voting | Yes | |
Investment Funds | Yes | |
Liquidity Hub Connect | No | |
Sale and purchase of rights | No | |
Repo services | No | |
Market restrictions | Yes | Residents and non-residents in Canada can hold Canadian securities eligible in CBL however the total holding held must remain under certain conditions (refer to Holding restrictions). |
FTT | No | |
Daily reconciliation | Yes |
Moment of entry of instructions | The CSD rules do not define the moment of entry within the meaning of the Settlement Finality Directive. |
Irrevocability of instructions | Entries made in the ledgers by the CDS are irrevocable. |
Finality of instructions | CDS makes entries in the ledgers maintained for participants and for CDS to record transactions involving two Participants or CDS and a Participant. Such entries, and settlement of a payment obligation between CDS and a Participant, are final and irrevocable when made, and cannot be deleted, adjusted, reversed, repaid or set aside. |
Legal arrangements
The below section is based on the legal opinion obtained by CBL that was issued on 6 April 2023. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.
No insolvency proceedings against the custodian | Confirmed |
Liability for negligence | Confirmed |
Book-entry regime with in rem rights | Confirmed. Under local law, a right equivalent to a right in rem is understood to be a security entitlement. |
Recognition of nominee concept | Confirmed. Under local law, beneficial ownership of securities kept with the custodian will at all times be vested to CBL's underlying clients. |
No right of retention to the custodian | Confirmed |
Segregation of assets at the custodian | No, the custodian is not required to segregate securities or other financial assets that it holds for its own account from the financial assets that it holds for entitlement holders. However, under local law no segregation of securities is recommended or typically required because financial assets that the custodian holds for entitlement holders are generally not subject to the claims of general unsecured creditors of the custodian. |
No right of use | Confirmed, except in rare cases where the custodian does not have a sufficient quantity of securities to satisfy all of its entitlement holders. |
No upper-tier attachments | Confirmed, local laws generally do not allow upper-tier attachment though it could conflict with the laws applicable to a security that allow an upper tier attachment. |
Insolvency of the Custodian with no impact on CBL's rights | Confirmed |
Shortfall pro-rated among holders | Confirmed |
Record keeping period of at least 10 years | There is no general requirement under local law for Custodian to maintain records of services or activities with respect to its custody business for a period of at least 10 years. |
Settlement finality in case of insolvency | Confirmed. In the event of fraudulent conveyances tied to a transferer's insolvency, certain transfers may be challenged. |