The Canadian Depository for Securities Limited -- Home: History and milestones

History and milestones

We are proud of our accomplishments at CDS – but most of all of building a legacy of reliability and trust that has allowed us to serve the financial community steadfastly since 1970.

The Canadian Depository for Securities Limited (CDS Ltd.) was incorporated on June 9, 1970 in response to rising back office costs and increased volumes in the capital markets resulting from a vibrant Canadian economy. It was formed to leverage new technologies and automation to create a centralized depository service and an electronic clearing and settlement system that could not only handle higher volumes, but meet future needs.

In 1976, CDS began clearing trades executed on the Montreal Exchange and by the following year, the Toronto exchange was on board.

CDS’s reputation for reliability and innovation grew over the decade, as did the number of participants. In 1979, CDS became a participant of The Depository Trust Company (DTC) in New York, a first step toward meeting the growing need for access to the U.S. market. DTC became a direct CDS participant in 1998, making cross-border clearing and settlement a reality.

In 1981, the first equity securities were deposited in the book-based system. Government of Canada bonds were added to the system in the late 1980s, followed by the implementation of the Debt Clearing System for bonds and money market instruments in the early 1990s.

While CDS was making a foray into international markets and increasing the types of eligible securities on deposit, it was expanding its national presence. The opening of the Vancouver office in 1985, followed closely by Calgary in 1987 and finally Halifax in 1997 created a truly national trade clearing and settlement service.

In 1998, CDS launched its Sweep the Street initiative, a program that ran until 2002 and resulted in the reconstitution of $150 billion in strip bonds, further centralized Canadian holdings and reduced risk. With the launch of CDSX^� in 2003 – one of the most advanced clearing and settlement systems in the world – securities processing at CDS became simpler, faster and more effective. The completion of the securities settlement risk model in 2004 added highly effective mechanisms for managing operational, liquidity and counterparty risk exposures to CDS’s operating environment.

In 2006, CDS restructured its business units to segregate operations based on varied business models and further reduce cross-over risks. This entailed forming CDS Clearing and Depository Services Inc. to provide core clearing and settlement services previously delivered to participants and the financial industry by CDS Ltd.

CDS proudly supports Canada's equity, fixed income and money markets, holding almost $3 trillion on deposit and handling over 220 million domestic and cross-border securities trades annually.

1970s
1970		Incorporation of CDS Ltd. on June 9
1973		Launch of the Securities Settlement Service (SSS) for the over-the-counter (OTC) market
1976		Start of trade clearing for the Montreal Exchange
1977		Start of trade clearing for The Toronto Stock Exchange
1978		New Issue Distribution Service (NIDS) implemented
1979		CDS became a participant of The Depository Trust Company, New York
1980s
1980		Link with The Depository Trust Company facilitated participant transactions in the U.S. market
1981		First equity issues deposited in the book-entry depository
1982		Link with West Canada Depository Trust Company (WCDTC) facilitated transaction processing for participants of CDS and WCDTC
1983		Continuous Net Settlement (CNS) and Pledge Facility implemented First corporate debt issue deposited
1984		Full membership in the National Securities Clearing Corporation (NSCC) in New York improved the efficiency of trade settlement for Canadian firms trading in the U.S. market
1985		Vancouver regional office opened, enabling CDS to provide its services nationwide
1987		Calgary regional office opened First deposit of book-entry strip bonds
1988		Successful completion and implementation of the CDS data centre
1989		Government of Canada bonds made eligible for deposit
1990s
1993		Non-certificated inventory (NCI) and book-entry-only (BEO) capabilities implemented in keeping with dematerialization strategy Reconstituted, packaged and generic CUSIP^® is introduced for book-entry strip bonds
1994		Debt Clearing Service (DCS) implemented to clear and settle Government of Canada bonds
1995		T+3 implemented to settle trades within three days (former standard was five days) DCS enhanced to clear and settle Government of Canada Treasury Bills InterLink service implemented to facilitate DCS trade input
1996		Conversion to Same-Day Funds Settlement System (SDFS) for NSCC/DTC links Merger of operations with the West Canada Clearing Corporation and WCDTC
1997		Halifax regional office opened Quebec municipal bonds are made depository-eligible DCS risk containment model enhanced Entitlement Processing System received a Canadian Information Productivity Award for innovative and effective use of information technology to solve business problems
1998		Ontario municipal bonds made depository-eligible Bring-on of money market project, sweeping the street of nearly $150 billion in bearer deposit notes, bankers’ acceptances and commercial paper deposits Account Transfer - Online Notification (ATON^TM) system piloted The Depository Trust Company became a direct participant at CDS, creating a comprehensive two-way interface between Canada and the United States
1999		Account transfer of mutual fund assets functionality added to ATON Phase II
2000 - 2007
2000		Y2K transition made with no service disruptions Phase III of ATON implemented to expedite transfer process and increase number of mutual fund assets transferred. Online Bulletin service and Forms Online introduced
2001		IRS non-resident witholding tax regulation changes implemented CDS documentation, shareholder meetings and strip bond information made available on website Strip bond reconstitution enhanced to allow the reconstitution of stripped bonds beyond face value, helping Canada maintain its premier status in the world for strips based on a range of benchmarks U.S. dollar Fedwire use expanded Debt conversions to DCS
2002		DetNet^® implemented Ontario, Quebec and Nova Scotia treasury bills brought into DCS Strip bond reconstitution project successful Disaster Recovery Plans successfully tested CDSX Rules and Settlement Services Risk Model circulated for comment
2003		CDSX launched
2004		CDS Risk Model fully implemented.
2005		Entitlement Messaging (EM) and Matched Institutional Trade Interface (MITI) services launched Communications bridge between CDS and SWIFT implemented CDS successfully completes a live disaster recovery exercise on a trading day
2006		Corporate restructuring of CDS Ltd. leads to the formation of CDS Clearing and Depository Services Inc. ACCESS service closed and participants converted to New York Link CDS processes a record 509,625 equity exchange trades (June) CDS completes a major single corporate actions event. The Falconbridge transaction is worth C$13 billion Assets on deposit at CDS surpass the $3 trillion mark CDS internal controls project is completed
2007		Data centre relocation project completed on time and within budget - both primary and backup locations are fully operational Thomas Murray issues AA Public Depository Rating to CDS Clearing and Depository Services Inc. New unprecedented trading volume high was reached when CDSX processed 1,049,794 equity exchange trades, reaching the one million mark for the first time in CDS's history Euroclear UK Direct launched Alcan takeover deal results in the largest corporate action event in CDS history - US$20.16 billion payout for shares tendered.