With the cessation of the Canadian Dollar Offered Rate’s (CDOR) publication in June 2024, Bankers’ Acceptances (BA) will no longer be issued by the major Canadian banks. Given their importance as a short-term investable asset, an orderly transition away from BAs is vital for the well functioning of the Canadian money market. To help with this effort, the Canadian Fixed-Income Forum (CFIF) formed a working group in early 2023 to support the BA transition.
The BA Transition Virtual Network is co-chaired by Elaine Lindhorst (TD Asset Management) and Charles Lesaux (RBC Capital Markets) and consists of members from close to 30 institutions, primarily representing the major buy-side investors active in BAs. Members include insurance companies, pension funds, money market funds, the major BA issuing banks and their dealers, as well as other relevant stakeholders. Member institutions account for approximately 60% of end-investor BA purchases. Today, CFIF published an update on the work carried out by the group to date.
A heightened level of awareness from investors, issuers, regulatory authorities, and policy makers on alternative investment options to BAs is needed to ensure a successful transition given the relatively short timelines before BAs disappear. CFIF, working with industry, will continue to monitor and help facilitate, where appropriate, a smooth transition away from BAs.
The Canadian Fixed-Income Forum (Forum) is a senior level industry-wide committee established by the Bank of Canada to discuss developments in fixed-income market structure and functioning, market practices, and related policy issues. The goals of the Forum are to:
- enhance the efficiency and resilience of the Canadian fixed-income market;
- improve the quality, clarity and market-wide understanding of Canadian fixed-income trading practices;
- evaluate and propose changes to market infrastructure;
- communicate any recommendations and analysis to oversight authorities, regulators, industry groups and other market participants as needed.
The Forum will not discuss monetary policy or policy issues directly relating to the size and distribution of the federal government’s debt programme which are covered through other fora.
Financial Markets Department
Bank of Canada
Bank of Canada