We are currently negotiating with the IDA with respect to certain items that IDA requires for us to be properly registered to conduct customer business in Canada. We are hopeful that these negotiations will come to a favorable conclusion in the next few weeks, and that we will thereupon be in a position to offer our services in Canada. Sincerely, Interactive Brokers Canada Inc.
can you tell us what IB's commission schedule will look like if it enters Canada? Will it be the same as in the US
I have recently been in touch with OSC senior management to register my dismay at the foot-dragging by the IDA on this. The OSC is aware of the situation. It apparently involves the IDA's Bylaw 35 the sticking point of which appears to me to be that IB will be forced to duplicate infrastructure in Canada thus undermining their enonomies of scale and driving up their cost base. In the age of global electronic markets this seems to me a classic case of "ostrich with its head in sand" syndrome with short term gain for long term pain for the IDA. Far better that IDA members should sharpen their own business models and put the necessary technology in place to operate from Canadian bases that benefit from a 63 cent dollar and compete with the IBs of the world in the open market. As a Canadian and Ontario taxpayer I'm outraged that I am being denied access to the most competitive trading platforms available provided they are duly registered here. Where's NAFTA when we need it???
How did you guys get the OSC to respond? In previous correspondence with me they refused to confirm or deny whether there is even an application. My latest email on the subject, with copies to the Ontario Finance minister and two financial journalists, which I sent Feb 19, has so far been ignored. It is interesting to hear that the IDA is the stumbling block. However, it is hardly surprising as IB represents a real threat to their existing members. Keep up the pressure guys with those emails and letters. There is no salvation under NAFTA as financial services were exempted from the agreement.
It is my understanding that Swifttrade had problems with the OSC because they were using SouthWest Securities in Texas as their clearing broker. However, it obviously didn't prevent them registering here. I note that they are now using Penson Financial Services to clear their trades. I don't think they are a Canadian company, so ther must be a way round the clearing problem as they are still doing business.
Yes, I too heard that a local clearing operation was central to the problem. Too bad about NAFTA. I hope that IB doesn't lose heart because this sort of requirement has no place in our 21st century marketplace and the IDA Bylaws need to be updated accordingly. Hopefully additional pressure is being brought to bear by other sources to make the IDA remove all requirements that are counter- productive to a secure, efficient marketplace for Canadian traders and investors.
I was also told that "separate clearing" was the sticking point. However, an IB representative told me that this requirement was NOT in the By-Laws and they had hired a top notch Canadian lawyer to fight it. I have scanned By-Law 35 and not seen anything directly related to clearing. If you have more info on the actual bylaw then please post it. I was also told that no other country that IB has dealt with has required this and that the requirement makes absolutley NO SENSE! I expect IB to put up a big fight.