Canadian Regulators Delaying Registration for U.S. Brokers? Message Board

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Non-Tech : Canadian Regulators Delaying Registration for U.S. Brokers?

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To: TFF who wrote (2)	10/16/2001 7:39:38 PM
From: TFF	of 26

Securities regulators continue crackdown By KAREN HOWLETT From Tuesday's Globe and Mail Canadian securities regulators have targeted three of the largest on-line brokerage firms in the United States as part of their national crackdown on investors bypassing domestic firms. TD Waterhouse Group Inc., Ameritrade Inc. and Datek Online Holdings Corp. all face allegations that they contravened securities laws by allowing thousands of Canadians to open trading accounts without the firms being registered to do business in this country. The three firms have entered into settlement agreements with regulators in six provinces. They will appear at a regulatory hearing in Toronto this afternoon where a panel of commissioners will be asked to approve the settlements, negotiated by enforcement staff at the British Columbia Securities Commission on behalf of all the provinces. What the regulators want to do is enforce a rule that requires U.S. on-line firms to register here if they want to serve Canadian clients, said an industry source. The settlement will likely include a requirement that they register in this country, he added. The registration process in Ontario and some other provinces normally involves opening an office in Canada. But regulators had been looking at the possibility of letting U.S. brokers register here while exempting them from the requirement to set up an office. TD Waterhouse, an arm of Toronto-Dominion Bank, has operations in Canada and the United States - many Canadians have opened accounts through its U.S. subsidiary. Canadian investors are drawn to these U.S. firms by cheaper commissions and access to different investment products. These firms charge trading commissions of roughly $7 (U.S.) per transaction, compared with about $24 (Canadian) to $33 in Canada. Several U.S. firms have set up accounts for Canadians, regardless of the registration rules. Based on polling done last spring by research firm Hart & Associates, about 6 per cent of the 1.4 million Canadians with an on-line brokerage account do business with a U.S. broker.

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