Canadian Broker-Dealers Adapt to Change09.20.2013
Canadian broker-dealers are adapting to market structure and regulatory changes with new products and services that cater to a cross-section of institutional and proprietary traders.
Jitneytrade, an agency-broker dealer, has responded to new regulations calling for pre-trade risk controls by providing connections to all Canadian markets.
“We support a selection of ways to send orders via a firm’s own proprietary technology, our own FIX connection or through a variety of front end providers,” said Jean Francois Sabourin, Jitneytrade’s president and CEO. “We understand the need for efficiency in operations, reliability and consistency in connections and being able to rapidly adapt in line with regulatory requirements.”
As a sponsored access pioneer in Canada, Jitneytrade has developed, with its partners, unique services such as Canadian cross-market ticket compression and highly sophisticated risk monitoring and compliance software.
For proprietary traders, Jitneytrade’s Montreal facilities offer 50 personalized trading stations. “Active day traders have few places to go,” said Sabourin. “Most of the major Canadian brokers will not accept them as clients except for their discount brokerage, in which case they are forced to use a generic trading platform. Our model is different. We are trading platform agnostic, so as long as we can monitor the trader’s risk and credit, they are free to use whatever trading platform they want.”
With recent regulations requiring that brokers providing sponsored access provide pre-trade risk controls, Jitneytrade has developed pre-trade filters that can work with a variety of trying front-ends.
“Since we are platform agnostic, we have multiple interfaces to make sure that our risk tools will work with any platform,” said Sabourin. “We are also offering this risk solution to institutional investors as well as active traders.”
The new paradigm is being driven by changes in regulation and technology.
“Canada’s capital markets structure has undergone significant and continual change, particularly over the past decade, presenting new challenges for the industry, investors, regulators and market participants,” said Susan Wolburgh Jenah, president and CEO of the Investment Industry Regulatory Organization of Canada, in a September 2013 speech. “The recent performance of the equity market reflects Canada’s dependence on the natural resources and commodities sectors. It has been a challenging environment for capital raising and traditional equity underwriting and trading activity.”
Consolidation in the industry is occurring as firms seek opportunities to lower costs and leverage economies of scale. “Within our dealer environment, we see some firms introducing new business lines and products and an increased focus on wealth management,” said Jenah. “Complex product innovation continues to pose challenges for regulators, investors and the industry as a whole.”
Strategy Studio allows brokers to create their own execution platforms.
Allowing algorithms to control the supply and demand of crypto was challenged by Terra Luna.
Infrastructure and sustainability will be one of the biggest opportunities in alternative investments.
The broker's algo development team gains access to high quality, granular Level 3 data.
Bank aims to gain share from its systematic approach to trading, market structure proficiency and modern techn...