Four foreign firms have registered with the IIROC this year, which is four times as many as those that did so last year, said a recent report from the Financial Post
Two of the new registrants – Sanford C. Bernstein (Canada) Limited and Jefferies Securities, Inc. – are headquartered in the US, though they have Canadian addresses. MUFG Securities (Canada) is based in New York, according to its registration, while OTT Financial Canada has a Canadian office but, unlike the other new registrants, is focused on derivatives.
Aside from these firms, two US firms – JP Morgan Securities and Imperial Capital, both of which are regarded as international dealers for registration purposes – have been granted exemptive relief to facilitate resales of debt securities of Canadian issuers on behalf of institutional investors. The relief is given on the proviso that the debt securities are not Canadian dollar-denominated, or were originally offered in a foreign jurisdiction and had no prospectus filed in Canada for their distribution.
While foreign firms that set up in Canada generally do so because of regulatory changes, they may also decide to do so to enjoy other advantages.
Jefferies opened a local office four and a half years ago; with its new registration, it can distribute Canadian-issued equities into its existing US system, with US-based structures facilitating such transactions. The firm was previously restricted to offering high-yield issues for Canadian issuers sold into the US under a private placement exemption, or advising on M&A transactions.
MUFG Securities (Canada) is a commercial lender to Canadian corporations, having participated in five major debt financing deals and one equity financing transaction. Sanford Bernstein, owned by global money manager Alliance Bernstein, provides trading and research services, but no investment banking. “We expanded to Canada to put our sales people closer to where our clients are, rather than have them all here at headquarters,” said Sanford Bernstein CEO Robert van Brugge. “Toronto was a natural for us given how strong our client base [was].”
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