How did we choose our best stock brokers in Canada?
The first thing we did was to make sure that any broker under consideration for the best stock brokers in Canada was regulated by the Investment Industry Regulatory Organization of Canada (IIROC). This is the regulatory authority for stock brokerage firms who provide online stock trading in Canada. Upon confirmation that the broker was regulated, we conducted in-depth research and detailed analysis on the services provided. Based on our findings of what we consider to be some of the most important factors worth considering when choosing an online stock broker, we were then able to assign them with a stock broker rating. Some of the key things we considered include:
- Regulation: A stock broker should be regulated by the IIROC to provide online stock trading in Canada.
- Stock Trading Platforms: The stock broker should have a range of the best stock trading platforms with user friendly interfaces and trading tools for analysing the stock markets. The platforms should be compatible on desktop, web and mobile devices for trading stocks whilst on the move.
- Stock Trading Instruments: The stock broker should offer a large selection of global stocks in different markets for trading online.
- Spreads: The stock brokers spreads should be competitive, the tighter the better.
- Commission: The commission charged for trading stocks should be priced low.
- Fees: Other fees such as those charged for deposits, withdrawals, account inactivity, holding positions overnight, etc, should all be made clear.
- Execution Speeds: Traders buy or sell stock positions should be entered with minimal delays.
- Liquidity Providers: The stock broker should utilise top tier liquidity providers (LPs) in order to offer a deep liquidity pool to traders.
- Stock Trading Tools: There should be a good selection of trading tools for analysing the stock markets, planning and managing positions, receiving trading signals, social trading, etc.
- Educational Materials: The stock broker should consider new traders by offering them a variety of educational resources on different stock trading topics to help them improve their trading skills and knowledge. Training tools can include video tutorials, stock trading guides, webinars, etc.
- Stock Trading Accounts: The stock broker should offer a choice of flexible trading accounts to cater for different levels of investment and experience levels.
- Account Deposit & Withdrawal Methods: There should be a choice of convenient account funding options, ideally including online payment processors for fast and easy account funding.
- Client Support: The stock brokerage should offer efficient and well-educated client support in order to respond in a polite and prompt manner to all general and technical questions that stock traders may have.
Canadian stock brokers regulation
Online stock trading is a popular form of online trading that enables the trader to speculate on the rising or falling prices of a particular company or basket of selected stocks known as Indices. An online stock brokerage acts as the intermediary between you the trader and the exchange where the stocks are traded. Anyone can open a trading account with an online brokerage and use their online stock trading platform to buy and sell stocks. In recent years, online stock trading has continued to increase in popularity and with so many Canadian stock brokerages to choose from, it can make it difficult for traders to choose the best stock broker in the Canada according to their own needs.
For the team here at Trading Brokers, we believe that one of the most important things to consider when choosing from the best Canadian stock brokers, is that the brokerage firm is regulated by the Investment Industry Regulatory Organization of Canada (IIROC). Using a regulated stock broker can give online traders the peace of mind that they are using a brokerage that must abide by strict rules and regulations put in place to protect investors.
It is worth mentioning that there are some non-Canadian stock brokers that still solicit clients located within Canada. There are also Canadian stock brokers who offer online stock trading services to clients located in some countries outside of the Canada. In this instance, it would be a considered a wise idea to ensure that the stock broker in question has the relevant regulation within the jurisdiction that they are operating from.
Investment Industry Regulatory Organization of Canada (IIROC)
The Investment Industry Regulatory Organization of Canada is the national self-regulatory organisation which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. IIROC was established as a non-profit corporation on June 1st, 2008 as part of the consolidation of the Investment Dealers Association of Canada (IDA) and the Market Regulation Services Inc. (RS).
IIROC operates under Recognition Orders from the Canadian Securities Administrators (CSA), which is the umbrella for Canada’s provincial and territorial securities regulators. IIROC is subject to CSA oversight and regular operational reviews. The organisation sets regulatory and investment industry standards and has quasi-judicial powers in that it holds enforcement hearings and has the power to suspend, fine and expel members and registered representatives.
Verifying a Canada stock brokers regulation
If a stock broker claims to be licensed by the IIROC to operate in Canada, they should have a registration number to evidence this. This registration number will usually be located near the footer of the brokers official website. It would be a sensible idea to check that the brokers registration is valid and up to date on the IIROC website. There are unfortunately scam brokers to be wary of. These scam brokers have been known to fake regulation with some even going as far to clone another brokers website. When you are checking a broker’s registration number, you should verify that the details of the brokerage firm including their website and contact details are provided and if they have any cases brought against them.