(September 22 – 17:20 ET) – The Ontario Securities Commission has granted a suitability exemption to a new Toronto-based day trading firm, Quest Capital Group Ltd. allowing day trading of Canadian stocks for the first time.

Quest Capital is a registered securities dealer with its head office and trading facilities in Toronto. It plans to provide electronic day trading services, offering access to the TSE, CDNX, NYSE, AMEX and Nasdaq. Existing day trader Swift Trade Securities only trades NYSE and Nasdaq stocks.

The OSC granted Quest the necessary suitability exemption provided that:

  • the firm exercises diligence in ascertaining that day trading is a suitable strategy for its customers based on their financial circumstances, including investment experience and investment objectives;
  • it ensures that those circumstances continue to make it suitable;
  • it ensures that each customer understands the operation of Quest Capital’s order execution systems and procedures;and
  • it ensures that each customer understands the risk associated with day trading, and it will provide each customer with a separate disclosure statement indicating the risks of day trading.

Quest told the OSC that it will screen its clients to ensure they have the appropriate level of knowledge and skill to utilize its day trading services. Quest said it will enable its clients to operate from their homes or offices or from the offices of Quest Capital. It will provide its clients with high speed execution and confirmation systems.

All prospective customers of Quest Capital will be required to complete a know-your-client form and a new account approval form. Prospective customers will also be required to review and execute a margin and short sale agreement.

Prospective customers will be required to sign a specific day trading oriented Customer Acknowledgement form which will confirm that they are opening an account with Quest Capital, acknowledging that day trading is speculative and that it is possible to lose all their money. Customers will be required to provide a minimum initial deposit of US$15,000 to open an account. A customer will not be permitted to trade if his or her account is below US$10,000.

Quest said the software used by its customers will not permit over-margined trades or improper short sales. Quest will not provide any advice or recommendations to its clients on specific investments, but it will provide all clearing and back office administrative functions.
-IE Staff