SureTrader - Providing sensitive information

[conduit]

If they provide access to US listed stocks then yes they would also have to adhere to PDT rules and enforce them towards their clients at least what concerns the trading in US equities . If they don't then they set themselves up for regulatory trouble. Simple as that

• You took my response out of context - it was in reply to Max Dup's inquiry about TD Canada Trust.
  
• I'm with BMO Investorline and TD Canada Trust - the PDT rule doesn't apply with either broker in Canada.
• Perhaps the PDT rule applies with other brokers in Canada.

 

[Gotcha]

Looking to get to the bottom of this PDT rule for Canadians.... I get to this link:

https://www.interactivebrokers.ca/en/?f=/en/general/education/faqs/canadaFAQs.php?ib_entity=ca

Two different FAQ questions, one right after the other seem to totally contradict. So who knows.


How does the SEC day trading rule affect Canadians?
The day trading rule doesn't affect IB Canada accounts.

For the SEC day trading rule, does the $25,000 need to be in Canadian dollars or US Dollars?
The funds may be in Canadian dollars, so long as they are the equivalent of 25,000 USD or more.

 

[conduit]

Who knows? Simple. Please check with FINRA and the SEC. Would you rather double check your broker is legit and follows regulatory rules or potentially wire funds into a black hole that might get frozen during an investigation? Your choice entirely

Looking to get to the bottom of this PDT rule for Canadians.... I get to this link:

https://www.interactivebrokers.ca/en/?f=/en/general/education/faqs/canadaFAQs.php?ib_entity=ca

Two different FAQ questions, one right after the other seem to totally contradict. So who knows.


How does the SEC day trading rule affect Canadians?
The day trading rule doesn't affect IB Canada accounts.

For the SEC day trading rule, does the $25,000 need to be in Canadian dollars or US Dollars?
The funds may be in Canadian dollars, so long as they are the equivalent of 25,000 USD or more.

 

[ScalperJoe]

This is from the SpeedTraders' website:

"SPEEDTRADER ACCEPTS APPLICATIONS FOR MARGIN AND OPTION ACCOUNTS ONLY NO CASH ACCOUNTS ACCEPTED – MINIMUM DEPOSIT $15,000 FOR US AND $25,000 FOR FOREIGN CLIENTS. Day Trading Accounts : There is a $25,000 minimum required to establish a day trading account. Accounts that fall below the required minimum will be subject to certain restrictions, and additional funds may be required. Speedtrader does not currently offer debit card and/or checking accounts."

If the PDT rule applies only for US, why is the minimum deposit 15K for US and 25K for foreign (let's say Canada)?

The PDT rule is a FINRA rule, so it will apply to broker/dealers who are subject to FINRA regulations. SpeedTrader is a U.S. based broker/dealer, therefore it must follow the PDT rules. If SpeedTrader is claiming its minimum deposit is $15,000, that does NOT imply that you can subvert the PDT rules by only having $15k. It implies that to OPEN the account you'll need 15k, but if you were to get flagged as a PDT, then you'll need to have $25k.

Indeed, from your post, SpeedTrader clearly says "There is a $25,000 minimum required to establish a day trading account." Also, it seems from their site, SpeedTrader has tighter controls on margin if you place a larger percentage of your account in one security.

http://speedtrader.com/info-forms/margin-requirements/

Regarding SureTrader (Bahamas), it's NOT a FINRA registered broker/dealer, it's a BAHAMAS based broker/dealer, regulated by the Securities Commission of the Bahamas, and therefore it has its own rules regarding margin.

You can read about FINRA rules for margin and pattern day trading here:

https://www.sec.gov/investor/alerts/daytrading.pdf

 

[ScalperJoe]

Looking to get to the bottom of this PDT rule for Canadians.... I get to this link:

https://www.interactivebrokers.ca/en/?f=/en/general/education/faqs/canadaFAQs.php?ib_entity=ca

Two different FAQ questions, one right after the other seem to totally contradict. So who knows.


How does the SEC day trading rule affect Canadians?
The day trading rule doesn't affect IB Canada accounts.

For the SEC day trading rule, does the $25,000 need to be in Canadian dollars or US Dollars?
The funds may be in Canadian dollars, so long as they are the equivalent of 25,000 USD or more.

Looks like whoever wrote the FAQ's at IB overlooked the obvious contradiction, lol! It's definitely unclear from those two answers.

I checked the TD Ameritrade site in Canada and they have their own margin rules. I couldn't find anything regarding PDT rules for Canadians.

https://www.td.com/ca/products-services/investing/td-direct-investing/accounts/margin.jsp

 

[conduit]

Even a Bahamas regulated broker still needs to enforce the PDT rules on its customers if it offers trading in US listed equities and a customer via his trading pattern becomes subject to the rule.

The PDT rule is a FINRA rule, so it will apply to broker/dealers who are subject to FINRA regulations. SpeedTrader is a U.S. based broker/dealer, therefore it must follow the PDT rules. If SpeedTrader is claiming its minimum deposit is $15,000, that does NOT imply that you can subvert the PDT rules by only having $15k. It implies that to OPEN the account you'll need 15k, but if you were to get flagged as a PDT, then you'll need to have $25k.

Indeed, from your post, SpeedTrader clearly says "There is a $25,000 minimum required to establish a day trading account." Also, it seems from their site, SpeedTrader has tighter controls on margin if you place a larger percentage of your account in one security.

http://speedtrader.com/info-forms/margin-requirements/

Regarding SureTrader (Bahamas), it's NOT a FINRA registered broker/dealer, it's a BAHAMAS based broker/dealer, regulated by the Securities Commission of the Bahamas, and therefore it has its own rules regarding margin.

You can read about FINRA rules for margin and pattern day trading here:

https://www.sec.gov/investor/alerts/daytrading.pdf

 

[1245]

Hey guys, I'm just getting started with day trading. Since I don't have 25k (or 15k) to create a SpeedTrader account, I'm just going to create a SureTrader account.

I am astonished at all the very sensitive information that needs to be provided when creating an account. It makes me very uncomfortable to say the least. Is this something all traders have to go through? Is it common for all trading websites? Is it secure?

Thanks for the help!

-Max

It is called the know your customer rule.

 

[ScalperJoe]

Even a Bahamas regulated broker still needs to enforce the PDT rules on its customers if it offers trading in US listed equities and a customer via his trading pattern becomes subject to the rule.

TD Ameritrade Canada doesn't mention the PDT rule on their site, however it's probably because it assumes you're only trading stocks listed in Canada.

It may also explain the contradiction in IB's FAQs. Another thread regarding IB has posts where traders say they don't have PDT rules for Canadians, yet traders also claim that they DO have to follow PDT if they trade U.S. listed stocks, even if they're in Canada!

According to FINRA documents, it says "member firms" must implement the rule, and by that they are probably referring to any firm that is a member of FINRA. Exchanges that list stocks are members. However, SureTrader isn't a FINRA member. If brokers are providing access to stocks that are listed on member exchanges, then it would make sense for TD Ameritrade Canada, IB Canada, AND SureTrader to enforce the rule.

I guess the best way for anyone looking to open an account is to contact SureTrader, since they're obviously neither in Canada nor the U.S.

 

[conduit]

If the brokers in question offer access to US equities then either they are members and hence need to enforce PDT on their clients or else route orders through members and are still forced to do the same. In either way trading US stocks subjects one to the PDT rule if the pattern is established. If a broker does not enforce it then it is either in violation of member rules or else violates it's contract with a member it routes through. The real question is whether such broker really exists and whether it can get away with it.

TD Ameritrade Canada doesn't mention the PDT rule on their site, however it's probably because it assumes you're only trading stocks listed in Canada.

It may also explain the contradiction in IB's FAQs. Another thread regarding IB has posts where traders say they don't have PDT rules for Canadians, yet traders also claim that they DO have to follow PDT if they trade U.S. listed stocks, even if they're in Canada!

According to FINRA documents, it says "member firms" must implement the rule, and by that they are probably referring to any firm that is a member of FINRA. Exchanges that list stocks are members. However, SureTrader isn't a FINRA member. If brokers are providing access to stocks that are listed on member exchanges, then it would make sense for TD Ameritrade Canada, IB Canada, AND SureTrader to enforce the rule.

I guess the best way for anyone looking to open an account is to contact SureTrader, since they're obviously neither in Canada nor the U.S.

 

[Hooter]

Have an account w S-trade for a couple years. I am a U.S. citizen. It hasn't been a problem. Since you are a Canadian, there are other offshore brokers that might better serve you. There is another firm in Bahamas that has no PDT rule, low account min and offers free limit orders.