The Canadian discount brokerage market this week saw one of the players officially exit by selling their Canadian operations. Virtual Brokers announced today that they will be buying out OptionsXpress Canada effectively signaling the end of OptionsXpress in Canada and shrinking the number of big discount brokerages by one. The business agreement is set to take effect on December 1st pending regulatory approval.
OptionsXpress Canada, which is owned by American discount brokerage Charles Schwab, had put their Canadian business under review in September and halted accepting new Canadian clients. The fact that Canada’s discount brokerage industry is shrinking in not entirely a surprise given the size of the Canadian market and the number of competitors battling for their share of the investor pie. With investor sentiment keeping many out of the markets as well, discount brokerages have faced some major headwinds in trying to gain new business.
For Virtual Brokers, the additional accounts will provide a lift to their business, assuming they can hold on to the new accounts. Those used to the OptionsXpress platform and suite of services may be on the hunt for something similar. Also, Virtual Brokers is already working through the recently announced decision to move the back office functions of trade clearing away from Penson and bring it in-house. While they may be busier than usual, the official statement from Virtual Brokers (which can be found in the following news release) suggests this is another big stride in their race to deliver a competitive experience for consumers.
do I need to open an option account with virtual brokers