Fidelity Investments opened Fidelity Clearing Canada in Toronto Thursday, revealing plans to expand its base of broker/dealers. The business will provide clearing, custody and back-office services to both Canadian-based brokerage firms and the Canadian arms of brokerage firms based in the United States, that already clear through National Financial, Fidelity’s U.S.-based clearing branch.

The chief executive officer of the new firm is Richard Ness, who has a background in Canadian brokerage firms, with 25 years of experience in that nation’s marketplace. Ness was the former CEO at Penson Financial Services, a clearing firm based in Toronto and Dallas. He left Penson two years ago to found Tactico, a full-service business advisory and consulting firm in Toronto and Montreal.

Fidelity Clearing Canada has been in the works for a little less than a year, said Rich Hart, senior vice president at National Financial. National Financial provided capital, while Tactico established the firm on National Financial’s behalf. National Financial then purchased the firm on Sept. 1.

“The business plan is to attack both sides of this at the same time,” Hart said. “Our U.S. team will be focused on the U.S. customers and the Canada team will be focused on the 200 broker/dealers [that are] up here in Canada.” The broker/dealers in Canada truly run the gambit, Hart says. They range from institutional broker/dealers to wealth management independent rep-type broker-dealers and everything in between.

Two broker/dealers have already come on board to the Fidelity Clearing Canada platform—Integral Wealth Securities in Toronto and execution specialist JitneyTrade. According to the company’s website, JitneyTrade previously cleared through Penson Financial Services Canada, the former firm of Ness.

Penson is the only other clearing firm in Canada that also has offices in the United States. As of June 30, 2009, National Financial served more than 300 broker-dealers in the U.S. with assets of more than $520 billion. Up to 10% of National Financial’s clients either are considering creating or already have operations in Canada, says Fidelity spokesman, Steve Austin. 

At this time, there are no immediate plans for Fidelity Clearing Canada to help Canadian broker/dealers break into the American market. But, Hart insists the new firm would help any client hoping to do so.


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