A Bay Street sign is seen in the financial district in Toronto in this file photo.Mark Blinch/The Globe and Mail
Fidelity Canada is opening a trading desk in Toronto in order to gain competitive advantages in the marketplace including closer proximity to the deals on Bay Street.
"As the Canadian business has become bigger and more successful, we thought what other elements do we want to do in Toronto that would help that success; and historically, the assets that were managed here were traded in Boston," says Andrew Wells, vice-chairman of Fidelity Canada.
A trading desk is an important part of the investment process for fund managers as it providers information on capital markets activity including IPOs and new issues, he added.
The desk is expected to launch in early 2018 and will not only trade securities for the assets managed here in Canada (currently handled by the desk in Boston) but also some of Fidelity's international business.
In London, Fidelity's trading desk handles both North American and Latin American securities, assets that make more sense to trade in the right time zone, Mr. Wells says.
Fidelity International will shift the trading of all Canadian securities, U.S. securities and Latin American securities for the international business to the Toronto desk. The desk will also trade U.S., Canadian and Latin American securities for the Canadian business.
The Toronto office will open with approximately five locally hired traders – as well as an additional trader from the London office and another from the Boston desk. There will be an additional 15 employees including support staff.
"This will allow us to improve how we go after interesting equities, whether it's in the mid-cap space or the small-cap space, we are able to build a position with a broker, and be able to negotiate around the price," Mr. Wells says. "That is where the real value-add is in having a local trading desk."
Fidelity Canada has been rapidly expanding its Canadian operations, bringing on more than 260 employees over the past year, to a total of 1,160. The company now manages $136-billion in assets under management in 188 funds; it is expected to be entering the exchange-traded funds industry in 2018.
Clare O’Hara