Pan American Fertilizer Corp. (fka GFRCF)

[wingtrade]

Canadian Trading FAQ
Q: Why do TSX-listed Canadian companies choose to support cross-border trading in the U.S? Can U.S. investors simply buy shares on the TSX?
A: While U.S. investors are a significant source of trading activity on the TSX, for many investors, trading TSX listed securities through their U.S. brokers involves higher fees for commissions, currency
conversion and custody charges. Additionally, some U.S. institutional funds and investment advisors are unable to buy shares exclusively traded on non-US exchanges, limiting the number of investors Canadian companies can access. Therefore, global companies provide an informed and efficient marketplace through qualifying for the OTCQX marketplace, giving their investors greater convenience and lower fees when they analyze, value or trade their securities with a U.S. ticker symbol in U.S. dollars through a U.S. broker.
Q: Why do U.S. brokers prefer to trade TSX-listed securities in the U.S?
A: For most brokers, there is considerable cost savings to trade and clear global securities in a manner similar to trading domestic securities. By trading in the U.S., brokers can use their existing trading and settlement process that they use for domestic securities, reducing the need for a duplicative trade, clearing, and settlement process.
Perhaps more importantly, having a U.S. ticker gives brokers a better way to advertise the existence of the security as well as their ability to trade the security to their retail and institutional clients.
Q: If investors are able to easily trade a TSX security in the U.S., will that divert some of the liquidity away from the TSX?
A: For companies that have a secondary market in the U.S., they will actually see an increase in their TSX liquidity alongside growth in their U.S. trading. The increased visibility in the U.S. allows a larger pool of investors to analyze, value, and trade their securities, driving more liquidity to the TSX.
Q: When U.S. investors buy a TSX-listed security on the OTC marketplace in the U.S., where does the trade volume get reported?
A: There are three ways in which U.S. OTC trades can be reported:
1. In the U.S. – When a U.S. broker buys or sells via the OTC Link ATS1, either from another U.S. broker or to match a customer order, that trade will be reported in the U.S. only through the FINRA OTC Reporting Facility (ORF). In the case that the other side of the trade is an arbitrageur, they will often make an offsetting trade that is reported in Canada.
2. In Canada - U.S. brokers will take an order for the U.S. ticker from their clients and use a Canadian broker trading directly as their agent on the TSX to deliver best execution for their clients. As part of the clearing and settlement process, trades that are taken and settled in the U.S. are actually cleared and reported in Canada on the TSX. FINRA does not require trades executed directly on foreign stock exchanges to be reported in the U.S.

3. In the U.S and in Canada - In many cases, the initial trade report takes place in Canada, but is brought back to the U.S. by a riskless principal transaction between the Canadian executing broker and the U.S. broker, that is then reported to the FINRA ORF.
Q: What are the benefits to U.S. investors by having the ability to buy TSX listed shares on a U.S. marketplace?
A: U.S. brokers typically charge lower fees and through a U.S. traded security, investors are able to buy and hold the security in U.S. dollars. In addition to lower broker fees, a U.S. traded security provides investors with greater pricing transparency and the ability to access company information through their preferred U.S. market data providers, online brokers and financial portals. Many U.S. brokers have not incorporated TSX market data feeds, thus the U.S. ticker lets investors know the security is available for trading.
Q: If a retail investor uses an online broker to buy a TSX company using the U.S. ticker, and that trade is actually reported in Canada, what will show up in their portfolio – the OTC ticker or the TSX ticker?
A: When investors place a trade using the U.S. ticker, they own the U.S. traded security, which is noted as such in their portfolio. Most retail investors are not aware that their trades are often executed directly on the TSX and reported in Canada.
Q: What is the difference between the OTCQX marketplace and the OTC Pink marketplace?
A: OTC Pink is a broker-initiated, open marketplace for a wide spectrum of companies that provides quotation and trading in over 5,000 securities. However, since OTC Pink does not have any qualification requirements for companies, it includes companies that are shells, economically distressed, or disengaged with U.S. investors.
OTCQX is the best informed and most efficient, quality-controlled marketplace for companies that meet high financial standards and provide the most transparent disclosure. For companies that qualify, OTCQX provides an information-rich marketplace for their investors to analyze, value, and trade
their securities and allows Canadian companies to use their TSX disclosure in lieu of duplicative U.S. SEC reporting requirements. Therefore, many Canadian companies use OTCQX as an alternative to NYSE and NASDAQ. As well, OTCQX offers Level 2 quotes in real-time for free for all investors and also helps companies manage 50-state Blue Sky compliance so that they can access a wider pool of institutional and retail investors. While securities in OTC Pink and OTCQX are both traded on the OTC Link ATS1, securities on OTCQX typically have more broker-dealers, more liquidity, and tighter bid-ask spreads than companies on OTC Pink.