Trading platforms / social trading platforms / signal following
FinTechs belonging to this category operate trading platforms or online marketplaces for investment opportunities or certain financial contracts – e.g. securities, factoring etc. and sometimes furthermore provide contact to financial experts and tools for the decision-making.
FinTech-signalling and social trading platforms provide users with the opportunity to exchange opinions on financial investments and offer signal providers and traders the possibility to make their securities portfolio publicly visible. This way the portfolios can be linked to and followed by other traders via the platform automatically, so that the trading and investment strategy of the followed traders can be copied.
The platform often cooperates with a financial services provider or a credit institution where both the trader and the follower hold their securities accounts, and which execute the orders both of the trader and the follower and to which the platform passes on the trading decisions.
Attitude of the country towards trading, social trading or signalling platforms
The social climate towards trading is increasing in popularity and demand. The political climate varies between the federal government and provincial governments.
Obligations and requirements to provide trading, social trading or signalling platforms described above
This is a big question. Obligations vary from province to province given securities regulations are provincial in Canada. Legal costs to obtain a market place exchange license would approximate $250,000 or could be less depending on the sophistication of the client. Every provincial securities regulator has a vast array of regulations to review and comply with. Big issue for FinTech entities is sourcing a trust entity or custodian as required by regulations. Financial reserve requirements vary from $250,000 to $2,000,000 depending on the type of application (Restricted Dealer or Marketplace Exchange. Must soon register with IIROC and FINTRAC).
Additional comments regarding the legal situation for trading, social trading or signalling platforms or what FinTech’s must be aware of in this business area
Market size for trading, social trading or signalling platforms and biggest companies in this business area
Market size for trading is in excess of $4 Billion. There are numerous participants. By market share, TSX is the largest.
Additional comments regarding the economic situation for trading, social trading or signalling platforms or what FinTech’s must be aware of in this business area