Article content continued

The letter then advised the long-term client he had 30 days “from the above date,” to take action. He was also told Scottrade “will be unable to accept deposits or permit opening securities transactions, including orders to buy securities, for your account.” But he was given a few choices: “You will still be able to enter closing orders, transfer your account to another financial institution, and/or withdraw funds from your account.”

The letter concluded with a slight positive: if he decided to transfer his account to another financial institution, the firm “will waive the $75 transfer-out fee.”

So what’s going on?

We called two departments at Scottrade, who essentially gave the same answer. The firm’s national service centre put it down to “recent tax changes and regulations in Canada.” Because of those changes, said the reply, “we’re no longer able to hold accounts for Canadian citizens that don’t also hold dual citizenship in the United States.”

Specifically the note said for a U.S. brokerage to do business with a Canadian citizen, even for one living in the U.S., the firm must meet two criteria: it must maintain a physical presence in Canada; and, it must be registered as a securities broker in Canada.

“Unfortunately, Scottrade does not meet those requirements.”