Who’s who in Canadian markets

When you buy and sell securities, your money flows through a network market participants, including:

• Investors – In Canada, there are many kinds of investors. Two kinds of investors include: “retail” investors (individuals investing their own money) and “institutional” investors (including pensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition funds, mutual funds and insurance companies).
• Intermediaries – Intermediaries include dealers and advisers. Dealers buy and sell investments on behalf of investors. Advisers provide advice and manage the portfolios of investors.
• Marketplaces – Marketplaces are where the buying and selling of certain publicly traded securities (for example, stocks, bonds, investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition funds, derivatives, futuresFutures A derivative contract that commits you to buy or sell a commodity, currency or stock market index at a set price on a set date in the future. Unlike an option, you can’t change your mind later; you must do what your contract says you will do.+ read full definition, etc.) takes place. Marketplaces are exchanges and alternative trading systems (ATSs). Canadian stockStock An investment that gives you part ownership or shares in a company. Often provides voting rights in some business decisions.+ read full definition exchanges include the Canadian National Stock ExchangeStock exchange A market in which securities are bought and sold.+ read full definition (CNSX), the Montreal Exchange, the TSX Venture Exchange and the Toronto Stock Exchange. Canadian ATSs include Chi-X Canada, MATCH Now and Omega ATS.
• Information Processors – Information Processors gather and distribute order and tradeTrade The process where one person or party buys an investment from another.+ read full definition information to provide investors and market participants with a single source of such information.
• Clearing Agencies – Clearing Agencies provide a centralized facility to clear and settle trades or act as a centralized depository of securities.
• Issuers – Companies or investment funds that sell securities to investors.

Key players in Canadian markets

To see how the different market participants are connected, use this infographic that shows their relationship and interaction.

High frequency trading

High frequency trading is made possible by the power of technology. It allows for the rapid buying and selling of shares using algorithms that analyze and execute orders depending on market conditions.

Fast facts

High frequency trades made up nearly 40% of the more than 227 million trades executed in Canada for the three months from August to October in 2011. Source: 2011 IIROC HOT Study