Exchange rates are fixed later in the afternoon for all foreign exchange transactions that occurred during the day. There may therefore be a discrepancy between the estimated exchange rate quoted to you prior to or at the time of order entry and the actual exchange rate applied to your trade.

Exchange rates quoted to you are based on spot rates and may be adjusted throughout the day depending on market conditions. A foreign exchange rate quoted by Scotia iTRADE prior to or at the time of order placement is an estimated rate of exchange. The estimated exchange rate is based on a benchmark, mid-market rate determined by Scotia Capital Inc. (SCI) at various times of day. At the end of the trading day, SCI determines a single, benchmark, mid-market rate that is used by it to price its holdings of US/Canadian dollar currencies at the end of that day (SCI Benchmark Rate). The SCI Benchmark Rate forms the basis of the exchange rate (inclusive of Scotia iTRADE's spread) applied by Scotia iTRADE to its customers' currency and trade transactions that day.

Foreign exchange rates applied to trades made in one currency and paid for in another currency are not fixed by us or parties related to us (for purposes of the rate charged Scotia iTRADE customers), until late in the afternoon in Toronto, Ontario each trading day. Once fixed, that exchange rate (inclusive of Scotia iTRADE's spread) is applied to all trades made throughout that trading day, except certain trades in our U.S.-Friendly RRSP account, as noted below). This practice is standard in the industry. Scotia iTRADE does not apply its mark-up or spread, over and above the SCI Benchmark Rate, to the foreign currency component of trades in U.S. securities in Canadian dollar denominated registered accounts if the client opts for the U.S.-Friendly RRSP service in respect of the account.

As stipulated above, the exchange rate actually charged by Scotia iTRADE is based on the spot rate charged Scotia iTRADE. The spot rate is a benchmark inter-dealer buy/sell rate that is the basis on which dealers typically set the two-sided exchange rate charged their customers. As is standard in the industry, the exchange rate charged by Scotia iTRADE may vary depending on the size of the transaction, whether the transaction is cash or securities based, the currency being purchased or sold, prevailing market conditions, and other relevant considerations. The exchange rate charged by Scotia iTRADE is competitive with the rate charged by other financial institutions for similar transactions.

In the case of a currency conversion associated with a securities trade, an estimate of the rate that may be charged is disclosed to you on the order entry screen on the Scotia iTRADE website at the time of order placement, or may be obtained by contacting a Scotia iTRADE customer service representative. All trade confirmations issued by Scotia iTRADE disclose to the customer the actual foreign exchange rate applied to the trade, if applicable. All account statements issued by Scotia iTRADE also disclose to the customer the actual foreign exchange rate applied to any foreign currency transaction that occurred during the period covered by the account statement.

As foreign exchange rates quoted during the day are estimates only, there may be a discrepancy between the estimated foreign exchange rate quoted and the actual exchange rate applied at the time of the trade. These discrepancies may occur particularly in times of market volatility. Scotia iTRADE offers a U.S. dollar trading account and a Canadian dollar trading account for customers who wish to trade (and pay for their trades) in the currency of the market in which they trade, thereby insulating themselves from exposure resulting from fluctuations in Canadian/US dollar foreign exchange rates. This enables you to trade U.S. securities in your U.S. dollar account, and Canadian securities in your Canadian dollar account (except for registered accounts, which are available in Canadian currency only). You may also request to withdraw funds from your account either in Canadian or U.S. currency. Scotia Capital and its affiliates are not responsible for the amount of any discrepancy between a foreign exchange rate quoted to the customer prior to or at the time of order entry and the actual foreign exchange rate applied at the time of the trade.

Timing: The actual exchange rate used for your trade is finalized later in the afternoon (ET) on the same trading day. This means the rate you see when placing your order is just an estimate — it might differ slightly from the final rate applied to your trade. The estimated rate is based on a mid-market "spot rate" provided by Scotia Capital Inc. (SCI). This rate can change throughout the day based on market conditions.

Final rate: At the end of the day, SCI sets the SCI Benchmark Rate. Scotia iTRADE then uses this rate — plus a markup called a spread — to all currency conversions for that day's trades.

Why rates may vary: The final rate can vary depending on factors like market conditions, the size of your trade, the currency involved, and whether it's a cash or securities transaction. This is standard practice across the industry.

Exceptions: If you use a U.S.-friendly RESP account, Scotia iTRADE does not add a markup to the exchange rate for U.S. trades in Canadian-dollar registered accounts.

Where you'll see the rate: An estimated rate appears on the order entry screen when you place your trade. The actual rate used will be on your trade confirmation and in your account statement.

Avoiding currency conversions: If you want to avoid exchange rate fluctuations, you can use a U.S. dollar account to trade U.S. securities and a Canadian dollar account for Canadian securities (note: RESP accounts are only available in Canadian dollars).

Withdrawals: You can choose to withdraw funds in either Canadian or U.S. dollars.

Important note: Scotia Capital and its affiliates are not responsible for any difference between the estimated rate you see and the final rate applied.

What is cash from maturing instruments?

Related Articles