TD's credit business will continue to sell vanilla products to clients globally, but its structured credit client business will be limited to Canada, according to the memo. It will retain a global proprietary structured credit effort. In addition, the advanced equity product group will be closed, but vanilla equity options trading will continue from London, Tokyo and Chicago. Dorrance added the Canadian house will not continue its Asia expansion.
TD took the decision after it reviewed the economics of the derivatives group and found it did not meet profitability objectives. Dorrance's memo said, "We do not believe we can attain the scale needed to carry the high infrastructure costs that are necessary due to the changing regulatory and accounting environment and the current scope of our business." The memo noted, however, "This change is not about reducing the size of the Wholesale Banking Segment or the capital allocated to it."