I own shares of Toronto-Dominion Bank (NYSE: TD) and Bank of Nova Scotia (NYSE: BNS), so I'm fond of both companies. However, TD Bank is facing a unique regulatory headwind that might bother more conservative investors. Although Scotiabank has its own problems, it isn't facing the same regulatory issues and has a higher yield. If you are considering investing in TD Bank, you might actually prefer Scotiabank.

Both TD Bank and Scotiabank hail from Canada. The Canadian banking sector is highly regulated. There are two key takeaways from this fact, First, Canadian banks tend to operate in a fairly conservative manner. Second, regulators have basically protected the industry's largest companies from competition, so the biggest banks are largely entrenched. TD Bank and Scotiabank are two of the largest banks in Canada.

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Source Fool.com