Forex trading has evolved over the past few decades to become the most valuable financial market in the world. With over $6 trillion traded in the market daily, the online forex market has developed and has become accessible and easier even for new and aspiring traders and investors to venture into the market and trade their preferred currency pairs.
Forex brokers are credited with making the forex market more accessible to everyone globally. This is especially true for Canadians as their native currency, the Canadian dollar is one of the leading currencies in the world. Canada is also one of the leading forex trading nations in the world, which is why we will talk about the top brokers that provide services to forex traders worldwide.
Fortrade is one of the leading forex brokerage platforms in the world. The UK-based forex and CFD broker was established in 2013 and has gained an international foothold, with traders and investors signing up in all parts of the globe, including Canada. As one of the leading brokers, Fortrade provides its clients with a user-friendly trading environment that makes it easy for both newbie and advanced traders to access the financial markets. In addition to forex, Fortrade provides access to a wide range of financial markets, including stocks, indices, precious metals, U.S treasuries, energy products, and agricultural products. The wide range of trading features and tools makes it easy to conduct technical and fundamental analysis of the investment products offered by Fortrade. The broker is regulated by the Investment Industry Regulatory Organization of Canada (IIROC). It is also regulated by other agencies, including the U.K.’s Financial Conduct Authority (FCA), NBRB, and ASIC.
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EasyMarkets is a leading online forex and CFD broker that allows people to trade a wide range of financial markets. It has a global presence and allows Canadian traders to access various assets like cryptocurrencies, forex, stocks, commodities, and indices. As a leading broker, EasyMarkets has become popular for providing unique services to its clients, including numerous trading tools, educational materials, intuitive trading platforms, market analysis, effective customer care, and news content. All these services are available to EasyMarkets customers all over the world. EasyMarkets is not currently regulated by the IIROC but they do accept Canadian investors. EasyMarkets is a Marshall Islands-registered company, and it is also regulated by the Cyprus Securities and Exchange Commission (CySEC) as well as the Australian ASIC regulator. As a registered and regulated entity, Canadian traders can be confident that their funds and personal data are safe with this broker. The fact that they deploy extra security measures to protect customer assets and information. makes them one of the best brokers to consider.
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F.P. Markets is a fully regulated online Forex and CFD broker that is dedicated to making it easy for traders and investors all over the world to access a choice of financial markets. The platform provides users with access to various financial markets, including forex, cryptocurrencies, stocks, commodities, metals, indices, and futures options. What makes F.P. Markets one of the best options for traders is the availability of numerous features such as a daily market report, video tutorials, economic calendar, market analysis, trading platforms, customer support, and more. All these features make it easy for traders to effectively trade forex and other CFDs with ease and earn huge profits in the process. Canadians are safe to use F.P. Markets because it is a regulated broker, which makes them a legitimate broker operating in the country. The broker is regulated by the Australian Securities and Investments Commission (ASIC), which allows them to provide services to customers in various other countries. Their strict adherence to KYC and AML policies help ensure that customer funds and private information remain safe at all times.
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eToro has been one of the leading forex and CFD brokers in the world. Established in 2007, eToro is considered one of the best social and copy trading brokers. Thanks to its Open Book feature, eToro allows investors and traders to rack, follow and copy the best performing traders on their platform, making it easy for newbie traders to become successful traders. In addition to forex, eToro provides access to other financial markets, including stocks, cryptocurrencies, commodities, and indices. eToro is characterized by low trading fees for other asset classes and free stock trading. In essence, it continues to set the standard in the forex trading scene with its professional-grade features in addition to numerous handy tools and trading resources. eToro, like some of the other brokers here, is not regulated by IIROC, yet Canadians can trade with this broker. It is, however, regulated in other territories such as in Europe by the CySEC and the FCA (Financial Conduct Authority), in Australia by ASIC, and in the U.S by FinCEN (The Financial Crimes Enforcement Network).
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AvaTrade is a global online Forex and CFD trading platform that has been around since 2006. The platform provides services to over 200,000 clients globally, allowing them to access the forex market with ease. They also provide access to other financial markets, including cryptocurrencies, stock, indices, commodities, ETFs, and bonds, and treasuries. Although it took a few years before AvaTrade really took off, it has experienced enormous growth over the past few years and currently records over $60 billion in trading volume per month. AvaTrade has been able to achieve this because of the various investment instruments, features, and trading tools available to the traders. AvaTrade is regulated in Canada by the IIROC via Friedberg Mercantile Group Ltd., making it a legit forex broker in the country. It is also regulated by other major regulators such as the Central Bank of Ireland, B.V.I. Financial Services Commission, ASIC, South African Financial Sector Conduct Authority, FSA, FFAJ, Abu Dhabi Global Markets (ADGM), and the Financial Regulatory Services Authority (FRSA).
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Forex Regulations in Canada
Although forex trading is legal in Canada, the country has strict regulations guiding the sector. Canada has fifteen different regulatory bodies which regulate the Forex market including the Canadian Securities Administrators (CSA), the Investment Industry Regulatory Organization of Canada (IIROC), as well as 13 provincial and territorial regulators. For Canadian forex brokers, having 15 regulators can complicate operations yet it does provide excellent protection for traders. The CSA is the umbrella regulator for all the provincial and territorial regulators across Canada and all active brokers in the Canadian forex market must be regulated by the Investment Industry Regulatory Organization of Canada (IIROC).
What is the IIROC?
IIROC is the Investment Industry Regulatory Organization of Canada. It is a Canadian national body tasked with regulating the financial markets in Canada. IIROC has been around for decades and is extremely popular within the financial space. Despite IIROC regulating the financial markets at the federal level, Canada has provincial regulatory agencies that also carry out similar tasks in their various regions. The Ontario Securities Commission, the British Columbia Securities Commission, and the Autorité des Marchés are the three regulators that handle financial markets regulations in their various provinces.
Canadian brokers have to register with IIROC before they can provide services to traders in the country. Every broker providing services that involve trading forex pairs is considered an investment deal, which falls under the jurisdiction of the IIROC. The regulatory body has set leverage limits to 18:1, which hampers the profit potential for some leading forex traders in the country.
The IIROC ensures that regulated brokers only higher qualified individuals. The requirement trickles down from the management team to the salespeople. All of them have to prove that they are experts in forex tracing contracts and are qualified futures traders. The asset portfolio managers also have to be adequately qualified, which is excellent information for Canadian traders because it means people setting up a business in the forex trading sector are highly qualified to offer their services.
The IIROC handles various responsibilities, such as:
- They conduct periodic reviews of regulated platforms. IIROC checks the platforms of brokers and their procedures, they provide them with appropriate advice, and ensure that they comply with all relevant regulations put in place.
- IIROC rolls out rules that ensure that the investment industry maintains the highest standards possible.
- IIROC screens the employees of financial service providers to ensure that they are well trained, have the required educational qualifications and have clean backgrounds.
- Set minimum requirements for brokers, such as the working capital and more.
- Investigate misconduct when a broker misbehaves. IIROC has the power to launch disciplinary proceedings and impose penalties, fines, suspensions, permanent bans, or termination of membership if a broker does not follow the set regulations.
How to Find Out If a Broker is Regulated by the IIROC
If you are interested in signing up with a Canadian broker and you are worried if your preferred broker is regulated with the IIROC, worry no more. There is a very easy-to-use search option on the Commission’s website, and we highly recommend taking the time to check if the broker you wish to partner with is really registered with the IIROC. Performing your own due diligence is vital, as the fact is, many forex brokers claim to be regulated when they simply are not. You can quickly check a broker’s regulatory claims and find details relating to registration, approval, and whether there have been disciplinary issues on the IIROC site.
The Difference Between a Regulated Broker and a Non-regulated Broker
As a trader, you have to be careful when trading with a non-regulated broker because the disadvantages are numerous. However, trading with regulated brokers provides many benefits. Even if a broker is not regulated by the IIROC, but they are regulated by other leading regulators such as the CySEC, these are the brokers you should consider partnering with. Here are the differences between regulated and non-regulated brokers:
Security of Funds and Personal Data
One of the most crucial benefits of trading with a regulated broker is that you get to enjoy the maximum security of your funds and personal data. This is because regulated brokers have a standard to follow. For instance, Canadian brokers have a certain standard they have to adhere to at all times if they are to avoid penalties or permanent ban from IIROC and other regulatory agencies. Hence, regulated brokers provide maximum security on their websites and trading platforms that protect your funds and personal data from hackers and other bad actors.
Trading Within the Confines of the Law
Regulated brokers offer their services in line with the requirements of the financial laws. This means that a regulated broker will offer secure and transparent trading services.
Insurance in Case of Losses
Regulated brokers usually have insurance to cover losses in case something happens to their operation. As a result, trading with such brokers means that your funds are secure, and you will get a refund in case something goes wrong and the broker closes down.
What Are the Limitations of Such Tight Canadian Regulation?
Although it is meant to protect investors and traders in Canada, the tight and unharmonized trading regulation causes limitations to the growth of the forex trading sector in the country. The limitations are as follow:
While the IIROC regulates Canadian brokers at the federal level, they are regulated at the provincial level by the other regulators. This means that Canadian brokers have to contend with following two or more different rules, making it harder for them to implement each one adequately. The lack of harmony in regulation also makes it tough for some leading brokers to provide services in Canada, hence, limiting the options that Canadian traders have in terms of the number of brokerage services available to them. The best solution to the tight regulation problem is to have a unified framework that would ensure that the rules are applicable in all parts of the country, making it easy for both the traders and the brokers to carry out trading activities in the country.
Lower Profit Margin
The tight regulation means that Canadian traders will have lower profit margins than their counterparts in other parts of the world. The IIROC has set maximum leverage of 18:1 for all Canadian brokers, which means that they cannot offer above that for forex and other investment products. While traders in other parts of the world get to enjoy leverage of 1:400 and mores, Canadian traders will earn far less on similar trades due to the tight regulations.
What Are the Advantages of Such Regulation?
The tight regulations on brokers in Canada have various benefits to both the brokers and the traders in the country. Some of them include:
The tight regulations in Canada mean that brokers operating in the country have to implement strict security measures, thus, ensuring that the private data and the funds of the customers are safe and secure at all times. The trading platforms would also be secure to ensure that traders have access to a secure and transparent trading environment. IIROC carries out regular checks of the brokers to ensure that they comply with all the regulations put in place. These brokers also need to have insurance to ensure that the clients are refunded in case something happens to the company.
Thanks to the tight regulations, Canadian brokers need to hire properly qualified professionals on their teams. This means that traders will be dealing with highly trained and educated professionals, which translates to excellent service for traders and well-managed brokerages.
Canada is one of the top forex trading countries, thanks to the large liquidity and wide choice of top forex brokers. In addition, due to the tight regulations in the country, brokers are required to follow some stringent rules before providing services to their clients. The brokers listed in this post are some of the top brokers for 2020 you can find in Canada. They offer top-quality services and are regulated by leading regulators in the country. If you want to step into the trading arena, look no further than one of these top brokers to partner with.
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