Trading forex has become widespread in Canada just as in other parts of the world. In Canada, however, there are specific rules and regulations that must be followed. These might differ from other international laws, so it’s important to understand them well. The laws that have been set in place are to protect the trading population. The Investment Industry Regulatory Organization of Canada (IIROC) and the CSA are just two of the financial watchdogs in Canada. You can trust them, so always look for their names when checking out brokerage firms. Once you know how forex works in Canada, feel free to jump in and begin profitable trading.
Benefits of Trading in Canada
The Canadian dollar (CAD) is one of the major currencies being traded internationally. For this reason, it is a popular pair in forex trading. As far as brokers go, Canadian regulators insist that its brokers be registered multiple times. That is simply because the country has so many different provinces. Each province has its own financial watchdogs and regulations, with various requirements. Even though the main governing body is the CSA, it is the IIROC that handles most of the applications from brokers. As such, any broker wanting to sign up to offer services related to margin must apply to IIROC. To ensure compliance, these regulatory bodies are continually conducting surveillance. One can say that the CSA and IIROC are more interested in the safety of their residents than with customer profits. One outcome of their intense surveillance is to reduce the amount of leverage that a broker can offer a client. While this is a questionable safeguard, it is in place to help traders stay out of trouble.
Best Security
It is true that the regulations governing forex in Canada are very stringent. Thanks to the wide range of experience and healthy budgets, the regulators are able to keep a close eye on brokerages. If there is a scam going on, they will probably uncover it. However, one of the unique trading opportunities in Canada is that brokers don’t need to be physically located within the country. So if you are a Canadian and considering trading forex, you are allowed to choose either a local broker or one who is sitting half way across the world. In practical terms, you can live in Canada but choose a company from New York, London or Shanghai. The world is your playing field!
Choosing a Broker
If you want to sign up with a Canadian broker, the best place to check out the company is with the CSA. The CSA keeps a list of the forex brokers who are registered in Canada. Whether you want to go with a broker from Canada or an international broker, you still need to take the same precautions. Find out who regulates them, no matter what country they are located in. Then go ahead with the typical questions, such as their commission structure, customer support and platforms used.
