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Our forex trading experts have suggested the best forex brokers with IIROC regulation for Canadian traders. Learn about the Investment Industry Regulatory Organization of Canada and other regulatory bodies in Canada and trade CFDs, currency pairs and other financial instruments with confidence.
View the top 4 forex brokers regulated IIROC below:
By David Levy / Updated: Monday, March 23rd, 2020
Here are the Best Forex Brokers In Canada With IIROC Regulation:
Forex market regulation is one of the key factors, which our team takes into account when assessing Canadian Forex brokers. If we are to focus on the regulatory environment in Canada, we should point out that there are 15 different organizations that supervise the Forex market. Among these the top regulatory bodies are the:
In terms of regulation, the respective organizations in Canada treat Foreign Exchange either as a security or as a derivative. However, we should note this brings about different types of regulation since organizations have to enforce regulatory framework at the provincial and territorial level along with the regulatory framework at the federal (national) level. This creates a bit complex environment that, to a certain extent, makes it quite challenging for a business entity to decide whether to function as a Forex broker in the local market or as an advisor.
For example, Autorite des marches financiers (AMF) supervises the Quebec financial sector activity and under its provisions, regulated brokers need to provide further protection to Quebec residents.
In this section, our team of experts will try to outline what are some of the IIROC duties and how it can benefit Canadian traders. Aiming to ensure fair market environment and financial stability, the IIROC acts as the main Foreign Exchange regulatory body, which is empowered to supervise business activities of Forex brokers and advisors that operate in the local Forex market.
The IIROC has the authority to carry out:
One major objective of Forex market regulation is to ensure client protection. In this line of thought, similar to other regulatory bodies across the globe, IIROC enforces a system of rules aimed to prevent the insolvency of brokers it regulates. In doing so, the organization imposes minimum capital requirements for the scope of brokerages’ business operations, conducts strict monitoring of brokers’ financial condition and also requires them to carry out comprehensive financial reporting.
IIROC also postulates that clients’ assets are kept fully segregated from the assets of brokerages, which minimizes the risk of customer funds being lost in case of insolvency or bankruptcy, and also reduces the probability of those funds being used by brokerages inappropriately (as operating capital or budget for marketing campaigns, for instance).
Client accounts, that are held at IIROC-regulated investment intermediaries, are also safeguarded by the Canadian Investor Protection Fund (CIPF) within particular limits.
We should note that IIROC-regulated investment firms are members of the CIPF. Thus, if it occurs that customer funds are missing because of a firm’s insolvency, the shortfall will be covered by the CIPF. The Fund provides coverage of up to CAD$1 million per account.
Last but not least, IIROC requires that brokerages must have proper procedures to supervise customer accounts and all their clients’ activities, while also complying with stern Know Your Customer and Anti-Money Laundering policies.
The IIROC has imposed restrictions on the maximum leverage, which could be offered to retail clients by Canadian Forex brokers. At present, the maximum leverage allowed stands at 1:45 to 1:50 and can be reviewed or changed by the regulatory authority. Forex brokers that are based in Canada may offer the highest leverage only on currency pairs including CAD, but they could reduce it depending on the liquidity of other currency pairs in their product offerings.
Interactive Brokers – Best for ECN TradingEstablished in 1978 by its Chairman Thomas Peterffy, Interactive Brokers Group has an office in Montreal, Quebec and functions as an “all-in-one” brokerage providing:
IB caters to both professional and institutional traders for a range of asset classes and derivatives such as stocks, bonds, foreign exchange, metals, commodity futures, options, ETFs and Mutual Funds internationally.
Among the many entities operating under the parent company, Interactive Brokers LLC is regulated by the US Securities and Exchange Commission (SEC) and by the Commodity Futures Trading Commission (CFTC), while Interactive Brokers Canada Inc is a member of the Investment Industry Regulatory Organization of Canada and of the Canadian Investor Protection Fund.
Interactive Brokers (IB) allow Canadian citizens access to a range of small-cap, mid-cap and large-cap domestic and international stocks from a single account at low brokerage fees.
The company offers three types of pricing plans to suit its clients’ needs:
IB’s Tiered Pricing plan features low broker commission, which diminishes based on trade volume. The plan also includes exchange, regulatory and clearing fees.
The following table shows commissions charged on trading US stocks:
As for trading in Canadian stocks and ETFs, IB will charge commissions as follows:
Note * IB’s Fixed Rate Pricing plan features a fixed fee charged per share or a particular per cent of the trade value. The plan also includes exchange and regulatory fees.
Stock trading comes with different fees as follows:
On the other hand, IBKR Lite pricing plan allows for unlimited trading of US-listed stocks and ETFs with no commissions charged.
IB allows for direct market access to financial markets through a range of platforms:
access all the resources they need to monitor and manage their accounts with a single login to one website,Canada-based traders are able to have their orders executed at the best possible price via IB’s SmartRouting engine. The latter explores the best stock, option and combination prices available at the moment clients place their orders and looks to immediately fill those orders electronically.
Last year, the brokerage insured average savings of $6.70 per trade for its clients, and after taking into account average commissions charged, the average net benefit for clients amounted to $4.42 per trade.
Forex.com – Best For Currency PairsEstablished in 1999 and based in New Jersey, GAIN Capital Holdings Inc grants access and offers trade execution services in Foreign Exchange for retail investors. The company owns global CFD and Forex brands Forex.com and City Index and, along with its subsidiaries, it is regulated in several jurisdictions across the globe, including:
GAIN Capital Holdings Inc is a publicly-traded company, listed on the New York Stock Exchange (NYSE: GCAP). Among the top 20 regulated Forex brokers in Canada, which our team reviewed, Forex.com offers the most extensive range of currency pairs.
With Forex.com, Canadian forex traders are granted access to 84 major, minor and exotic currency pairs and can take advantage of competitive spreads, starting from 0.8 pips on majors such as EUR/USD, USD/JPY and AUD/USD. The minimum and typical spreads offered on other popular pairs are presented as follows:
Note* Canadian traders can trade the USD/CAD pair using a maximum leverage of 50:1. Additionally, traders can gain access to +200 CFD instruments on popular equities, commodities, and indices.
Due to its cutting-edge technology and deep network of liquidity providers, Forex.com delivers accurate pricing and outstanding execution of trade orders, with average execution speed being 0.05 seconds. The broker discloses more details on its Execution Scorecard:
Canadian Forex traders who demand exposure to deep Forex liquidity pools will probably find Forex.com’s Direct Market Access (DMA) Trading Account as suiting their preferences. This account enables them to:
Clients who trade on a DMA account will pay no spread to the brokerage. Additionally, they can benefit from commission discounts depending on their trade volume. Or, the more they trade, the greater the discount they will receive during the next month.
Let’s consider a simple example:
OANDA – Best For Maximum LeverageEstablished in 1995, OANDA Corp is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the US Commodity Futures Trading Commission and is also a member of the National Futures Association. The company provides financial services such as:
OANDA (Canada) Corp ULC is authorized and regulated by the IIROC, while OANDA Australia Pty Ltd is regulated by the ASIC.
Among the top 20 regulated Canadian Forex brokers we reviewed, OANDA (Canada) Corp offers the best maximum leverage conditions. Canada-based retail investors are able to take advantage of maximum leverage of 1:50 when trading high-risk derivative instruments (CFDs) on major currency pairs and maximum leverage of 1:20 when trading CFDs on minor currency pairs.
Margin requirements will be different depending on the base account currency. For a Canada-based trader using CAD as her base account currency and maximum leverage of 1:50, the margin requirements for Foreign Exchange trades will be as follows:
Canada-based investors are able to open two types of accounts with OANDA (Canada) Corp:
Unlike other regulated Forex brokers in Canada we reviewed, OANDA has no minimum deposit requirement for clients to open an account with the company. This is valid for the broker’s Standard Account. However, we should note that Canadian traders will have to ensure sufficient funds in their trading account to meet OANDA’s margin requirements.
If Canadian clients choose to open a Premium Account with the broker, they will have to ensure an initial deposit of USD 20,000 (or the equivalent in local currency).
A comparison between the two Oanda account types can be observed in the table below:
As for base account currencies, OANDA allows deposits made in 9 different base currencies:
Note* OANDA also offers a FREE demo account for Canadian customers.
We should note that, at present, Canada-based retail clients cannot deposit funds into their OANDA accounts by using debit or credit cards.
On the other hand, in case Canadian Forex traders prefer to fund their OANDA accounts by using PayPal, this is possible only if their account currency is CAD. Processing time is up to 1 business day. There is no minimum deposit requirement and no limit for maximum deposits for verified PayPal accounts. For unverified accounts, however, the maximum deposit cannot exceed CAD $1,000.
In case Canada-based retail investors choose to deposit funds via bank wire transfer, again, there will be no limit for maximum deposits. Processing time is between 1 and 3 business days for wire transfers within Canada. As for additional charges, clients may have to pay their bank a fee.
Withdrawals need to be carried out by using the same method, which Canadian retail clients used for their deposit. Withdrawals via PayPal are processed only in CAD and only to personal PayPal accounts (business accounts are excluded). PayPal withdrawals are processed between 1 and 5 business days and are not associated with any fees.
Withdrawals via bank wire transfer require between 2 and 5 business days to be processed. With this method and depending on the account currency, Canadian traders will be charged fees as follows:
| First withdrawal processed within calendar month | Additional withdrawals processed within calendar month | |
|---|---|---|
| CAD | CAD $20 | CAD $40 |
| AUD | AUD $20 | AUD $40 |
| EUR | EUR 20 | EUR 35 |
| CHF | CHF 20 | CHF 40 |
| GBP | GBP 10 | GBP 20 |
| HKD | HKD $150 | HKD $300 |
| JPY | JPY 2,000 | JPY 4,000 |
| SGD | No Fee | No Fee |
| USD | USD $20 | USD $35 |
Friedberg Direct (AvaTrade) – Best for MetaTrader 4 and MetaTrader 5 Trading PlatformsEstablished in 1971, Friedberg Direct is a division of Friedberg Mercantile Group Ltd., which is a member of the IIROC and the CIPF. Friedberg Direct is a discount brokerage division, which provides its clients with direct access to complex high-risk instruments (CFDs) via an array of trading platforms.
Through integrity and innovation, Friedberg Direct aims to ensure the best customer experience, as it offers a diversity of financial instruments on a range of platforms powered by AvaTrade technology. Our team of experts at Compare Forex Brokers maintains the view that Canada-based traders will get the most out of MetaTrader 4 and MetaTrader 5 platforms if they open an account with Friedberg Direct.
Launched in 2005, MetaTrader 4 has become a standard for trading Forex. It allows for customization and flexibility, which makes it an appropriate choice for both beginner traders and professionals with vast experience.
Being user-friendly and easy to navigate, MT4 allows for easy access from:
Based on the native MQL4 (MetaQuotes Language 4) programming language, MetaTrader 4 allows investors to develop a number of custom trading tools and also features Expert Advisor compatibility.
Key features of AvaTrade’s MT4 platform include:
Launched in 2010, MT5 is a powerful multi-functional, multi-asset platform, built on a more advanced MQL5 code compared to its predecessor MT4, which makes it the perfect choice for professional traders who intend to conduct extensive back-testing or operate with complex derivative instruments.
MetaTrader 5 allows for a faster development cycle and easier optimization when professional Forex traders build:
MT5 allows for easy access from PCs, iOS- or Android-based mobile devices and directly on the web. With this platform, Canada-based investors are provided with high-level of security, as all transfers of data are encrypted on the basis of 128-bit keys.
Key features of AvaTrade’s MT5 platform include:
Compare Forex Brokers is a financial portal that strives to provide forex traders of all backgrounds with reliable information. Our detailed Forex Brokers Canada review was conducted by our independent analysts, which based the review on a wide range of factors including:
Only the best Canadian forex brokers have made it into our ranking system. Our proprietary star ranking system ensures that you will avoid the scam FX brokers. The selection of top forex brokers in Canada was narrowed down to only 4 names so forex traders won’t get overwhelmed trying to find a broker to fit their needs.
Risk Warning: Forex trading carries a high level of risk, especially when using leverage, which can magnify both profits and losses. Before deciding to invest in the spot foreign exchange market, make sure you understand how trading on margin works.
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