Forex Brokers and Regulatory Info for Canadian Residents: Difference between revisions
From Volatility.RED
No edit summary Tag: Reverted |
Tag: Undo |
||
| (9 intermediate revisions by 2 users not shown) | |||
| Line 1: | Line 1: | ||
==Brokers for Canadians== | ==Brokers for Canadians== | ||
Canadians have two directions they can go when selecting a | Canadians have two directions they can go when selecting a broker: Locally regulated brokers with Canadian offices, or foreign regulated brokers either with a Canadian office or entirely offshore. | ||
Local | Local brokers are overseen by [https://www.iiroc.ca/ IIROC], Canada's national regulator, and IIROC is responsible for regulating not just forex but most tradable securities in Canada. By choosing a Canadian regulated broker, you'll have a local regulatory body to work with should anything go wrong with your broker. | ||
However, IIROC also sets leverage restrictions pretty aggressively, and on a pair by pair basis, which a lot of | However, IIROC also sets leverage restrictions pretty aggressively, and on a pair by pair basis, which a lot of traders find difficult to work with. The max leverage currently set is 33:1 on CAD crosses, most majors are 30:1 or 20:1, and exotics can drop down to as little as 3:1. These rates adjust frequently as they are set based on recent volatility in the underlying markets, so even a major forex pair that's liquid could see leverage get cut back should volatility increase. The restrictive and minimal leverage is one of the larger drawbacks to an IIROC regulated broker. | ||
Most locally regulated | Most locally regulated brokers will be part of the [https://www.cipf.ca/ CIPF], which insures client deposits in the event of broker insolvency. The max coverage per person (across all accounts,) is one million CAD. This is one of the most expansive protection insurance programs in the world for investors. | ||
=="Onshore" | =="Onshore" Brokers== | ||
Brokers with offices physically in Canada and who are registered and licensed by Canadian regulatory authorities (IIROC.) These brokers will typically be part of the CIPF program and offer some insurance against the broker going bust. As well, it is more common for these brokers to offer free bank transfers for deposits and withdrawals with local Canadian banks. | |||
'''On shore, IIROC regulated (variable leverage per pair maxing out ~33:1 on CAD crosses,) with CIPF deposit protection''': | '''On shore, IIROC regulated (variable leverage per pair maxing out ~33:1 on CAD crosses,) with CIPF deposit protection''': | ||
| Line 19: | Line 19: | ||
====Oanda Canada==== | ====Oanda Canada==== | ||
Oanda is one of the oldest | Oanda is one of the oldest retail online brokers still around. They were founded in Toronto, Canada in the late 90's and grew globally from there. Oanda's offering in Canada is on par with their US and Euro offering when it comes to spreads and platforms (in contrast, Oanda Japan has much more competitive spreads but only services Japan residents.) Oanda is also known as one of the largest market maker style retail brokers around, meaning they set their own prices on currency pairs and do not offer an "ECN" type account that might source quotes from an external market source. That said, their pricing is still generally fair during active market hours. | ||
* '''Regulation:''' IIROC in Canada (and other regulatory bodies globally depending on client residency) with CIPF insurance on account funds | * '''Regulation:''' IIROC in Canada (and other regulatory bodies globally depending on client residency) with CIPF insurance on account funds | ||
* '''Pricing:''' Spreads average around 1.4 to 2+ pips for majar pairs and are in line with other local Canadian | * '''Pricing:''' Spreads average around 1.4 to 2+ pips for majar pairs and are in line with other local Canadian brokers, but are not as competitive as other offshore (but well regulated) broker options | ||
** '''NOTE:''' It's been observed that spreads on Oanda's platform can get quite wide during less liquid times like daily rollover and holidays (vs the industry average as all | ** '''NOTE:''' It's been observed that spreads on Oanda's platform can get quite wide during less liquid times like daily rollover and holidays (vs the industry average as all brokers will have wider spreads during these times) so it's advised if you trade with tight stops or are a scalper to be aware of this and manage your positions accordingly | ||
* '''Leverage:''' IIROC set leverage as described atop this page | * '''Leverage:''' IIROC set leverage as described atop this page | ||
* '''Products:''' | * '''Products:''' Forex and CFDs on commodities | ||
* '''Platforms:''' Oanda Desktop (proprietary), | * '''Platforms:''' Oanda Desktop (proprietary), MetaTrader 4 (MT4 Desktop, Web, and Mobile), and '''NEW''' [https://geni.us/TradingViewNew tradingview.com] TradingView integrated chart trading) as a platform option | ||
<blockquote>'''NOTE:''' As with all IIROC regulated | <blockquote>'''NOTE:''' As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below. </blockquote> | ||
====Gain Capital / forex.com==== | ====Gain Capital / forex.com==== | ||
Gain Capital (also branded as forex.com) is a US | Gain Capital (also branded as forex.com) is a US broker with a Canadian presence. They are also one of the oldest online retail forex brokers and have a long history in this industry. Their Canadian offering is fair and competitive with other locally (IIROC) regulated broker options for traders, and they have invested in building up a Canadian office and presence which is always a nice plus when foreign brokers offer services to Canadians. | ||
* '''Regulation:''' IIROC in Canada (and other regulatory bodies globally depending on client residency) with CIPF insurance on account funds | * '''Regulation:''' IIROC in Canada (and other regulatory bodies globally depending on client residency) with CIPF insurance on account funds | ||
* '''Pricing:''' Spreads average around 1.4 to 2+ pips for majar pairs and are in line with other local Canadian | * '''Pricing:''' Spreads average around 1.4 to 2+ pips for majar pairs and are in line with other local Canadian brokers, but are not as competitive as other offshore (but well regulated) broker options | ||
* '''Leverage:''' IIROC set leverage as described atop this page | * '''Leverage:''' IIROC set leverage as described atop this page | ||
* '''Products:''' | * '''Products:''' Forex and CFDs on commodities | ||
* '''Platforms:''' Proprietary (desktop), | * '''Platforms:''' Proprietary (desktop), MetaTrader 4 (MT4 Desktop, Web, and Mobile) | ||
<blockquote>'''NOTE:''' As with all IIROC regulated | <blockquote>'''NOTE:''' As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below. </blockquote> | ||
| Line 47: | Line 47: | ||
*Canadian branch (Toronto) of UK firm | *Canadian branch (Toronto) of UK firm | ||
*IIROC set leverage (33:1 max on CAD crosses and 20:1 or less on all others.) | *IIROC set leverage (33:1 max on CAD crosses and 20:1 or less on all others.) | ||
*Platforms: Proprietary (desktop), | *Platforms: Proprietary (desktop), MetaTrader 4 (MT4 Desktop, Web, and Mobile) | ||
*Heavy focus on CFDs outside of | *Heavy focus on CFDs outside of forex, which are often not very well priced (marked up spreads) vs their underlying commodity | ||
*Adheres to Alberta's accredited | *Adheres to Alberta's accredited investor requirement to trade Forex, so Alberta residents need to have a significant net worth before they can open an account. | ||
<blockquote>'''NOTE:''' As with all IIROC regulated | <blockquote>'''NOTE:''' As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below. </blockquote> | ||
| Line 58: | Line 58: | ||
*Canadian branch (Montreal) of a larger US firm | *Canadian branch (Montreal) of a larger US firm | ||
*IIROC set leverage (33:1 max on CAD crosses and 20:1 or less on all others.) | *IIROC set leverage (33:1 max on CAD crosses and 20:1 or less on all others.) | ||
*Minimum $2.5 USD commission per side of each | *Minimum $2.5 USD commission per side of each trade, so not cost effective unless you're trading a minimum of $50k+ notional ticket size | ||
*Platforms: Traders Workstation (proprietary) | *Platforms: Traders Workstation (proprietary) | ||
*Adheres to Alberta's accredited | *Adheres to Alberta's accredited investor requirement to trade Forex, so Alberta residents need to have a significant net worth before they can trade leveraged FX. | ||
<blockquote>'''NOTE:''' As with all IIROC regulated | <blockquote>'''NOTE:''' As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below. </blockquote> | ||
==Offshore brokers== | ==''Offshore brokers''== | ||
Brokers who can service Canadian residents, can be well regulated with access to much higher leverage and tighter spreads, but lack deposit insurance and will likely have limited fee based funding methods. | |||
* | *Brokers regulated by overseas entities like the FCA in the UK, or ASIC in Australia, still provide recourse should something go wrong. However, as Canadian residents, dealing with an overseas regulatory body may not be as easy as dealing with a local regulator should a complaint need to be made. | ||
*Offshore deposit protection insurance programs exist but are not guaranteed by a local body. Your own due diligence is required here. | *Offshore deposit protection insurance programs exist but are not guaranteed by a local body. Your own due diligence is required here. | ||
| Line 77: | Line 77: | ||
[https://geni.us/PacificUnionPrime https://puprime.com] | [https://geni.us/PacificUnionPrime https://puprime.com] | ||
[https://geni.us/PacificUnionPrime Pacific Union Prime] has their roots in | [https://geni.us/PacificUnionPrime Pacific Union Prime] has their roots in institutional forex trading services going back to 2015, and recently entered the retail forex industry by opening up their service to retail clients. They are a global broker with offices around the world, '''including a support office in Canada''', but are primarily based out of Australia. They accept Canadian clients and offer Interac eTransfers for deposit, making them easy to fund and use for Canadian residents. | ||
* '''Regulation:''' SFSA regulated out of the Seychelles for Canadian clients, with other entities regulated globally | * '''Regulation:''' SFSA regulated out of the Seychelles for Canadian clients, with other entities regulated globally | ||
* '''Pricing:''' [https://geni.us/PacificUnionSpreads Much lower average spreads (0.0-0.2 average EUR/USD on Prime Account)] compared to Canadian "onshore" | * '''Pricing:''' [https://geni.us/PacificUnionSpreads Much lower average spreads (0.0-0.2 average EUR/USD on Prime Account)] compared to Canadian "onshore" brokers | ||
* '''Leverage:''' '''Up to 500:1 leverage for Canadians''' | * '''Leverage:''' '''Up to 500:1 leverage for Canadians''' | ||
* '''Products:''' | * '''Products:''' Forex, Metals, Crypto, Index, and Share CFDs, over 200 CFD products in general ('''NOTE:''' shares trade like stocks with raw spreads but stock commissions per trade, this broker does a great job being competitive with Forex, but we encourage you to look at a proper stock broker if you are interested in share trading) | ||
* Platforms: | * Platforms: MetaTrader 4, MetaTrader 5, WebTrader, and MT4/5 mobile | ||
* '''Notes:''' | * '''Notes:''' | ||
** Good alternative for Canadian clients of '''VantageFX''' as VantageFX will stop servicing the Canadian market on Nov 30th, 2020 | ** Good alternative for Canadian clients of '''VantageFX''' as VantageFX will stop servicing the Canadian market on Nov 30th, 2020 | ||
** Accepts Alberta residents without accredit | ** Accepts Alberta residents without accredit investor status requirement | ||
** Accounts denominated in '''CAD''' for Canadian clients, plus other major | ** Accounts denominated in '''CAD''' for Canadian clients, plus other major currency denomination options (EUR, USD, etc..) | ||
** '''No fee''' Visa Debit, MasterCard Debit, and Credit Card deposits / withdrawals | ** '''No fee''' Visa Debit, MasterCard Debit, and Credit Card deposits / withdrawals | ||
** '''No fee''' Interac e-Transfer Deposits | ** '''No fee''' Interac e-Transfer Deposits | ||
| Line 96: | Line 96: | ||
[https://geni.us/eightcap https://eightcap.com] | [https://geni.us/eightcap https://eightcap.com] | ||
[https://geni.us/eightcap Eightcap] was founded in 2009 out of Australia by experienced industry | [https://geni.us/eightcap Eightcap] was founded in 2009 out of Australia by experienced industry professionals with extensive experience in the brokerage industry. Eightcap entered the industry with the goal of being the world's best MetaTrader 4 brokerage, and focuses heavily on the MT4 platform. They service Canadian residents out of their offshore regulated entity, and provide crypto deposits and withdrawals for USD based accounts. | ||
* '''Regulation:''' SCB regulated out of the Bahamas for Canadian clients | * '''Regulation:''' SCB regulated out of the Bahamas for Canadian clients | ||
* '''Pricing:''' Lower average spreads (0.06 average EUR/USD on Raw Account) compared to Canadian "onshore" | * '''Pricing:''' Lower average spreads (0.06 average EUR/USD on Raw Account) compared to Canadian "onshore" brokers | ||
* '''Leverage:''' '''Up to 500:1 leverage for Canadians''' | * '''Leverage:''' '''Up to 500:1 leverage for Canadians''' | ||
* '''Products:''' | * '''Products:''' Forex, Metals, Crypto, Index, and Share CFDs | ||
* Platforms: | * Platforms: MetaTrader 4, MetaTrader 5, WebTrader, and MT4/5 mobile | ||
* '''Notes:''' | * '''Notes:''' | ||
** Accepts Alberta residents without | ** Accepts Alberta residents without accredit investor status requirement | ||
** Accounts denominated in '''CAD''' for Canadian clients, though more deposit and withdrawal options are available for USD based accounts | ** Accounts denominated in '''CAD''' for Canadian clients, though more deposit and withdrawal options are available for USD based accounts | ||
** USD based accounts can deposit and withdraw Tether / USDT stable coin, making it easy to fund with crypto | ** USD based accounts can deposit and withdraw Tether / USDT stable coin, making it easy to fund with crypto | ||
| Line 110: | Line 110: | ||
===Note on other offshore | ===Note on other offshore brokers=== | ||
While many other offshore | While many other offshore brokers exist, and some also take Canadians, it's important to remember the importance of sticking with well regulated brokers. | ||
A troubling trend seen lately in the | A troubling trend seen lately in the forex industry is when a broker will hold themselves out as well regulated (usually FCA,) but funnel Canadian clients to a division operating in a much more relaxed regulatory jurisdiction (often Cyprus, or Seychelles.) | ||
The | The brokers listed above are well regulated and are upfront about their regulatory status. | ||
Latest revision as of 08:59, 17 November 2023
Brokers for Canadians
Canadians have two directions they can go when selecting a broker: Locally regulated brokers with Canadian offices, or foreign regulated brokers either with a Canadian office or entirely offshore.
Local brokers are overseen by IIROC, Canada's national regulator, and IIROC is responsible for regulating not just forex but most tradable securities in Canada. By choosing a Canadian regulated broker, you'll have a local regulatory body to work with should anything go wrong with your broker.
However, IIROC also sets leverage restrictions pretty aggressively, and on a pair by pair basis, which a lot of traders find difficult to work with. The max leverage currently set is 33:1 on CAD crosses, most majors are 30:1 or 20:1, and exotics can drop down to as little as 3:1. These rates adjust frequently as they are set based on recent volatility in the underlying markets, so even a major forex pair that's liquid could see leverage get cut back should volatility increase. The restrictive and minimal leverage is one of the larger drawbacks to an IIROC regulated broker.
Most locally regulated brokers will be part of the CIPF, which insures client deposits in the event of broker insolvency. The max coverage per person (across all accounts,) is one million CAD. This is one of the most expansive protection insurance programs in the world for investors.
"Onshore" Brokers
Brokers with offices physically in Canada and who are registered and licensed by Canadian regulatory authorities (IIROC.) These brokers will typically be part of the CIPF program and offer some insurance against the broker going bust. As well, it is more common for these brokers to offer free bank transfers for deposits and withdrawals with local Canadian banks.
On shore, IIROC regulated (variable leverage per pair maxing out ~33:1 on CAD crosses,) with CIPF deposit protection:
Oanda Canada
Oanda is one of the oldest retail online brokers still around. They were founded in Toronto, Canada in the late 90's and grew globally from there. Oanda's offering in Canada is on par with their US and Euro offering when it comes to spreads and platforms (in contrast, Oanda Japan has much more competitive spreads but only services Japan residents.) Oanda is also known as one of the largest market maker style retail brokers around, meaning they set their own prices on currency pairs and do not offer an "ECN" type account that might source quotes from an external market source. That said, their pricing is still generally fair during active market hours.
- Regulation: IIROC in Canada (and other regulatory bodies globally depending on client residency) with CIPF insurance on account funds
- Pricing: Spreads average around 1.4 to 2+ pips for majar pairs and are in line with other local Canadian brokers, but are not as competitive as other offshore (but well regulated) broker options
- NOTE: It's been observed that spreads on Oanda's platform can get quite wide during less liquid times like daily rollover and holidays (vs the industry average as all brokers will have wider spreads during these times) so it's advised if you trade with tight stops or are a scalper to be aware of this and manage your positions accordingly
- Leverage: IIROC set leverage as described atop this page
- Products: Forex and CFDs on commodities
- Platforms: Oanda Desktop (proprietary), MetaTrader 4 (MT4 Desktop, Web, and Mobile), and NEW tradingview.com TradingView integrated chart trading) as a platform option
NOTE: As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below.
Gain Capital / forex.com
Gain Capital (also branded as forex.com) is a US broker with a Canadian presence. They are also one of the oldest online retail forex brokers and have a long history in this industry. Their Canadian offering is fair and competitive with other locally (IIROC) regulated broker options for traders, and they have invested in building up a Canadian office and presence which is always a nice plus when foreign brokers offer services to Canadians.
- Regulation: IIROC in Canada (and other regulatory bodies globally depending on client residency) with CIPF insurance on account funds
- Pricing: Spreads average around 1.4 to 2+ pips for majar pairs and are in line with other local Canadian brokers, but are not as competitive as other offshore (but well regulated) broker options
- Leverage: IIROC set leverage as described atop this page
- Products: Forex and CFDs on commodities
- Platforms: Proprietary (desktop), MetaTrader 4 (MT4 Desktop, Web, and Mobile)
NOTE: As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below.
CMC Markets
- Canadian branch (Toronto) of UK firm
- IIROC set leverage (33:1 max on CAD crosses and 20:1 or less on all others.)
- Platforms: Proprietary (desktop), MetaTrader 4 (MT4 Desktop, Web, and Mobile)
- Heavy focus on CFDs outside of forex, which are often not very well priced (marked up spreads) vs their underlying commodity
- Adheres to Alberta's accredited investor requirement to trade Forex, so Alberta residents need to have a significant net worth before they can open an account.
NOTE: As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below.
Interactive Brokers Canada
- Canadian branch (Montreal) of a larger US firm
- IIROC set leverage (33:1 max on CAD crosses and 20:1 or less on all others.)
- Minimum $2.5 USD commission per side of each trade, so not cost effective unless you're trading a minimum of $50k+ notional ticket size
- Platforms: Traders Workstation (proprietary)
- Adheres to Alberta's accredited investor requirement to trade Forex, so Alberta residents need to have a significant net worth before they can trade leveraged FX.
NOTE: As with all IIROC regulated brokers, this brokers complies with provincial regulatory laws which include accredited investor status for residents of Alberta. Albertians looking for alternatives can skip to the offshore brokers section below.
Offshore brokers
Brokers who can service Canadian residents, can be well regulated with access to much higher leverage and tighter spreads, but lack deposit insurance and will likely have limited fee based funding methods.
- Brokers regulated by overseas entities like the FCA in the UK, or ASIC in Australia, still provide recourse should something go wrong. However, as Canadian residents, dealing with an overseas regulatory body may not be as easy as dealing with a local regulator should a complaint need to be made.
- Offshore deposit protection insurance programs exist but are not guaranteed by a local body. Your own due diligence is required here.
Pacific Union Prime
Pacific Union Prime has their roots in institutional forex trading services going back to 2015, and recently entered the retail forex industry by opening up their service to retail clients. They are a global broker with offices around the world, including a support office in Canada, but are primarily based out of Australia. They accept Canadian clients and offer Interac eTransfers for deposit, making them easy to fund and use for Canadian residents.
- Regulation: SFSA regulated out of the Seychelles for Canadian clients, with other entities regulated globally
- Pricing: Much lower average spreads (0.0-0.2 average EUR/USD on Prime Account) compared to Canadian "onshore" brokers
- Leverage: Up to 500:1 leverage for Canadians
- Products: Forex, Metals, Crypto, Index, and Share CFDs, over 200 CFD products in general (NOTE: shares trade like stocks with raw spreads but stock commissions per trade, this broker does a great job being competitive with Forex, but we encourage you to look at a proper stock broker if you are interested in share trading)
- Platforms: MetaTrader 4, MetaTrader 5, WebTrader, and MT4/5 mobile
- Notes:
- Good alternative for Canadian clients of VantageFX as VantageFX will stop servicing the Canadian market on Nov 30th, 2020
- Accepts Alberta residents without accredit investor status requirement
- Accounts denominated in CAD for Canadian clients, plus other major currency denomination options (EUR, USD, etc..)
- No fee Visa Debit, MasterCard Debit, and Credit Card deposits / withdrawals
- No fee Interac e-Transfer Deposits
Eightcap
Eightcap was founded in 2009 out of Australia by experienced industry professionals with extensive experience in the brokerage industry. Eightcap entered the industry with the goal of being the world's best MetaTrader 4 brokerage, and focuses heavily on the MT4 platform. They service Canadian residents out of their offshore regulated entity, and provide crypto deposits and withdrawals for USD based accounts.
- Regulation: SCB regulated out of the Bahamas for Canadian clients
- Pricing: Lower average spreads (0.06 average EUR/USD on Raw Account) compared to Canadian "onshore" brokers
- Leverage: Up to 500:1 leverage for Canadians
- Products: Forex, Metals, Crypto, Index, and Share CFDs
- Platforms: MetaTrader 4, MetaTrader 5, WebTrader, and MT4/5 mobile
- Notes:
- Accepts Alberta residents without accredit investor status requirement
- Accounts denominated in CAD for Canadian clients, though more deposit and withdrawal options are available for USD based accounts
- USD based accounts can deposit and withdraw Tether / USDT stable coin, making it easy to fund with crypto
- Coming soon Interac e-Transfer Deposits are planned and coming soon for CAD accounts, however right now the deposit options for CAD accounts are bank wire, Visa/MC, and Skrill
Note on other offshore brokers
While many other offshore brokers exist, and some also take Canadians, it's important to remember the importance of sticking with well regulated brokers.
A troubling trend seen lately in the forex industry is when a broker will hold themselves out as well regulated (usually FCA,) but funnel Canadian clients to a division operating in a much more relaxed regulatory jurisdiction (often Cyprus, or Seychelles.)
The brokers listed above are well regulated and are upfront about their regulatory status.