Trading in forex is not allowed and it is illegal in some countries. Some of the reasons that cause forex ban in these countries are the restriction of credit cards and it affects the domestic banking industry.
So, is forex trading legal in Canada? Yes, it is legal. However, there are a set of stringent rules and regulations that should be strictly adhered to when trading in forex. What makes it difficult to trade in Canada is that these rules are different from international forex trading laws.
The State of Forex Exchange Business
Forex is considered one of the most lucrative businesses today. It extremely liquid and trillions of dollar exchange hands every day. Despite its high profitability, it is extremely volatile.
Unless you are willing to undertake huge risks, do not venture into forex. Although forex traders are called investors, they are actually speculators. Forex trading business is all about speculations rather than investments.
Forex Trading Regulations in Canada
Before you venture into the Canadian forex market, understand the laws and the regulations. Note, the forex trading laws differ across the provinces in Canada. If you want to trade in different provinces, understand the forex trading laws of each province.
The tough forex regulations by the Canadian government is for keeping watch and regulating the brokers and the trading populations. However, the government allows you to trade from anywhere in the world and with any brokerage company.
Forex trading in Canada is legal. However, it does not have a national regulatory forum. Trading in securities in Canada is considered the same as trading in the securities and derivatives. You need to be conversant with the forex trading regulations in each province.
Forex Trading Regulations in Different Provinces
Forex trading in this province is regulated as over the counter currency derivative. It is regulated by the Autorite des Marches Financiers (AMF). The trader is exempted from some stringent conditions after the fulfillment of certain conditions.
• British Colombia
The British Colombia Security Commission considers forex trading contracts as securities. The rules in this province are not very stringent. To trade in forex, you do not need any prospectus or registration.
In Ontario, authorities regulate forex trading in the rest of the provinces.
The Forex Trade Regulating Bodies in Canada
The foreign exchange market is mostly regulated by bodies and authorities. The following are bodies that regulate forex trading in Canada:
• Canadian Securities Administrators (CSA)
This regulating body keeps a record of all the registered forex brokers in Canada. So, if you are wondering Which Forex Company is the Best? Check out with the CSA. For the brokers operating outside Canada, check out with the regulators from their respective jurisdictions.
• Investment Industry Regulatory Organization of Canada (IIROC).
This main body that regulates the investment and the forex market in Canada. A forex broker cannot operate in Canada without notifying the IIROC.
• National Futures Association (NFA)
It watches over and regulates the trading activities of companies and individuals.
• Commodity Futures Trading Commission (CFTC)
This body regulates the forex trading activities of the retailers.The forex trading laws in Canada are quite tough. They enable the government to regulate the leverage that the brokers give to their clients. The compliance bodies ensure the safety of the traders in the Canadian forex market.
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