Forex Leverage in Canada

In Canada, the maximum leverage that a Canadian licensed broker can offer is set periodically by the Investment Industry Regulatory Organization of Canada (IIROC).

When the volatility of a particular currency pair exceeds a threshold over a 60 trading day period, margin requirements are increased. Conversely, when volatility drops, the margin requirements are decreased.^[2]

The most recent update published concerning the list of foreign exchange spot risk margin rates for Canadian and US base currency accounts was on the 9th of April 2021.^[3]

The IIROC reduced margin requirements for both the Mexican new peso versus the Canadian dollar (MXN/CAD) and the Norwegian krone versus the US dollar (NOK/USD) in the latest update.

The Canadian regulator dropped the margin requirements for both pairs from 3.5% (28:1) to 3% (33:1).

The highest forex leverage currently available in Canada is on the CAD/USD, which is currently offered at 2% (1:50) margin requirements.

The IIROC is one of the few regulators that updates minimum margin requirements according to volatility.

Most regulators, such as ASIC and ESMA, have fixed leverage, albeit with varying tiers depending on whether the currency pair is considered major or minor.

Although the IIROC sets maximum allowed leverage, brokers are able to implement lower leverage according to their own risk management procedures.

Additionally, traders can decrease the leverage of their account depending on their preference.

Canadian Forex Regulation

The reason for reduced forex leverage in Canada is because of regulation. Unfortunately, Canadian forex regulation has many inconsistencies, mainly because of the lack of harmonization between regulatory authorities.

Industry experts are counting on the IIROC to harmonize guidance across the country.^[4]

The Investment Industry Regulatory Organization of Canada (IIROC) is the primary body regulating the forex market in Canada.

The IIROC is a national self-regulatory organization (SRO) established as a non-profit and recognized by the Canadian Securities Administrators (CSA). The IIROC licenses any forex broker operating in Canada.

The Canadian Securities Administrators (CSA) is formed by the securities regulators of the ten provinces and three territories in Canada.

The CSA is responsible for promoting a harmonized approach to securities regulation across Canada. In addition, each of the 13 regional regulators has powers to authorize a broker.^[5]

The 13 regional regulators are:

• Alberta Securities Commission
• British Columbia Securities Commission
• Manitoba Securities Commission
• New Brunswick’s Financial and Consumer Services Commission
• Newfoundland and Labrador’s Office of the Superintendent of Securities of the Service
• Northwest Territories Securities Office
• Nova Scotia Securities Commission
• Nunavut Securities Office
• Ontario Securities Commission
• Prince Edward Island’s Office of the Superintendent of Securities
• Québec’s Autorité des marchés financiers
• Saskatchewan’s Financial and Consumer Affairs Authority
• Yukon Territories’ Office of the Superintendent of Securities

High Leverage Forex Brokers in Canada

If you’re looking to trade with high leverage from Canada, unfortunately, you’ll need to find an offshore broker willing to accept Canadians.

However, you should be aware that options are slim since Canadian authorities are punishing unauthorized brokers for targeting Canadian traders.

Recently, the Alberta Securities Commission settled with AvaTrade’s British Virgin Islands-regulated subsidiary for an administrative penalty worth $30,000 and to disgorge $213,428.00 of net revenue from the approximately 372 trading accounts belonging to Alberta investors.^[6]

In the list below, you’ll find several reputable offshore brokers opening trading accounts for Canadian residents.