Foreign Exchange trading occurs between two currencies. These can be any two currencies; there is no bar on the same.
Each country’s currency is managed by its central bank and/or government, and each often uses different processes, that is why it gets very difficult navigating the brokerage world. Consequently, the relative value of a currency changes over time when compared to another. Since each individual currency fluctuates due to changes in supply and demand, the intrinsic value of currencies consequently changes over time.
Foreign Exchange Market in Canada
In Canadian Foreign exchange market, there is an abundance of foreign exchange brokers. Therefore the investors can choose from a large array of brokers. It is a fair assumption that brokers from the US, the UK, and other parts of the European Union are more trusted than any other regions in the entire world.
Though many years have passed, Canadian brokers have been unable to replicate that kind of popularity in the retail trading industry. Canada does offer some compelling benefits that can attract both institutional as well as high net worth investors. There are also many advantages that the country offers to investors, which can in turn lure in the forex traders.
The Regulatory Body of Canada
The advantage of choosing a Foreign exchange broker from Canada is the Canadian Investor Protection Fund (CIPF), which guarantees $1 million in compensation, if a broker fails or if the parent company is liquidated.
This is a great way of ensuring the safety of customer funds. The one thing that worries all investors worldwide is the security of funds, as there is a significant chance of a broker going bankrupt due to any unexpected market movement.
Regulators in Canada factor in market eventualities while developing their regulatory guidelines, which help in preventing cases of broker insolvency, but no broker, is completely safe against liquidation or bankruptcy. $1 million in investor compensation does provide a bit more freedom and flexibility to the trader to enjoy more profits without ever worrying about their broker shutting up shop and not paying back a dime.
In contrast, FCA regulated brokers in the UK only offer a meager£50,000 as compensation if a broker files for insolvency, which takes the CIPF compensation to a different level. Therefore, Canadian brokers offer more protection for traders who have a significant sum invested in the Foreign exchange markets, which is highly suitable for high net worth individuals.
Although there are some advantages of choosing brokers from Canada, traders should also be aware of a few drawbacks of Canadian Forex Brokers. Canadian regulators are also committed to the welfare of their investors and offer the freedom to traders to choose any broker in the world.
Market Penetration of BlackBull Markets in Canada
In Canada, BlackBull Markets do not have a presence but are working on expanding their avenues worldwide which also brings Canada under their consideration.
Laws and Regulation in Canada
Canadian laws are pretty lenient towards financial firms, as it is not an absolute necessity for companies to be regulated by any formal Canadian authority to be able to entertain investors from Canada.
This increases the competitive nature of the retail trading market, but it also has severe shortcomings. The Canadian regulatorshave no control over brokers that are located in other parts of the world who are looking to trap investors in a web of frauds.
TheCanadian financial market is divided into different territories that impose different regulations through multiple regulatory organizations. The various regulatory agencies have different duties as far as regulating different types of firms are concerned.
Canada has the largest number of regulatory organizations in the world due to the lack of a Central regulatory authority. The Canadian Government has been contemplating the process of unifying all regulatory organizations; however, the plan has not yet been implemented.
Forex brokers in Canada are regulated according to their territory of operations. The foreign exchange brokers and other related companies in Canada provide unprecedented levels of security of client funds.