List of Brokers with IIROC Regulation

The Investment Industry Regulatory Organization serves as the primary regulator of Canadian financial markets, including online brokers. They are tasked with overseeing all retail trade activity in Canada to protect citizens from fraud by setting and maintaining industry standards. IIROC is also authorized to respond to online fraud and unauthorized trading activity. All companies that operate or facilitate securities trading in Canada must be members of IIROC and follow their regulations.

FAQ

What does IIROC regulated mean?

Being regulated by IIROC (the Investment Industry Regulatory Organization of Canada) means operating under the standards of a Canadian financial regulator. The body was established on June 1, 2008 to oversee investment dealers and trading activity in Canada, along with monitoring forex brokers and firms involved in OTC products and derivatives offering.

What are IIROC rules?

Recent changes in IIROC guidelines have decreased forex brokers' limit of leverage dramatically. It is said that IIROC's rules on leverage is even more extreme than those of the US authorities. However, their client protection scheme is quite robust as the agency requires a significant amount of compensation to investors should a broker end up in bankruptcy. In fact, the Canadian Investor Protection Fund (CIPF) compensates investors with up to $1 million dollars in the event of a broker's insolvency.

For investors, the downside lays in IIROC's strict policy against international brokers. Still, many of Canadian investors have taken advantage of the confusion regarding the different regulatory agencies in the country to trade with overseas brokers without any immediate repercussions.

What is the main purpose of IIROC?

The IIROC's important functions basically deal with the supervision of the financial services industry. Here are the general purposes of IIROC:

• To perform regular reviews on individual regulated firms.
• To develop rules and ensure the highest standards in the investment industry.
• To screen employees for ensuring well-trained, well-educated, and background-checked staffs in all IIROC regulated financial service providers.
• To set minimum requirements, particularly in relation to capital requirements.
• To investigate misconduct and initiate disciplinary proceedings as well as impose penalties if deemed necessary.

What are the powers of IIROC?

As a credible regulatory agency in Canada, IIROC has the authority to require forex brokers under its jurisdiction to have a valid IIROC license or a Canadian financial license from any of its other provinces. They have the power to suspend, sanction, fine, and expel any member firms found to have violated their guidelines. The organization sets regulations in the investment industry and has quasi-judicial powers that enables them to hold enforcement hearings.

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