Regulators in Canada continue to exercise warnings against firms that are not authorised by the country’s regulator. The Ontario Securities Commission (OSC), becomes the latest watchdog in the country to issue warnings to investors, Chikara FX a margin FX provider has been identified.
Chikara FX, a Costa Rican-based managed accounts firm with international offices in Japan and Latin America, has been added to the growing list of firms on the OSC’s register. The register acts as a notifier to domestic investors and provides notice on firms that Canadian investors should not deal with. The list includes various providers including regulated and unregulated firms. Global forex broker, FXDD Malta, was added to the list in January 2015, other well-known reputable brokers include AVA Trade.
Domestic regulators adhere to local regulations which differ from country to country, especially with reference to margin derivatives products. In addition, firms that are listed on the register may not be in breach of rules according to their regulations, for example, according to MiFID only sanctioned countries and clients from the US cannot be onboarded, Canada like other developed nations is open for business according to the home regulator’s rulings.
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The OSC gives users an explanation on why firms and individuals are listed on the register, it explains: “The individuals and companies are on this list because the OSC is concerned that they may be:
- selling securities or offering investment advice in Ontario, or claiming to sell securities or offer investment advice from Ontario, without being registered in Ontario, and without having an exemption, and/or
- offering securities without a prospectus when they are required to have one
These individuals and companies have come to our attention through complaints from investors, information from other regulators or our own surveillance activities. If an individual or company is on the list, it does not mean that the Commission has held a hearing or made a finding on them, or made any judgment about the merits of any product they are offering.”
Chikara FX offers both discretionary and non-discretionary trading products, its website covers the core services and allows interested traders to complete an application which is available as an offline pdf document. The firm claims to have been in business since 2001, over the years the firm has issued a number of press releases outlining managerial changes. However, the last company update is in 2013. The OSC’s warning is limited to the name of the firm and does not provide any details on the nature and background of the warning.
Canada is a leading destination for firms looking to expand their forex and CFD business, however, without clear guidelines on margin FX only a handful of international forex brokers are able to do business in the country, these include GAIN Capital, CMC Markets, Oanda and FXCM through its local partner Friedberg Mercantile.