Is this legal?

Pepperstone Targets Canadian Clients Without IIROC License

The brokerage has announced Canadian dollar denominated accounts for Canadian clients, where OTC forex is regulated strictly by IIROC

Pepperstone is the latest brokerage to offer clients Canadian dollar denominated accounts. What is surprising is that the company claims that the new service targets the company’s Canadian customers.

In accordance with current Canadian legislation, only brokers who are members of the local self-regulatory organization IIROC (Investment Industry Regulatory Organization of Canada) may provide over-the-counter forex to Canadian residents.

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Pepperstone is not a member of the above-mentioned, however in its news announcement it highlights that Canadian clients of the company may deposit and withdraw from their accounts with credit cards at no charge.

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Companies which are operating in full compliance with local regulation have been at a great disadvantage due to the associated costs with setting up Canadian brokerage arms. Offshore brokers have been actively targeting the market despite the official stance of the regulators without any effective means to counter the trend.

Pepperstone is citing “popular demand” for making the Canadian dollar denominated accounts available. It further explains that availability of the product is through the Metatrader 4 and the cTrader platforms, both of which are offered by the company.

The self-regulatory organization IIROC is notoriously famous with its floating leverage restriction on OTC forex trading. The margin levels available to Canadian clients float dependent on the volatility conditions on the market. The self-regulatory organization posts regular updates as market conditions change.

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