Admiral Markets is now licensed as CFD broker in Canada

abdelaziz Fathi

The Canadian operating subsidiary of Admirals, Admiral Markets Canada Limited, has received regulatory approval to offer CFDs trading to retail investors in Ontario and British Columbia.

Admiral Markets was admitted as registered investment dealer and member of Canada’s mega regulator, the Investment Industry Regulatory Organization (IIROC). As an execution-only dealer, however, the broker is not allowed to provide investment advice or recommendations regarding CFDs transactions in Canada.

The Estonian-based firm, which celebrated its 21st anniversary in March, described the milestone as a first stage with plans already in place to increase the scope of its activities in Canada over the coming year.

While it sees Canada a fantastic opportunity to continue its geographic expansion, Admirals looks to see how the local market takes up the product offering and what unique selling points the company can provide.

“Obtaining this license in Canada is a strategic benchmark for the company being our first license achieved in the region of North- America. This is a part of our long-term strategy and positioning ourselves globally. Furthermore, with this success we tick an important goal on our roadmap for our 2030 strategy,” said CEO of Admirals, Sergei Bogatenkov.

“Regardless of that this is a move outside our core markets in Europe, we are confident that lessons learned and particularly language synergies with the region we commence operations should allow us to seemingly adapt our operation successfully in Canada,” added the CEO.

IIROC enjoys a unique structure

Admirals is also licensed by the UK ‎Financial ‎Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC).

Per its latest report, the company made a net revenue of €35.7 million in 2021, which was down 43 percent year-over-year from €62 million in 2020. Admirals barely broke even in the year ended with a net profit at €0.1 million in the 12 months through December 2021, compared with €20.7 million it earned in the year prior. Number of active clients was also up 2 percent to 49,080 clients compared to the previous year and also doubled compared to the same period in 2019.

Of note, IIROC enjoys a unique structure as it regularly updates FX margin trading requirements subject to FX volatility. While IIROC rarely uses this power, but the watchdog intervenes, particularly in situations where no other domestic regulator has the power to act (such as where a firm is proposing to offer a foreign-produced, highly-leveraged product to retail clients).

The chief regulatory body has recently proposed a regulatory framework that provides clarity for derivatives activities. Among other things, all highly leveraged products offered to retail clients must be approved in advance by IIROC. Brokers must obtain prior approval for their leveraged products either when releasing new instruments or introducing any changes to the current offerings.

CFD sellers also have their rights restricted with regard to the level of promotion of CFD contracts in order to eliminate existing regulatory arbitrage situations. Further, an additional risk warning is now required, clearly indicating the level of risk to which CFD buyers would be exposed. The risk disclosure statement provided must be approved by IIROC.

The self-regulatory organization has also revised the “institutional client” definition. The new approach aims to avoid drawbacks of the current classification methodology where all individual clients are considered retail, regardless of their investment knowledge or assets they have under administration.

The updated rules harmonize Canada’s regulations with product approval requirements introduced in Europe by ESMA, which banned offering binary options and restricted leverage on CFDs.

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