IIROC Hikes Margin Requirements on Select CAD Crosses

The Investment Industry Regulatory Organization of Canada (IIROC), a domestic self-regulatory organization for currencies, has reported an alteration in its margin requirements on select foreign exchange (FX) pairs, this time pertaining to the Canadian dollar (CAD), following a periodic change in Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term, according to an IIROC statement.

The IIROC maintains a mandate for the handling of the domestic regulatory environment in Canada – the group enjoys a unique structure as it regularly updates FX margin trading requirements subject to FX volatility. Back in February, the IIROC issued a series of changes to the Canadian pairs with the Mexican peso and the euro.

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More recently however, the IIROC has disclosed a revised table for all of its margin requirements of different currency pairs, with the changes to the leverage ratio of the Swiss franc (CHF) vs. the Canadian dollar (CAD).

Starting from April 21, 2016, the margin requirements on the CHF/CAD pair will be raised to 3.7% from 3.9%. The aforementioned FX spot risk margin rates effectively replaces a previous list provided by the IIROC back on March 21, 2016.

A full list of the IIROC’s rates, including its basket of twenty-one currencies as of April 21, 2016 can be accessed by the following link.