Foreign exchange, or forex, is a market with low entry barriers and considerable time and resource flexibility. As a result, the forex market is ideal for experienced traders or those just starting their trading journey.
The foreign exchange (forex) market has a daily volume of $6.6tn, making it the largest financial market in the world, more significant than the stock market.
For those in Australia looking to trade forex, it is essential to ensure the broker they are dealing with is ASIC-licensed. Whether the broker is Australia-based and under the authority of the ASIC, not located in Australia but licensed by the ASIC, or even unregulated, it is essential to gain a more comprehensive knowledge of the forex brokers available to traders based in Australia.
Is it even legal in Australia to trade Forex or CFDs online? The simple answer is yes, but you should verify that the company you are working with has a current ASIC licence.
The abbreviation for ASIC stands for the Australian Securities and Investments Commission. For example, ASIC oversees not just online financial services but also consumer protection, securities, and derivatives. But why is it essential that your broker follow ASIC rules? Only if your broker is subject to the Australian Securities and Investments Commission (ASIC) jurisdiction will the authorities be able to act as a consumer protection watchdog on your behalf.
There are at least three different types of brokerages on offer in Australia, each catering for a different segment of the country’s burgeoning Foreign Exchange (Forex), Contracts for Difference (CFD), and Cryptocurrency (Cryptocurrency) markets. Traders in Australia may be tempted to use the services of unregulated brokerages that operate online. The scope of these brokerages spans the world. And then, there are the international financial service providers who are not based in Australia but have been granted a licence to operate in the country by the Australian Securities and Investments Commission (ASIC). Lastly, ASIC has been able to regulate Australian enterprises since they were established there.
The Australian Forex Markets
The Australian economy is expected to recover fully following the pandemic caused by the COVID-19 virus. The economy is seeing a surge in productivity growth and needs attention to be paid to the framework circumstances in which firms operate. This boost is a result of increased competition and regulation. However, the disparities in educational attainment and skill levels are a significant impediment to the expansion potential of the economy.
The Australian government continues to impose high rates of taxes on earnings in comparison to the level of consumption, which makes the tax mix less conducive to economic development. In addition, disparities in well-being continue to exist between indigenous populations and the rest of the people, particularly concerning educational attainment, life expectancy, and employment rates. That hampers efforts to promote inclusivity.
Not only the economy in Australia affects the strength of the Australian Dollar. Exchange rates are determined by several variables, many of which are linked to the economic connection between two nations. The countries will see an appreciation in the value of their currency due to an increase in their buying power compared to other currencies. Those nations whose inflation rates are more controlled experience a devaluation of their currency relative to the value of their trade partners’ money, typically accompanied by an increase in interest rates. Countries with significant public deficits and debts are less appealing to investors from other countries. A considerable debt stimulates inflation, and the loan will be repaid with real dollars, worth less over time if inflation is strong. Foreign investors will have less interest in purchasing assets denominated in that currency if there is a substantial danger of default.
Who Regulates Forex Trading in Australia
Australia’s Corporations and Investments Commission (ASIC) oversees the country’s corporations, markets, financial services, and consumer credit.
The ASIC is the nation’s financial services regulator, and as such, it is tasked with the following:
- Promote changes to the financial system and ensure free trade flow.
- Build confidence amongst investors.
- Use just the minimum necessary to ensure compliance with the law.
- Collect data from businesses subject to ASIC regulation.
- Take various measures to ensure compliance with the law.
- Disclosure of corporate data.
The Best Forex Brokers in Australia
Most large international companies with operations in Australia have set up local subsidiaries. The term “Australian subsidiary” refers to a company whose legal registration and corporate headquarters are in Australia. We believe regulation is essential since there is an increased prevalence of FX scams when registering with a new broker. Forex brokers in Australia are not always regulated and can pose significant harm to your capital.
Most investors should avoid working with unregulated brokers because of the high-risk level. If you know the trading industry, you know the many frauds and dishonest operators that claim to do “magic.” Anyone with a basic understanding of the trading sector knows the prevalence of fraud. Think of what these scam artists could do with the money you’ve put into them if they weren’t being monitored. The brokers operating inside Australia licensed by the Australian Securities and Investments Commission (ASIC) are the most reliable and trustworthy. The Australian Securities and Investments Commission (ASIC) is one of the world’s strictest national financial regulators.
When looking for suitable Australian forex brokers, we recommend going with one of our top-listed ASIC-regulated picks.
| Broker | Features | Min Deposit | EURUSD Spread | ||
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 Between 74-89 % of retail investor accounts lose money when trading CFDs
US Clients: No Regulated : Yes
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$200 | NDD 0.09 / Standard 0.69 |
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Between 74-89 % of retail investor accounts lose money when trading CFDs
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 Your capital is at risk
US Clients: No Regulated : Yes
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$200 | From 0.1 pips | ||
 Your capital is at risk
US Clients: No Regulated : Yes
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– 40% New Member Bonus
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$100 | Fixed |
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Europe* CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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 51% of retail CFD accounts lose money
US Clients: No Regulated : Yes
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$50 (varying by Country) | from 1 |
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*Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more
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 Your capital is at risk
US Clients: No Regulated : Yes
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No minimum deposit | From 0.0 pips | ||
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