Best ASIC Regulated Forex Brokers 2021
One of the most critical aspects when choosing a Forex broker is to check its license to operate. In other words, if it has the right to operate in the jurisdiction. Or, if it is legally regulated.
Who cares, you might ask? As a trader, you should care. Would you be comfortable knowing that some driving schools give out driving licenses to people in your city without those people actually earning them? Of course not. The same with trading – regulated brokers, offer a guarantee that the financial regulator oversees its activity and protects traders’ interests.
The list of ASIC Regulated Forex Brokers:
Who is the ASIC?
The Australian Security and Investment Commission (ASIC) oversees financial activities in Australia to protect consumers, investors, and creditors. It has various roles and responsibilities in areas like corporate governance, financial services, consumer protection, or financial literacy.
It offers a high level of regulatory oversight and enforces brokers to adopt fair, consumer-oriented practices.
What is an ASIC Regulated Broker?
For a broker to operate in Australia, it must hold an ASIC license. It means it is regulated, and typically the license or registration number is publicly advertised on the broker’s website.
It’s in the broker’s interest to make regulation public to be considered reputable. To earn and keep a license to operate in Australia, one of the most important Forex trading hubs in the world, is no easy feat.
A regulated broker complies with rules set by ASIC, like maintaining a safe trading environment or proving financial sustainability. Moreover, it must maintain high operational standards and present constant audits.
How a Broker Becomes ASIC Regulated?
Proof of financial sustainability (minimum 1 million AUD) is one thing. Regular audits are another. Segregated accounts come to complete the most essential points.
An ASIC regulated broker must follow strict compliance, though the registration process is easy to understand and implement, the broker must meet all the points which vary.
ASIC is famous for its wide range of free online resources and transparency when it comes to the conditions to meet for becoming regulated.
How ASIC Regulation Protects You?
- Funds safety – clients’ funds are kept in segregated accounts usually at a custodial bank that works with the broker
- Local representative – ASIC regulated brokers must have an official representative in Australia and can’t operate from overseas
- Audited books – regular audits ensure business viability, thus protecting its clients
- Financial dealings transparency – open and honest financial marketplace, fair to all parties involved
ASIC regulated brokers operate in a safe environment under the regulator’s umbrella. Traders may feel safe that their interests are well represented, and the regulator oversees the financial health of each broker.
Funds deposited with ASIC regulated brokers are safe and guaranteed. Moreover, ASIC is one of the few regulators that allow high-leverage trading, unlike other regulators from different jurisdictions. It is no wonder traders favour ASIC brokers to enjoy both a safe trading environment and high-leverage availability. This may soon change however like the look to mirror global counterparts.
Regulating the Forex market ensures fair and ethical business between parties and we would always recommend that you choose a broker that is regulated by the overseeing body in your jurisdiction. It makes trading less one-sided and forces risk management to be put at the forefront of clients minds to help protect them.
Do ASIC brokers impose the FIFO rule?
No. FIFO (First In First Out) rule means traders must close the open positions on the same currency pair in the order of their opening. ASIC doesn’t impose such a condition. Also, hedging is allowed under ASIC regulations.
Is my money safe with an ASIC regulated broker?
Yes. ASIC brokers must keep clients’ funds separately, in an Australian custodial bank, without using them for operating activities.
Is it true ASIC brokers offer 1:300 and 1:400 leverage?
Yes. ASIC allows high-leverage trading when compared with the US or European regulations. However, with high leverage, traders should emphasize strict money management rules to avoid unnecessary losses. There may however look to lower leverage to keep in tune with global standards.
Should I prefer an ASIC regulated broker in Australia?
Why not? Being regulated by a regulator like ASIC suggests credibility and safety for the retail trader. The broker must obey strict rules to earn and keep its license, and that represents a guarantee for the trader that the broker is legitimate.
For more regulated brokers by highly respected authorities see below: