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An ASIC forex broker refers to a forex (Foreign Exchange) brokerage firm which is regulated and authorized by the Australian authority called Australian Securities and Investment Commission (ASIC).
They perform the role of market regulator for forex and the wider financial market within Australia. They have been around since 1991 and during this time, have steadily risen in reputation to become one of the foremost respected financial regulatory bodies in global finance.
In relation to forex brokers, any broker who wishes to offer trading services within Australia must register with ASIC. This will then entitle to the broker to receive an Australian Financial Services license which is needed to conduct operations in the country.
In order to rank the best ASIC brokers we have taken into consideration a variety of factors including:
- An active ASIC license;
- The commissions charged on forex;
- The general quality of the broker;
- The deposit/withdrawal currencies.
What are the best ASIC forex brokers?
Below is our curated list of the best forex brokers regulated by the ASIC, with details and information about the regulation, the features, and the characteristics.
How does ASIC work?
The primary functions of ASIC include some of the following:
- Promoting the growth of the Australian market
- Financial firms oversight (included australian forex brokers)
- Customer protection
Just as with any other regulatory body, the key role of ASIC is in the protection of customers and promotion of transparency within the financial market. This is something they have managed to do well in the Australian market since their inception.
What are the characteristics and benefits of ASIC?
Under ASIC regulations, there are some areas for trading permitted which may not be the case with some other regulatory bodies. Among these areas are trading in binary options, spread betting, and CFDs trading. All of these are legal under ASIC regulation. Crypto trading is also permitted.
The amount of leverage used to be left at the discretion of ASIC brokers, with an increased maximum leverage of 500:1 being available although this is up to the broker. Since March 29th 2021, the new legislation has been imposed that brokers under ASIC regulation should provide maximum leverage up to 30:1.
A final point here is to note that segregated accounts with top-tier banks are still required under ASIC as well as negative balance protection.
What are the prohibitions with ASIC?
Under ASIC regulations there are restrictions to note, the main one being the possibility to offer new traders bonuses and prizes if they open a trading account with the broker.
With that said, each broker has a wide level of discretionary authority under the regulator and some may prohibit activities such as scalping and hedging.
If you’re interested in forex scalping or scalping in general, you may be interested in reading our top 10 best forex broker for scalping article.
Differences between ASIC Regulated and ASIC Licensed Brokers
The difference in these two terms is that an ASIC regulated broker must go through the full registration process and steps required by the regulator, while an ASIC licensed broker may be able to forego some of these steps but still offer trading services within Australia that comply with the local regulations.
How to check if a broker is ASIC regulated
Checking the broker you are with is regulated should be an easy and fast process.
This process should take no more than a few minutes to verify, and you can usually find the business name of your broker at the bottom of their homepage.
How does ASIC intervene in cases of financial abuse?
If a broker does breach any of the regulations, then ASIC has a wide range of powers to implement a variety of restrictions. This is usually done through a system of broker fines or a ban.
As a recent example, Axicorp Limited (Axi) received a 3-month ban from the Australian market after being accused of not complying with financial services laws.
How ASIC can help you
If you feel like you have experienced some problem with your broker that breaches ASIC regulations in any way, then you can easily and quickly contact them to pursue a complaint through the ASIC official website.
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