New Zealand, situated in the southwestern Pacific Ocean, plays a noteworthy role in global financial markets, especially in the Asia-Pacific region.
It has a well-established financial system, and its currency, the New Zealand Dollar (often referred to as the “Kiwi”), is one of the ten most traded currencies worldwide.
For retail forex trading activity, oversight and regulation fall under the Financial Markets Authority (FMA) of New Zealand. The FMA ensures that financial institutions operate transparently and fairly, providing a safe trading environment for both local and international investors.
In this article we have collected some of the best forex brokers in New Zealand. In order to create this list, we have taken into consideration:
- FMA regulation of the broker
- Minimum deposit of the broker for NZ traders
- If NZD were available as base currency for NZ traders
- Spreads and leverage for NZ traders
What are the best forex brokers in New Zealand?
Below is our curated list of the best forex brokers for traders living in New Zealand, with details and information about the country laws, the features, and the characteristics.
Is forex trading legal in New Zealand?
Forex trading in New Zealand is completely legal. The only thing that must happen is from the broker side and that is, if they want to offer financial services in New Zealand, they must be authorized to do so by the FMA (Financial Markets Authority). This is in fact to your benefit in finding a trusted forex broker.
How to trade forex in New Zealand
Considering the fact that each broker available in New Zealand should be regulated by the FMA then there are just a few general rules in place that you should follow when starting out in forex trading in NZ.
These are that you provide both proof of your identity and proof of residence in order to validate your account before funding and trading forex markets.
What should New Zealander traders look for in a forex broker?
As with forex trading in every country, there are always a few nuances to look out for. This is the same with trading forex in NZ. With that said, you will become aware that there are not really too many restrictions on trading in New Zealand and the maximum leverage is a generous 500:1 in most cases.
Here are three key tips to ensure you can choose the best available forex broker.
1. Look for brokers regulated within New Zealand
Finding a regulated broker should always be top of the list. This means they should always be regulated by the FMA. If for some reason you do decide to step outside this, then try to go with other top global regulators in the forex market such as CySEC, FCA, and ASIC.
2. Look for a broker that keeps the costs low
Costs will always be key in forex trading. To that end, you need to make sure your broker’s spread is as low as possible and that they also keep their non-trading fees to a minimum. You should also try to deal with a broker that will facilitate NZD deposits and base currencies as this can work to limit any conversion costs you may incur.
3. If you’re a beginner, look for a negative balance protection broker
Keeping yourself protected is vital in the forex market. Within Europe due to ESMA regulations, all brokers have to apply negative balance protection. This is not the case in New Zealand and you could find that a big market swing may leave you with a negative balance.
Using a broker that provides negative balance protection will stop this from happening as your position will be automatically closed once your balance reaches zero. It can provide excellent peace of mind to you as a forex trader.
How to verify if a forex broker is regulated in New Zealand
Understandably you may want to verify that the regulation your broker says they have is true and official at some point. This should be relatively easy to do in NZ since brokers are required to be FMA regulated.
In order to do this you should go to the FMA official website and look for the list of licensed providers from the regulator. You should just have to type in your broker’s name and it should appear under the business name of the broker that you can often find at the bottom of their homepage.
Once you have done this, simply read the description and it will inform you about the current regulatory status of that broker.
Is forex trading taxable in New Zealand?
Forex trading in New Zealand is taxable. Capital Gains Tax will be applied on your profits and this amount depends on the bracket within which it falls but this can be anything from 10.5% up to 33%.
We are not professional tax advisors, thus we strongly suggest you contacting local authorities if you don’t know how to manage this aspect.
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