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best ASIC regulated forex brokers

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400:1$100From 1.8 PipsRead the full review
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Introduction to Forex Regulation

Let’s face it: in today’s world, with a myriad of websites and brokers to choose from, looking for the right broker that suits your needs can be challenging and quite time consuming. When it comes to the regulation of forex and CFD brokers, it’s usually fairly easy to figure out which licenses these entities hold. But is it really a seal of approval and of significance if a broker is licensed and regulated with certain industry watchdogs?

*Find the Best Australian Forex Brokers*

For many novice traders who are looking to enter the world of online trading the answer is probably “yes”, and they believe that not holding one of those licenses means that the broker is operating illegally. However, this is not the case for the forex market, as it is an OTC (over-the-counter) market with no specific regulations overseeing it.

There are various regulators and industry watchdogs, but they only cover a specific jurisdiction and do not apply to the entire industry on a global scale. Regulations, unlike legislations, are not written by lawmakers but instead are crafted by bureaucrats based on their understanding of what the market needs in order to function with as little friction as possible. This means that regulations are never fixed and applicable to the whole forex market. Instead they are flexible and can change according to circumstances unlike legislation, which requires amendments before any changes can take effect.

ASIC regulated brokers often enjoy a very positive reputation and there are a number of international heavyweight forex brokers that hail from the vast shores of Down Under.

But why is it that Australian forex brokers that are licensed and regulated by the Australian Securities and Investments Commission (ASIC) are known as trusted and reputable brokers? Who is ASIC, what is ASIC regulation, and why is it not that easy to obtain an ASIC license in the first place?

Who and why ASIC?

ASIC has been the primary regulatory authority for all non-banking financial companies in Australia since 1989 and has gained the reputation of being one of the toughest regulatory agencies in the world of financial trading.

ASIC incorporates several rules and guidelines that are outlined in the Australian Securities Commission Act of 2001 for supervising the activities of financial companies to ensure the unprecedented safety of operations and complete financial transparency. ASIC is therefore mandated by the relevant laws to:

  • Strive to continuously improve the performance of the Australian financial system and all entities operating within it.
  • Ensure that investors and consumers within the Australian financial system participate actively and in an informed manner.
  • Administer the provisions of the ASIC act and also provide enforcement of the laws.
  • Ensure that information about companies and other entities in the financial space is publicly available in a timely fashion.

What are the benefits of using ASIC licensed Forex brokers?

As mentioned before, forex traders looking to invest in forex trading or participate in financial markets shouldn’t confuse regulation with legislation when it comes to forex brokers and the financial services industry.

However, ASIC regulates companies, financial services entities, professionals working in the financial services industry as well as the financial markets. Financial services covered by ASIC regulation include all investment vehicles, deposit-taking businesses, insurance, superannuation, and loans.

In the case of regulation by the ASIC, a distinction must generally be made between two different areas. On the one hand, there is "normal" regulation for all companies that have chosen Australia as their headquarters. In this case, the service provider is fully regulated and controlled by the Australian authority. Besides, it is also possible that Forex brokers or service providers are regulated by another authority and are only registered with the ASIC.

There is a small but fine difference here because the Australian Securities and Investments Commission is not entirely responsible for the provider during registration. Instead, the service provider is already regulated in the country of its head office. This registration then serves only as additional security for the Australian customers, who are certainly pleased about control by the local authorities. Should regulation by the ASIC take place, this will primarily protect the consumer. At the same time, however, the authority also ensures that certain minimum standards for international financial trading are met.

How valuable is the regulation by the ASIC?

For users from Australia, there can probably be no better regulation than that of the home ASIC. In a way, the authority can be compared with the German BaFin or the British FCA, which in many cases also act only as the registering body. However, this alone is sufficient, because this registration is always preceded by regulation by one of the international authorities. If a broker is registered with the ASIC, the users can expect a secure and serious offer in any case.

The same of course also applies to the companies which are officially regulated by ASIC due to their headquarters. These service providers are, so to speak, for the "real" Australians, who also prefer to know the regulation of their broker in the hands of their own authorities. In both cases, however, users do not have to have security concerns.

If a Forex broker is not yet in possession of such a registration or regulation, this does not necessarily mean something is wrong. Many providers who make their portfolios available in Australia have so far only highlighted the regulations of the other authorities, as these are entirely sufficient. In general, it can, therefore, be said that the place of regulation plays a subordinate role. However, it is important that brokers are regulated.

Should I choose a broker regulated by the ASIC?

The ASIC is a trustworthy organisation that is part of the Australian legislature. Therefore, firms regulated under the ASIC are obliged to maintain the integrity of the financial markets by providing high-quality services to the public. Every investor, and no matter if retail or institutional investor, or individual has the right to make claims against financial fraud or abuse and to give guidance to the competent authorities. The ASIC ensures that strict legal action is taken against the perpetrators. ASIC also provides consumers with several online resources to ensure that the companies they deal with are properly regulated and audited by ASIC. ASIC has a special position as it is the only regulator that provides consumers with free education in all financial market-related matters.

Apart from ASIC there are some other strong regulatory bodies out there with strict rules and decent consumer protection. These entities include the Cyprus Securities and Exchange Commission (CySEC) of Cyprus, the Financial Conduct Authority (FCA) of the UK, the National Futures Association (NFA) of the USA, and the Financial Services Board (FSA) of South Africa.

Who are the best ASIC regulated brokers?

The best forex brokers are typically those that are registered with strong regulators and industry watchdogs, such as the ASIC (Australian Securities and Investments Commission) of Australia.

IC Markets is one of the worlds’ leading CFD and forex brokers. They are based in Sydney and are regulated by the Australian Securities and Investments Commission (ASIC). Their True ECN account offers some of the lowest possible spreads available on the market and with trading platforms such as MT4, MT5, and the professional cTrader, there's everything in place for a great trading experience. For example, the average EUR/USD currency pair spread is 0.1 pips and only a small commission of $3.50 per traded lot is applied. With liquidity from over 50 different banks and dark pool liquidity sources, the IC Markets True ECN account was specifically built for day traders, scalpers, and expert advisors (EAs). Their MetaTrader 4 and 5 True ECN servers are located in the Equinix NY4 data center in New York, and their cTrader True ECN server is located in the LD5 IBX Equinix Data Centre in London. Both locations serve to ensure ultra-low latency and the fast execution of all trades.

IC Markets further ensures that all client funds are held safely in segregated accounts in Australian banks. These funds are never used for anything other than to cover the positions opened by their clients. In total, more than 60 currency pairs (forex), 6 cryptos (including Bitcoin), 100+ stocks, 16 indices, and over 19 commodities plus bonds and futures can be traded with IC Markets.

Other excellent brokers that hold licenses with ASIC include IFGM, AxiTrader, VantageFX, ThinkMarkets, easyMarkets, Global Prime, Pepperstone, GOmarkets, and EightCap.

As always, investors should be extremely cautious before engaging in trading forex or CFDs, spread betting, and binary options trading and heed all relevant risk warnings that come with these practices.

Find The Best ASIC licensed Forex Brokers for your needs

To help you find the Forex broker that is best suited to your needs, take a look at our comparison table and ranking of best ASIC regulated Forex brokers above. If you require more in-depth information or are looking for more brokers to choose from, check out our detailed individual broker reviews and additional comparison tables.