Trading The Markets With ASIC Forex Brokers
ASIC is one of the oldest regulators in the market, having started off its journey as the Australian Securities Commission (ASC) in 1989. Over the years, the agency witnessed a host of changes in the way they operate by adding multiple industries under its regulatory oversight and was renamed as the Australian Securities and Investments Commission in 1998.
The ASIC is responsible for overseeing the activities of a wide range of industries ranging from insurance companies, corporate governance, securities and investments, fund management, credit organizations, and other financial services. ASIC regulated brokers are now considered to be one of the best in the industry due to the advanced regulatory oversight and several reforms that enabled ASIC to become a highly preferred regulatory agency. In its latest avatar, the ASIC is responsible for regulating the Australian Stock Exchange and acts as an independent regulatory organization for all market participants, including brokers as well as investors.
What Are The Integral Points Of ASIC Forex Broker Regulation?
ASIC had a shaky start to the proceedings by inviting criticisms from several public agencies, including both the Government as well as other private institutions. Although ASIC is entrusted with the task of regulating companies in both the financial industry as well as corporate governance, the ASIC had lacked in its framework to eliminate financial frauds of a larger magnitude sufficiently. Although the ASIC has not received a reprimand for any of its action, the criticisms did pave the way for ASIC to clean up its act and get more involved with its member firms to ensure that all consumer rights are safeguarded under the law. Here are a few reforms that currently help ASIC to counter financial fraud and malpractice in the Australian capital markets:
- All ASIC Forex brokers should have a minimum of AUD 1 Million in operating capital, which was raised from an initial amount of AUD 50,000 during the early years. The increase in working capital is in line with other renowned regulatory agencies that stipulate a minimum cap on the operating capital to ensure that a broker can sustain market events and high volatility without going bankrupt.
- FX brokers should be regulated by the ASIC to offer Forex trading products and allied services to Australian citizens. ASIC also stipulates that brokers should have a representative office in Australia, and cannot operate from any overseas location. Such a move forces ASIC regulated brokers to set up a full-fledged branch in Australia, which improves accountability and confidence among traders while investing their money.
- ASIC requires every regulated member to be completely transparent about their financial dealings, and should submit periodic audit reports to ensure that companies adhere to a strict code of conduct. The ASIC works tirelessly towards ensuring an open and honest financial marketplace by overseeing the activities of every regulated firm, and the agency is quick to penalize and award sanctions to any company that has indulged in fraudulent practices.
Other Forex Brokers By Regulation Authority
Why Do Traders Prefer ASIC Forex Brokers?
ASIC regulated brokers enjoy a special place among traders due to the higher number of genuine and honest brokers that operate out of Australia due to the new and improved ASIC regulations. Australian Forex brokers are now considered to be at par with other regulatory agencies such as the FCA and the NFA, without the usual drawbacks. Here are a few advantages of choosing ASIC regulated Forex brokers:
- ASIC takes extra care to ensure that all brokers can guarantee the safety of their client funds by keeping the funds in segregated accounts in the leading banks of Australia.
- ASIC does not impose any limit on the maximum leverage, which is known to inhibit the trading freedom for scalpers or high-risk traders.
- ASIC does not have any contradictory rules of trading such as the FIFO rule or the no hedging rule, which is one of the major disadvantages of choosing brokers that are regulated by agencies such as the NFA and the CFTC.
- All brokers that are part of the ASIC regulatory framework should offer a fast and efficient platform for trading. Trading should be seamless, and there should virtually be no interference from the broker into a trader’s position. ASIC has banned brokers from trading against their clients, thereby preventing any instance of conflict of interest.
- ASIC brokers should offer the best in customer satisfaction by ensuring that all consumer complaints are resolved in the best manner. ASIC Forex brokers are known to be consistently at the top of broker rankings when it came to customer satisfaction and a trader-friendly attitude.
Why Do We See A Lot Of Brokers Regulated By The ASIC?
Although ASIC has stipulated strict laws for broker regulation, Australia provides a safe and secure environment for companies with an investor-friendly attitude. Australia provides several incentives for enterprises that are willing to set up a business in Australia. The recent uptick in trust, as well as the business-friendly environment, has enabled several international companies to open up a Forex brokerage in Australia, thereby increasing the number of ASIC regulated brokers in the Forex market.
How To Choose A Preferred ASIC Broker?
ASIC is home to some of the largest names in the industry, as leading FX brokers from all over the world have a significant presence in Australia. Several mainstream brokers with multiple regulatory statuses are bound to have a valid ASIC regulation, which makes it easy for traders to choose an ASIC regulated broker without much difficulty. Here is a list of ASIC Forex brokers that have been tested extensively for their efficiency, reliability, and customer satisfaction: