ASIC Regulated Brokers
Compare The Best ASIC Regulated Brokers
Are you interested in finding out more about ASIC regulated brokers in Australia? Or are you searching for a new broker to trade with? Then you’ve come to the right place.
Firstly, what is ASIC?Â
ASIC stands for the Australian Securities and Investment Commission. Founded in 1998, ASIC is a government agency that is tasked with regulating the financial markets in Australia. It’s main role is to enforce & regulate all businesses, entities and financial professionals that operate within the financial services industry. This ensures they all adhere to strict policies and procedures put in place.
ASIC has gained a reputation as one of the toughest regulatory agencies in the world. ASIC requires that all Australian brokers obtain a Australian Financial Services License (AFSL) in order to be compliant.
Recommended ASIC Brokers In 2023:
Leading
CFD Brokers
Who are they?
Standard Leverage
Regulation
Min. Deposit
Segregated Bank Accounts?
ASX Stock Commission
Australia 200 spread
Wall St 30 spread
AUD/USD spread
Spread Type
Trading Platform
Next Steps
Low-Cost
CFD Provider
200:1
SCB
$0
0.07% with $5 min.
0.9pts - FIXED
1pt - FIXED
0.6 pips - FIXED
Fixed
CloudTrade, MT4
Fast-Growing
CFD Broker
30:1 (AU)
ASIC, FCA
$100
No ASX stocks
1pt
From 1.6pts
From 0.5 pips
Fixed & Variable
cTrader or MT4/ MT5
World-Leading
CFD Broker
30:1 (AU)
ASIC, FCA, MAS
$100
0.08% with $5 min.
1pt
1.6pts
From 0.5 pips
Variable
What Are ASIC’s Main Responsibilities?
The main objective of ASIC is to ensure that there are fair trading standards between brokers and Australian consumers. In other words, ASIC is responsible for providing Australian investors a fair, safe & secure place to trade. To do this, ASIC implements a wide range of rules and regulations on CFD brokers that hold an AFSL. This ensures only the very best brokerages can provide financial trading services to Australian citizens.
ASIC’s main goals and responsibilities;
- Maintain and hold CFD brokers to account – i.e. ensure they “play fair” with Australian citizens
- Administer and implement Australian law effectively
- Provide quality information on brokers that can be accessed by Australian consumers
- Protect Australian consumers and investors
What Leverage Can I Get With An ASIC Regulated Broker?
Due to ASICs product Intervention in March 2021 and the resulting leveraged restrictions put in place, the maximum leverage you can now receive with an ASIC broker is 30:1. This is down from an average leverage size of between 200:1 and 500:1 pre March.
That said, some traders may qualify to become ‘Professional’ or ‘Wholesale’ clients. If they are successful in their application, they can get much higher leverage, depending on the broker.
TD365 offer their clients a more responsible rate of leverage of 200:1.
Guidelines For ASIC Brokers
ASIC follows very strict broker guidelines and has also implemented global standards of regulation. This means that brokers must be capitalised to the tune of at least AUD $1.1million in surplus operating funds at all times. What’s more, a brokerage must only ever conduct their banking with a tier 1 bank such as Westpac bank. Furthermore, all client funds must be held in client-segregated bank accounts with a Tier 1 Australian bank. Segregated bank accounts mean a broker can never use client funds for their own business purposes – another layer of client protection.
In addition to the above, ASIC requires that ALL brokers hold an up-to-date and relevant Australian Financial Securities Licence. An AFSL is very expensive and extremely difficult to get. Directors are heavily scrutinised and ASIC ensures the business has adequate funds before an AFSL is approved. The AFS license allows brokers to conduct trading legally in Australia.
A broker’s AFSL number must be evident on their website. This is an added level of protection for investors as they can search for an AFSL number and then check the ASIC register. They can then see if a broker does indeed hold a relevant AFSL. These registers are available on ASICs website: https://connectonline.asic.gov.au/RegistrySearch.
Conclusion – Why Choose An ASIC Regulated Broker?
ASIC has a fierce reputation as a very strict, no-nonsense regulatory body and that should give Australians peace of mind. All ASIC regulated brokers must have an Australian Financial Services License to be compliant with ASIC regulation. If they don’t, they are deemed unregulated and not welcome to offer financial trading products to Australians.
If a broker does not hold an AFSL, you should NEVER trade with them as your money is at risk. ASIC will pursue any unregulated brokers and ensure they are blacklisted.
Finally, ASIC do not just hand out licences to anyone. All brokers and its directors are heavily scrutinised by ASIC before they are successful in their AFSL application. Most applications can take up to 6-12 months subject to this due diligence.
What does all this mean? It means that when you trade with an ASIC-regulated broker, you are trading with a reputable approved broker.
