Which Brokers Come Under The ASIC Regulation?

The Australian Securities & Investments Commission (ASIC) is Australia’s version of an independent regulatory agency for overseeing activities of companies dealing in financial services. The ASIC was introduced in 1998, but the initial concept of a regulatory organization took root in 1989 under the Australian Securities Commission Act. However, a full spectrum of responsibilities was assumed only during the later years, and the Australian Stock Exchange was brought under the ASIC regulation only in 2009.

Rules That Govern ASIC Forex Brokers

ASIC forex brokersASIC is an independent organization that is deemed to be oriented towards strengthening investor confidence by actively participating in regulating financial firms and imparting useful knowledge to the general public. All financial companies in Australia are required to be registered with the ASIC, and ASIC regulated brokers should adhere to all regulatory guidelines as mentioned by the ASIC from time to time.
The ASIC puts forward regulations under the Australian Securities and Investments Commission Act of 2001 and are also responsible for upholding other legislation guidelines including the Corporations Act of 2001, The Insurance Contracts Act of 1984, and the National Consumer Credit Protection Act of 2009. The ASIC is an all-encompassing regulatory agency that oversees the functioning and conducts of almost all types of financial organizations in Australia. They have a wide range of responsibilities towards the general public and aim to bring down instances of financial fraud and crime by consistently updating their regulatory framework.

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How Does ASIC Regulated Brokers Fare In The Real World

The ASIC is not without controversies, as several consumers, consumer advocates, and even public officials have openly criticised ASIC over its inefficiency at large. The ASIC is rumoured to have triggered the Storm Financial collapse due to its inaction over taking necessary steps to regulate and oversee proceedings of the firm’s wrongdoings. While the Federal Court of Australia rejected these claims during the initial stages of the litigation, ASIC indeed faces the heat from concerned authorities as well as consumers over the claims of negligence that has led to a series of financial collapses.
However, when it comes to regulation and strict control over ASIC Forex brokers, the ASIC is committed to protecting client funds and safeguarding the integrity of the financial economy by preventing firms from indulging in malicious activities. The ASIC codes of practice clearly state the important directions that companies must adhere to while rendering financial services in Australia. The code of practice is updated frequently and even specifies guidelines for online e-Payment gateways and online financial transactions.

ASIC & Its Consumer Friendly Attitude

The ASIC takes pride in being a consumer-friendly organization that is dedicated to the well-being of individual investors. They offer a wide range of free online resources that help the average investor to stay informed about the financial markets. The ASIC is perhaps the only regulatory organization in the world that is committed to educating consumers about all aspects of investing and dealing in the financial markets, which is evident by their free financial guidance portal known as the MONEYSMART.
The ASIC also takes care to ensure that only regulated firms can provide credit or lease to the general public, and in the case of investors having money trapped in insolvent companies, ASIC provides assistance to these investors to retrieve their funds and mitigate the risk factor. The ASIC helps investors to claim lost money in the form of dormant bank accounts, unclaimed insurance funds, or annuities.
The ASIC does not entertain complaints related to any individual cases between an ASIC regulated Forex broker and its client, whereas, the ASIC only takes action against firms and individuals for non-compliance of the ASIC code of practice. Therefore, in the event of a problem, the complainant must first contact the company regarding the problem and reach a resolution. The process is similar to the EU regulations, where if the consumer is unable to reach a favoured settlement with the company, he/she can approach the Financial Ombudsman or the court.

Why Do Brokers Prefer ASIC Regulation?

It is common among leading Forex brokers to choose the ASIC as their regulatory agency. There are multiple reasons behind choosing ASIC as a preferred regulator. The Forex market has a huge potential among traders and investors in Australia, and the ASIC works well to protect their interests. Therefore, Forex brokers are required by law to register under the ASIC if they are to tap into the highly lucrative Australian markets.
The ASIC also has relatively easier guidelines and regulatory framework when compared to other established regulatory agencies such as CFTC, NFA, and the FCA. ASIC also does not impose any trading restrictions, which provide traders with a better freedom to trade the markets according to their preferences.

Should You Choose A Broker Regulated With ASIC?

ASIC is a credible organization that is a part of the Australian Legislature. Therefore, firms regulated under the ASIC must upkeep the integrity of the financial markets by offering high-quality services to the general public. Every investor or individual has the right to challenge claims and provide tip-offs about financial fraud or abuse to the concerned departments, and the ASIC will ensure that severe legal action is taken against the perpetrators. ASIC also provides several online resources to consumers to ensure that they companies that they are dealing with is properly regulated and audited by the ASIC. ASIC has the distinction of being the only regulatory agency that offers free education to consumers regarding all matters related to the financial markets.

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