ASIC (Australia) Regulated Forex Brokers

Written by Zornitsa Stefanova

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Zornitsa Stefanova

Zornitsa Stefanova is a Financial Research and Platform Testing Analyst at BestBrokers.com, specialising in hands-on reviews of forex, crypto and stock trading platforms. She evaluates brokerage companies from a user-focused perspective, testing key areas such as account setup, trading conditions, platform usability, available markets and overall reliability.

, | Expert Editor Eugene Lee, CFA

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Eugene Lee, CFA

Eugene Lee, CFA, is the Head of Research at BestBrokers.com, where he applies more than two decades of experience in global markets, portfolio management, derivatives and fintech analysis to the evaluation of online brokers. His background in institutional investing and quantitative research helps ensure broker reviews are based on data, risk assessment and practical trading conditions.

, | Updated: June 25, 2026

The Australian Securities and Investments Commission (ASIC) is the regulatory body overseeing brokers serving Australian traders. It is one of the most well-established regulators in the industry, and authorization from ASIC indicates compliance with stringent regulatory standards. The following brokers operate under a license issued by ASIC. They offer different combinations of tradable instruments, supported trading platforms, deposit and withdrawal options, pricing, and client protection features.

1Plus500 US

Rating: 4.2 ⭐

This content applies only to Plus500 US and clients from the United States. Trading futures involves the risk of loss.

Top Rated

2eToro

Rating: 4.2 ⭐

52% of retail investor accounts lose money

3Fusion Markets

Rating: 4.8 ⭐

74-89% of retail's CFD accounts lose money

4FP Markets

Rating: 4.9 ⭐

73.33% of retail investor accounts lose money

5Eightcap

Rating: 4 ⭐

59.57% of retail investor accounts lose money when trading CFDs with this provider.

6Pepperstone

Rating: 4.4 ⭐

73.7% of retail investor accounts lose money

7XM Group

Rating: 2.7 ⭐

72.82% of retail investor accounts lose money

8IG

Rating: 3.9 ⭐

67% of retail client accounts lose money when trading CFDs with this investment provider.

9AvaTrade

Rating: 4.7 ⭐

57% of retail investor accounts lose money

ASIC Regulated Forex Brokers Ranked by Trustpilot Score

Comprehensive Comparison of the Top 8 ASIC Regulated Forex Brokers

Top 11 Brokers Licensed by ASIC

1. TRADE NOW READ REVIEWTrustpilot Rating

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   1. Fusion Markets

   Fusion Markets is an established low-cost Australian broker offering competitive trading conditions. It is the trading name of FMGP Trading Group Pty Ltd (ABN 74 146 086 017). The entity is regulated by the Australian Securities and Investments Commission (ASIC) under AFSL No. 385620.

   We found that Fusion Markets supports Classic and Zero accounts across MetaTrader 4, MetaTrader 5, TradingView, and cTrader. The broker offers spreads from 0.0 pips on major forex pairs, while its Zero Account charges $2.25 per side, or $4.50 per round turn, on forex and metals, below the industry average. Fusion Markets requires no minimum deposit and charges no deposit fees, allowing us to fund our account via PayPal, PayID, Skrill, and Neteller without extra costs.

   During live testing, we opened a Zero account on MT5 to assess execution and pricing. Our data recorded average spreads of 0.01 pips on EUR/USD, 10.3 pips on XAU/USD, and 3 pips on the US500 index. As an ASIC-regulated broker, Fusion Markets enforces product intervention orders.

   Retail leverage is capped at 1:30 for major currency pairs, 1:20 for minor pairs, gold, and major indices, 1:10 for commodities excluding gold and energies, 1:5 for shares, and 1:2 for crypto-assets. Eligible professional clients can access leverage of up to 1:500 on major and minor forex pairs, gold, commodities, and energies, with limits of 1:100 for indices, 1:20 for shares, and 1:10 for crypto.

   We also verified retail account protections, including client money segregation, transparent execution and pricing, Negative Balance Protection, Product Disclosure Statements, and a Financial Services Guide. Upgrading to a professional account preserves client money segregation and the same transparent $4.50 commission structure, without hidden adjustments.

   Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.
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   2. FP Markets

   Based in New South Wales, FP Markets entered the forex market in 2005 and has served thousands of traders since. The broker offers two main account types, Standard and Raw, with spreads from 0.0 pips and commissions of $3 per side on Raw accounts. Australian traders can access a wide range of global markets through FP Markets, as we verified that the brand is authorised by ASIC under licence No. 286354. Traders can confirm its regulatory details in ASIC’s official licensee register.

   In addition to negative balance protection, Australian traders can use risk management tools designed to limit losses and hedge exposure. Our platform testing also confirmed that FP Markets automates ASIC’s mandatory 50% margin close-out rule, meaning open CFD positions are closed once account equity falls below half of the initial margin requirement.

   When reviewing FP Markets’ ASIC-regulated entity, we verified that retail traders have access to standard CFD leverage caps: 1:30 on major forex pairs; 1:20 on minor forex pairs, major indices, and gold; 1:10 on other commodities and minor indices; 1:5 on shares; and 1:2 on crypto assets.

   Clients can check their eligibility for professional status through either the Wealth Test or the Experienced Trader Test. Those who meet the criteria can unlock higher professional leverage limits. Our platform assessments found these tiers cap major and minor forex pairs and gold at 1:500, major and minor indices at 1:200, commodities at 1:100, shares at 1:20, and crypto assets at 1:5.

   We tested FP Markets’ Raw account via MT5 and recorded spreads of 0.17 pips on EUR/USD, 9 pips on XAU/USD, with a commission of $3 per side, and 2.5 pips on US500.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.33% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
3. TRADE NOW READ REVIEWTrustpilot Rating

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   3. Pepperstone

   Launched in 2010, Pepperstone serves investors in more than 160 countries and operates in Australia under an ASIC license. Clients can trade 93 currency pairs using several-third party platforms including MT4, MT5, TradingView, cTrader, along with their own proprietary trading solution. In terms of supported accounts, customers of the brand can pick between two main tiers: a spread-based Standard and a commission-based Razor account.

   Pepperstone has registered offices in Docklands, Melbourne and is authorized to offer financial services to Australians under ASIC license no. 414530. To verify the license, we checked the brand’s profile on the Australian regulator’s official website.

   During our live infrastructure assessments, we opened a commission-based Razor account and connected it to MetaTrader 5 to evaluate real-world trading costs. Our terminal data recorded average spreads of 0.1 pips on EUR/USD, 9.3 pips on XAU/USD (Gold), and 4 pips on the US500 index. As an ASIC-regulated provider, Pepperstone applies retail leverage limits of 1:30 for major forex pairs; 1:20 for minor forex pairs, gold, and major indices; 1:10 for commodities excluding gold and minor indices; 1:5 for shares; and 1:2 for cryptocurrencies.

   Experienced high-volume traders can request professional status by passing either the Sophisticated Investor Test or the Wealth Test. This unlocks higher leverage: up to 1:500 for gold, major and minor forex pairs; 1:400 for major indices and cryptocurrencies; 1:200 for commodities; 1:100 for minor indices; and 1:20 for shares.

   Our hands-on review found that Pepperstone’s professional tier changes the automated margin close-out threshold from the retail mandate of 50% to 20% on MT4, MT5, and the Pepperstone platform. Retail accounts receive uncapped negative balance protection by law, while professional clients remain eligible for one-time protection capped at $100,000.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.7% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
4. TRADE NOW READ REVIEWTrustpilot Rating

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   4. AvaTrade

   Australian traders can access AvaTrade for forex trading, with 53 currency pairs available across MT4, MT5, WebTrader, the AvaTrade App, AvaOptions, and AvaSocial. AvaTrade also reports competitive spreads and low commission fees. The Sydney-based broker operates in compliance with ASIC regulatory requirements  under license No. 406684.

   AvaTrade’s Australian entity is operated by Ava Capital Markets Australia Pty Ltd. Under ASIC regulatory guidelines, AvaTrade applies several retail account safeguards, including negative balance protection, while leverage is capped at 1:30 for major currency pairs. The broker also enforces ASIC’s product intervention orders, limiting retail leverage to 1:20 for CFDs referencing minor currency pairs, gold, or major stock indices; 1:10 for commodities excluding gold or minor stock indices; 1:5 for shares; and 1:2 for crypto-assets.

   We noted that clients can request an upgrade to professional status by passing either the Sophisticated Assessment or the Wealth Assessment. Based on our platform assessments, AvaTrade’s professional tier increases maximum leverage to up to 1:400 for forex pairs, up to 1:200 for major stock indices, and up to 1:25 for certain cryptocurrencies. Our review of AvaTrade Pro confirmed that while retail clients receive negative balance protection, professional account holders forfeit this safeguard. However, client money segregation rules continue to apply to professional accounts.

   We opened a live Standard retail account through MT5 to evaluate pricing and leverage under real market conditions. Our terminal tracking recorded average spreads of 0.8 pips on EUR/USD, 37 pips on XAU/USD (Gold), and 5 pips on the US500 index.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 57% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
5. TRADE NOW READ REVIEWTrustpilot Rating

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   5. IG

   IG is a well-known broker in the global trading sector and is regulated by ASIC. IG clients can access more than 18,000 markets, including stocks, ETFs, commodities, indices, crypto, and forex. Through the broker’s proprietary platform, forex traders can select from 101 currency pairs, including major, minor, and exotic options.

   IG is authorized to operate in Australia by ASIC under license No. 515106. To verify the company’s ASIC regulation, we checked its profile on the regulator’s official website.

   IG holds client funds in segregated bank accounts, while retail account holders are limited to leverage of 1:30 on major currency pairs and 1:20 on non-major currency pairs, gold, and major stock market indices. Under ASIC’s guidelines, leverage is capped at 1:10 for commodities and minor stock market indices, 1:5 for shares, and 1:2 for crypto assets.

   Traders who want to be categorised as wholesale clients can pass either a Wealth Test or an Experience Test. As professional clients, they are not entitled to certain investor protections that retail traders receive by default. Our platform assessments confirmed that IG Pro clients in Australia can access much higher leverage than retail traders, with margin rates dropping as low as 0.4% on major forex pairs, spot gold, and major indices. This equates to maximum leverage of up to 1:250.

   During our live infrastructure tests, we configured a live IG CFD trading account through MT5 to track raw performance. We recorded real-time average spreads of 0.85 pips on EUR/USD, 10 pips on XAU/USD (Gold), and 4 pips on the US500 index.

   CFDs are complex instruments. 67% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
6. TRADE NOW READ REVIEWTrustpilot Rating

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   6. XM Group

   Launched in 2009, XM is an established forex broker operating in Australia. The broker delivers highly competitive trading conditions marked by low commissions and tight spreads, while ensuring that all client funds are held under ASIC regulatory oversight. The brand operates locally as Trading Point of Financial Instruments Pty Ltd, under license no. 443670 issued by ASIC. The validity of the license and the regulatory status of the brand can be verified on the regulator’s official website.

   Under ASIC’s oversight, XM follows strict retail leverage limits of 1:30 for major currency pairs; 1:20 for minor currency pairs, gold, and major indices; 1:10 for commodities and minor indices; 1:5 for shares; and 1:2 for crypto-assets. We noted that clients who want to apply for professional categorisation can request an upgrade to wholesale client status through their account dashboard.

   If they meet the legal criteria of either the Wealth Test or the Income Test, traders can bypass standard product intervention caps and access institutional tiers. Our platform assessments confirmed that these professional tiers raise maximum leverage to 1:500 for major, minor, and exotic forex pairs, as well as precious metals, 1:100 for indices, commodities, and energies, and 1:20 for shares.

   To evaluate execution quality, live spreads, and terminal response times under real market conditions, we opened a real Ultra-Low spread-based account through MT5. During our live assessments, we recorded competitive and stable average spreads of 0.8 pips on EUR/USD, 24 pips on XAU/USD (Gold), and 5.2 pips on the US500 index.

   Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
7. TRADE NOW READ REVIEWTrustpilot Rating

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   7. Plus500

   Plus500 has been operating since 2008 and offers Aussie traders access to CFDs on 67 currency pairs and 8 forex futures contracts. The broker provides tight spreads with no commission on trades. Plus500AU Pty Ltd is licensed in Australia and publishes details including license numbers and regulators. The broker is authorized to operate by ASIC under license no. 417727. To confirm the validity of the license, check the company’s ASIC profile.

   As a locally regulated provider, Plus500 applies retail leverage restrictions in line with local product intervention orders. Retail leverage is capped at 1:30 for major forex pairs; 1:20 for minor forex pairs, major indices, and gold; 1:10 for commodities excluding gold and minor indices; 1:5 for shares, options, and ETFs; and 1:2 for crypto assets. Clients can upgrade to a professional account and access higher leverage tiers. Professional leverage rises to 1:300 for major and minor forex pairs and indices; 1:150 for gold and other commodities; 1:100 for ETFs; and 1:20 for shares and crypto assets, while options remain capped at 1:5.

   Our analysis of Plus500’s protection mechanisms revealed an unusual structure, as Pro clients retain key safeguards, including client money protection, negative balance protection, and margin close-out protection. However, professional profiles lose access to retail disclosures such as the Product Disclosure Statement (PDS) and Financial Services Guide (FSG), waive their right to recourse through the Australian Financial Complaints Authority (AFCA), and become eligible for institutional trading inducements.

   To evaluate execution quality and live platform pricing under real market conditions, we opened a standard retail account through Plus500’s proprietary platform. During live assessments, we recorded average spreads of 0.9 pips on EUR/USD, 91 pips on XAU/USD (Gold), and 7 pips on the US500 index.

   *This information is NOT relevant to EU residents who are to be serviced by EU subsidiaries of the Plus500 Group, such as Plus500CY Ltd, authorised by CySEC (Reg. 250/14). Different regulatory requirements apply in Europe such as leverage limitations and bonus restrictions.

   79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
8. TRADE NOW READ REVIEWTrustpilot Rating

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   8. Eightcap

   Eightcap offers over 800 trading instruments through several third-party platforms including MT4, MT5, and TradingView. Australian forex traders can access CFDs on 56 currency pairs, with competitive spreads and commission rates available across multiple instruments. Eightcap follows ASIC regulatory requirements, with Australian operations authorized under AFSL no. 391441. Detailed information about the company can also be found in ASIC’s official registries.

   As an ASIC-regulated provider, Eightcap applies standard retail leverage limits: 1:30 for major currency pairs; 1:20 for minor currency pairs, gold, and major stock market indices; 1:10 for commodities excluding gold and minor stock market indices; 1:5 for shares; and 1:2 for crypto assets.

   To bypass these caps, experienced traders can apply for a professional account upgrade by completing an online knowledge assessment and signing a sophisticated investor acknowledgement. Applicants must pass either a Wealth Test, requiring an accountant’s certification of AU$2.5 million in net assets or AU$250,000 in income over the last two financial years, or an Experience Test based on relevant financial industry experience or high-volume trading history over two years.

   Verifying the account as a professional wholesale client lifts domestic retail leverage constraints. Based on Eightcap’s professional account specifications for Australian wholesale users, maximum leverage rises to 1:400 for forex pairs, 1:200 for gold and major indices, 1:100 for standard commodities, and up to 1:20 for shares.

   To evaluate execution quality, live platform pricing, and spread stability under active market conditions, we opened a real Raw Account through MT5. During live assessments, we recorded raw average spreads of 0.1 pips on EUR/USD, subject to a $7 round-turn commission, 12 pips on XAU/USD (Gold), and 4.5 pips on the US500 index.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.09% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
9. TRADE NOW READ REVIEWTrustpilot Rating

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   9. FXCM

   FXCM was founded in 1999, making it one of the longer-established forex brokers. The broker holds licenses from multiple regulators, including a financial services license from ASIC (no. 309763), issued to its parent company, Stratos Trading Pty Limited. Under ASIC regulation, FXCM provides Australian clients with leverage limits, negative balance protection, and other risk management tools intended to help manage exposure across different assets.

   FXCM publishes information about its regulators and the licenses it holds across jurisdictions. Australian traders can also check FXCM’s company details on the ASIC website.

   FXCM applies ASIC-compliant retail leverage limits: 1:30 for major currency pairs; 1:20 for minor currency pairs, gold, and major stock market indices; 1:10 for commodities excluding gold and minor stock market indices; 1:5 for shares; and 1:2 for crypto assets. Experienced traders who pass either the Sophisticated Investor Test or the Wealth Test can apply for wholesale client status, gaining access to lower margin requirements, leverage of up to 1:400, monthly volume-based cash rebates, and an allocation bonus of up to AU$3,000 for successful wholesale client referrals.

   After reviewing the broker’s terms for professional traders, we confirmed that wholesale clients forfeit retail protections such as Negative Balance Protection (NBP), do not receive a Product Disclosure Statement (PDS) or Financial Services Guide (FSG), and lose default access to dispute resolution through the Australian Financial Complaints Authority (AFCA).

   To evaluate terminal stability and real-time transaction costs, we opened a Retail Standard Account through Trading Station, the broker’s proprietary platform. During live tracking, our terminal recorded average spreads of 0.7 pips on EUR/USD, 30 pips on XAU/USD (Gold), and 6 pips on the US500 index.

   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. 
10. TRADE NOW READ REVIEWTrustpilot Rating

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    10. Global Prime

    Global Prime is a low-cost broker serving Australian forex traders, offering 56 currency pairs and spreads from 0.9 pips (Standard) and 0 pips (Raw). Beyond forex, Global Prime’s instrument selection includes CFDs on cryptocurrencies, bonds, commodities, indices, and US stocks. The company operates under ASIC license number 385620.

    Under ASIC regulation, Global Prime caps retail leverage at 1:30 for major currency pairs; 1:20 for minor currency pairs, gold, and major stock market indices; 1:10 for commodities excluding gold and energies; 1:5 for US shares and bonds; and 1:2 for crypto assets.

    Clients who move to a professional wholesale account can access higher limits. Professional leverage rises to 1:500 for forex and metals, while stock indices are capped at 1:100, cryptocurrencies at 1:10, and US shares at 1:20. Soft commodities and energies are also capped at 1:100.

    Australian traders can access MT4 and MT5, and a VPS service is available. Global Prime’s customer support team operates 24/7. We had a useful experience with one support agent, who provided detailed leverage information by account type and asset class before we registered our live account.

    To evaluate live platform pricing, we set up a Raw account through MT5. During our tests, we recorded average spreads of 0.1 pips on EUR/USD and 7.9 pips on XAU/USD (Gold), with both instruments subject to a flat $3.50 per-side commission on FX and metals trades. We also recorded average spreads of 4.01 pips on the S&P 500 (US500).

    Global Prime is a trading name of FMGP Trading Group Pty Ltd (ABN 74 146 086 017) and is regulated by ASIC and licensed to carry on a financial services business in Australia under Australian Financial Services License No. 385620. Gleneagle Securities Pty Limited trading as Global Prime FX, is a registered Vanuatu company (Company Number 40256) and is regulated by the VFSC. The website is owned and operated by FMGP Trading Group Pty Ltd, ABN 74 146 086 017.
11. TRADE NOW READ REVIEWTrustpilot Rating

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    11. Axi

    Axi operates in multiple markets under licenses from several regulators. Australian traders can access Axi’s library of over 260 tradable instruments, with the broker authorized to operate by ASIC (license no. 318232).

    The ASIC-regulated entity, AxiCorp Financial Services Pty Ltd, offers two retail account options: Standard and Pro. The Standard account provides spreads from 0.6 pips with zero commission, while the Pro account offers spreads from 0.0 pips and a round-trip commission of $4.50 per lot. Retail accounts support ten base currencies, including AUD, EUR, GBP, NZD, and USD.

    Retail leverage is capped at 1:30 for major forex pairs; 1:20 for minor currency pairs, gold, and major indices; 1:10 for commodity CFDs excluding gold and minor indices; 1:5 for share CFDs; and 1:2 for CFDs referencing crypto-assets. Eligible Australian traders can open a Wholesale Elite account, with leverage of up to 1:400, spreads from 0.0 pips, and a round-trip commission of $3.50 per lot.

    After assessment and approval by Axi’s Onboarding and Compliance teams, professional clients can access leverage of up to 1:400 across all asset classes, bypassing ASIC’s tiered retail limits. However, Negative Balance Protection does not apply once clients move to the wholesale tier.

    To evaluate pricing under real market conditions, we opened a retail Pro account through MetaTrader 5. During live assessments, we recorded raw spreads of 0 pips on EUR/USD, 9 pips on XAU/USD (Gold), and 3 pips on the US500 index.

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

About the Regulator

ASIC was established as a regulatory body in Australia in 1998 while its role and functions were stipulated in the Australian Securities and Investments Commission Act of 2001. To be eligible to operate in Australia, brokers must obtain a license issued by ASIC. To do that, they are required to meet a list of requirements designed to promote safe and fair trading conditions for Australian traders.

In addition to issuing licenses, ASIC is also responsible for taking regulatory action whenever a company fails to ensure proper trading conditions for its clients or it has breached any of the trading rules and guidelines imposed by ASIC. In the case of misconduct, the regulator can impose financial penalties or revoke the operational license of an entity. The regulatory body also participates in developing new financial market regulations in Australia.

Transparency is an important factor in trading services carried out in Australia. That is why traders can find license information about any company regulated by ASIC on the official website of the authority. News about recent regulatory actions is also available on ASIC’s webpage, keeping Australian traders informed about regulatory developments.

Beyond licensing brokers serving Australian clients, ASIC protects traders by publishing an investor alert list. This resource allows for quick background checks on companies that may raise concerns among Australian traders. The list includes both unregulated brokers targeting Australian traders and fraudulent entities impersonating popular trading brands. If your search for a particular company on the list returns no results, that is a good sign, meaning it has not been flagged as ‘Unlicensed’ or ‘Imposter’ by the Australian authorities.

ASIC continuously monitors licensed entities and imposes penalties when regulatory requirements are breached. Traders may also report any case of misconduct to the Australian regulator. You can read more about the way ASIC handles reports of misconduct here.

Whenever traders have complaints about an ASIC-regulated broker, they must first try to resolve the problem by contacting the broker’s team. Every entity operating under the regulation of ASIC is required to implement internal dispute resolution (IDR) measures, which offers traders a way to address common issues. If the broker is unable to resolve traders’ complaints, they can be referred to the Australian Financial Complaints Authority (AFCA), who offers assistance in resolving disputes between consumers and financial institutions, including ASIC-regulated brokers.

Requirements to Get a License Approval

ASIC operates a detailed licensing process for Australian brokers. To be authorized to offer financial services, including forex trading, to Australian investors, brokers must meet several conditions demonstrating their eligibility to conduct such businesses and keep their customers’ funds safe.

The license application process is straightforward, but companies must provide a set of documents demonstrating their eligibility for ASIC’s approval. This section covers the basic license and compliance requirements forex brokers must meet to be licensed by ASIC.

1. Minimum Capital Requirement: According to the latest amendments introduced in the financial service sector in Australia, to be eligible to offer forex services to Australian traders, companies must have at least 10% of their revenue or a minimum of AU$1 million in the form of net tangible assets (NTA). A minimum of 50% of a company’s NTA must be held in cash or cash equivalent.
2. Regular NTA Updates: After obtaining an ASIC license, entities are required to provide detailed updates about the company’s NTA at the end of the year. These documents are submitted along with other financial statements proving the broker’s income and capability to continue its operations. Quarterly reports of cash flows for the upcoming 12 months are also required to be submitted regularly.
3. Australian Registration Requirements: To be eligible to obtain a forex license from ASIC, brokers, even foreign ones, must have an office located in Australia. The AFSL requirement applies to brokers offering financial services to clients located in Australia, regardless of the broker’s country of origin.
4. Non-Australian License Requirements: Brokers licensed by ASIC and accepting clients from countries outside Australia are required to have licenses issued by the regulatory bodies based in clients’ respective jurisdictions.
5. Clients Funds Segregation: Forex brokers must keep their customers’ funds in a trust, separate from the company’s capital. Since the regulator does not allow brokers to use their clients’ money as working capital, licensed companies must use their own capital to hedge the risk related to providing financial services.
6. Conducting Safe and Fair Trading: Brokers licensed in Australia must become members of the Australian Financial Complaints Authority (AFCA). Licensees must also appoint Responsible Managers and implement internal dispute resolution schemes. Brokers are also required to implement cybersecurity policies, technology, and other tools that protect their customers’ sensitive information and funds.

Typically, if a broker meets all license requirements, the process of reviewing the application and issuing the ASIC license takes between 120 and 140 days. The fees related to the licensing process tend to range between AU$35,000 and AU$50,000.

Is Your Money Protected?

Australian traders benefit from regulatory protections covering their funds, provided the broker they have chosen is licensed by ASIC. Several of ASIC’s licensing conditions specifically address client fund safety.

Brokers must meet a minimum capital requirement to be eligible to apply for an ASIC license. Up until 2013, the minimum capital that could have qualified brokers for an operational license was AU$50,000. Between 2013 and February 2014, the minimum capital condition changed, requiring license applicants to hold 5% of their revenues or a minimum of AU$500,000 as net tangible assets (NTA). At least 50% of that amount had to be in the form of cash or cash equivalent.

As of February 2014, following the Basel Ⅲ norms for revenue and capital, the minimum capital requirement has been significantly increased. The condition to own 50% of the NTA amount in cash or cash equivalent was introduced as a measure to handle any unexpected losses. Since clients’ funds are held in segregated bank accounts, such losses are met only via the company’s own operational capital.

Since March 2021, forex brokers licensed by ASIC have been required to impose mandatory margin (leverage) limits on retail trading accounts. This measure provides additional protection for less experienced traders who may have a lower tolerance for high-risk trading. Below is a list of ASIC’s retail leverage caps in Australia:

• Major currency pairs Contracts for Difference (CFDs): 1:30
• Minor currency pairs CFDs, gold CFDs, major stock market index CFDs: 1:20
• Commodity CFDs (other than gold), minor stock market index CFDs: 1:10
• Individual equities and other asset CFDs: 1:5
• Cryptocurrencies CFDs: 1:2

ASIC also requires licensed brokers to implement tools and measures like margin closeout and negative balance protection. The former requires brokers to close out any positions if the margin is reduced to 50% of the required margin level. The latter is designed to prevent losses from exceeding the amounts traders have deposited into their accounts.

You might also be interested in exploring forex brokers regulated by other institutions

• CySEC (Cyprus) Regulated Forex Brokers
  
• FCA (United Kingdom) Regulated Forex Brokers
• IFSC (Belize) Regulated Forex Brokers
• FSA (Seychelles) Regulated Forex Brokers
• VFSC (Vanuatu) Regulated Forex Brokers

Written by Z. Stefanova | Expert Editor Eugene Lee, CFA