Australian Forex Traders Will be Interested in Learning More About ASIC Regulated Brokers.
Finding a licensed and regulated broker is an important part of Forex trading, and for anyone residing in Australia, it’s important to choose ASIC forex brokers. ASIC stands for Australian Securities and Investments Commission, which is the body that is responsible for Australia’s corporate, markets and financial services. Its job is to ensure that they operate in a fair and transparent way. Established by the Australian Securities and Investments Commission Act 2001, ASIC is an independent Commonwealth Government body. The Act imposed a certain number of requirements on ASIC, which include the following:
- The maintenance, facilitation and improvement of the performance of the country’s financial systems
- The promotion of confident and informed participation by investors
- The administration of and enforcement of financial regulatory laws in an efficient and speedy manner
- Processing and storage of information
- The granting to the general public of access to information regarding companies and other bodies.
ASIC obviously has significant powers in Australia, but how does it fare in other parts of the world?
What does the rest of the Forex world think of ASIC?
Unfortunately, we have to report that ASIC has received its fair share of bad press. In the past, it has been openly criticised for its inefficiency by consumers, consumer advocates, and public officials. There are even those who have said that ASIC played a big part in the Storm Financial collapse. It has been said that its inaction and failure to take necessary steps and oversee the firm’s misconduct triggered its collapse. ASIC was actually cleared of any wrongdoing by the Federal Court of Australia, but still had to suffer the wrath of authorities in relation to claims of negligence.
In spite of various misgivings, ASIC is committed to regulating and strictly controlling ASIC Forex brokers, as well as protecting client funds and safeguarding the honesty of the financial economy, and preventing firms from taking part in fraudulent activities. If a Forex broker wishes to offer financial services in Australia, compliance with the regulations specified by ASIC is a requirement. There is a code of practice that is updated regularly, and there are even sections that specify guidelines for online e-payment gateways and financial transactions carried out online.
ASIC is an independent Commonwealth government body that has the consumer at the heart of its operation.
ASIC is dedicated to taking care of individual investors, and takes pride in the fact. A range of free online resources are made available so that the average investor is able to keep themselves informed about anything related to the financial markets. It is committed to educating consumers with regard to investing and dealing in the financial markets. This is possibly one of only a few that provide such a service, and it is accessed via a free financial guidance portal called MoneySmart.
Unlike the NFA and CFTC in the USA and the FCA in the UK, ASIC does not provide a service with regard to consumer complaints, which is a little disappointing; but maybe this will be a future improvement the Commission makes in time. ASIC only takes responsibility for ensuring that firms and individuals are compliant with the Commission’s Code of Practice. This means that consumers have to first make a complaint with the broker regarding the issue, and hopefully reach a resolution. Failure to reach a suitable settlement will require the complainant to approach the Financial Ombudsman or the court for suitable compensation.
On a more positive note, ASIC also ensures that only regulated firms are able to provide credit or lease to the general public. Should an investor have money that is tied up in an insolvent company, ASIC will provide assistance in the retrieval of funds, taking any risk factors into mitigation. It is able to help investors who have lost money in a dormant bank account, an unclaimed insurance fund or annuity.
Becoming an ASIC-regulated broker is the preferred course of action.
A number of the leading Forex brokers choose ASIC as their regulatory agency, and this is for a number of reasons, the most important of which is that it works to protect their interests. A Forex broker who operates in Australia is required by law to be licensed and regulated by ASIC; if, of course, they want to make the best of the highly lucrative Australian market.
Other reasons are the relatively easy guidelines and regulatory framework that have to be complied with in order to offer financial services, especially when compared with a number of other more established regulatory bodies. Traders are also able to enjoy better freedom because ASIC doesn’t impose any trading restrictions, thereby allowing traders to trade the markets as they want.
Why it’s important to choose a Forex broker regulated by ASIC
ASIC is a part of the Australian legislature, which makes it a very credible organisation. Any broker regulated by ASIC has to be prepared to safeguard the integrity of the financial markets by offering the best possible services to the public in general. Investors or individuals are entitled to challenge claims and advise the relevant departments of any fraudulent activities or abuse of the system. ASIC ensures that legal action is taken against any perpetrators, and sometimes the penalties are very severe. For the benefit of consumers it also provides a number of online resources for consumers to ensure that the companies they are dealing with are correctly regulated and regularly audited by ASIC. It is, in fact, the only regulatory body that offers such a service, which in ours eyes puts it head and shoulders above a number of others in relation to consumer education regarding the financial markets.
So, there you have it. We consider ASIC to be up there with the best of them. It may have a chequered history, but it is doing everything it can to take care of the customer and safeguard their investments. Any traders who reside in Australia, and even those who live elsewhere, won’t go far wrong if they choose ASIC-regulated brokers.