Founded in July 1998, the Australian Securities & Investments Commission(ASIC) is now positioned as the national corporate regulator supervising Australia’s corporations, markets, and financial services in accordance with the Australian Securities and Investments Commission Act 2001.
ASIC's role is to regulate company and financial services including banks, credit unions and mortgage and finance brokers, and enforce laws to protect Australian consumers, investors and creditors in a bid to create a fair and equitable financial market.
To be able to operate in Australia or offer financial services to Australians, brokers are required to hold a valid Australian Financial Services (AFS) licence. The most important reason why a multitude of leading forex brokers choose ASIC as their regulatory agency is that it works to protect their interests. Moreover, the brokers also want to make use of the highly lucrative Australian market.
ASIC has become one of the most competent broker regulation standards worldwide. It has quite strict requirements, including risk limitation, bonus prohibition, and consumer enlightenment.
However, in recent times ASIC has become the subject of criticism by consumers, consumer advocates and public officials over its inaction and inefficiencies in protecting consumers from large financial instiutions.
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1. Safety of Client Funds：
A segregated account at a tier 1 bank.
2. Requirement on Forex Brokers' Initial Capital:
A minimum operational fund of 1 Million USD.
3. Requirement on Forex Brokers' Reports：
Annual audit report; Monthly income statement; Monthly balance sheet; Daily, monthly and annual customer transaction report.
A physical office that can be visited in Australia; Risk limitation; Bonus prohibition; Consumer enlightenment.
Generally speaking, ASIC-regulated broker profile will be found at the Professional Registers page on ASIC website. Try to find it and check if it will match the info from the broker website.
The detailed steps are as follow:
1. Find the licensed/reference no.(preferred) or name of the forex broker, which you can get from the broker's website;
2. Enter the no. or name into the search bar at the Professional Registers page on ASIC website, select Register broker type( mostly for 'Australian Financial Services Licensee') and Status(Select All) ;
3. And you'll get the broker's contents on ASIC website. At this time you will click the 'Licence Authorisation Conditions' and check if the broker has the authorization to provide 'foreign exchange contracts or derivatives' to retail clients; If no, it means that it's unauthorised to provide forex trading services and watch out the broker. If yes, go ahead the following step.
4. Get the 'Membership Number' from External Dispute Resolution at the ASIC page and go ahead to the 'Find a financial firm' page on AFCA website. Enter the broker's AFCA Member number or Name on the search bar and you'll get the broker's profile. If all the above steps have been done, don't forget to check the most important information: check if the firm details published on ASIC and AFCA website matches the ones you'll go to trade with, especially the website and email etc. If no, please keep away the broker because it's probably an unauthorized firm and your money will fall in danger.
When you have disputes with a ASIC-regulated broker, you can proceed the following ways:
1st way: The recommended way is to contact the broker directly and discuss with them to find a win-win solution.
2nd way: If you're not satisfied with the broker's solution, try to contact AFCA in Australia, which helps to solve the disputes between the forex broker and the investor.
Online Complaint Process Instruction: https://www.afca.org.au/make-a-complaint
Online Complaint Form: https://ocf.afca.org.au
3rd way: If the first 2 ways above can't solve the dispute, the last way is to issue a case to the court in Australia.
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