February 18, 2014

The Impact of Australian Forex Brokers Regulations

Australian Forex Brokers Regulations

This article looks at the regulations the Australian forex brokers operate under.

When you look at forex brokers you need to consider the country they are based in.  You need to do this to determine the regulations that they need to adhere to.  The regulations that affect the broker will often impact the trading that you can do.  If you are going to use Australian forex brokers then you need to consider what the regulations are and how they affect you.  There are some countries that have regulations for the brokers that do not affect the traders.  You should consider this when you are looking at the different forex brokers you can use.

The Regulations Australian Forex Brokers Adhere to

The regulations that the Australian forex brokers operate under are not that intense.  The brokers based in the United States of America are the ones that have been hit the hardest by the regulations.  In Australia the regulations relate to the amount of capital that the broker needs to have and the membership to the regulatory body they must have.

Before the regulations where put in place financial service providers in Australia had to have capital of AUD50000.  This is the amount that the forex brokers needed to have.  However, since the implementation of the regulations the forex brokers will need to have a minimum capital of AUD500000.  This offers the trader more security when they are using the broker.

Another aspect of the regulations is that the Australian forex brokers must register with the regulatory board.  If they do not then they are not cleared to offer their services.  If they do then they are doing this illegally and you should be wary of these brokers.

The Impact on the Trader

When you look at the regulations that the Australian forex brokers operate under you have to consider what the impact is on you.  There is no negative impact of the regulations in Australia.  As there is no limiting of the services that the brokers can offer you do not have to change the trading that you complete.

What you are given with the regulations that are in place is security.  When the broker needs to have larger capital it means that they can buffer the services that they offer you.  This means that there is a lower chance of the broker going under and you losing everything.

Checking the Regulatory Board

When you look at the Australian forex brokers you should consider looking at the regulatory board’s website.  When you do this you will be able to tell which brokers are legitimate and which are scams.  If the broker is not listed as one of the approved brokers by the board then you should not use them.  This will mean that the broker is not adhering to the regulations of the country and this could mean that they are operating fraudulently.

When you look at the brokers you are going to use you need to consider the regulations that they work with.  If the broker does not adhere to the regulations then you should consider whether or not you should use them.



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