Why Do Australian Forex Brokers Keep Popping Up In Large Numbers?

Australia has recently received a tremendous boost in its Forex investments and has witnessed a sizeable increase in the global popularity of Australian Forex brokers. The sudden uptick in Australia’s popularity can be attributed to a string of regulatory measures introduced by the ASIC on investor protection and Forex broker regulation. The Australian Securities and Investment Commission (ASIC) has created several new regulatory policies and financial guidelines that concentrate on different factors such as investor protection, financial inclusion, prevention of financial scams, and combating fraudulent activities. The ASIC has also given prime importance to the welfare of all Forex companies and financial institutions domiciled in Australia, so as to ensure that both components in the market are in harmony with each other.
Australia had been a subject of criticism for many years, mainly due to a lack of regulatory supervision of modern financial products such as Forex and CFD trading. An ever-increasing number of scams and fraudulent activities in Australia, as well as in the neighboring New Zealand, had far-reaching effects on the integrity of the Australian financial markets. However, things have changed in the recent past, and the Forex market in Australia is looking as bright as ever. With the ASIC cracking the whip on all reprobates in the Forex market, FX trading has become an incredibly lucrative opportunity in the Australian economy.
The top Forex brokers Australia are now among the top-rated FX brokers in the entire industry, with several Australian Forex companies receiving the highest honors from many international financial watchdogs and other investor-centric organizations. Nowadays, Australia has the lowest instance of financial scams and the lowest rate of broker attrition, owing to a stable and reliable regulatory framework. Therefore, choosing a Forex broker from Australia is now considered to be one of the best options in the market, and is akin to selecting a broker from the US or the EU.

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  1. Excellent regulatory status: ASIC’s excellent regulatory framework is one of the primary reasons why traders can be assured of a high-quality Forex account that is relatively free from any financial intrusion. The primary cause behind broker-client conflicts arises during trading and while making a withdrawal request. The ASIC has made it obligatory for all ASIC regulated Forex brokers to have a transparent brokerage service that does not withhold client payments by citing any fabricated reasons. This brings us to the second reason for choosing an Australian FX broker.
  2. Safety of your funds: ASIC has a strict framework that requires AU Forex brokers to hold its customers’ trading funds in segregated accounts, which can only be used for trading purposes. ASIC conducts periodic audits of its regulated members to ensure that brokers do not misuse their clients’ funds for any other purposes. Therefore, by choosing a top Australian Forex broker, you can ensure the safety of your trading funds.
  3. All Financial products covered: Australian FX brokers offer a broad range of Forex and CFD products without limiting the option to invest in different financial markets across the globe. Most of the companies in the region grants access to some of the most exotic financial products such as CFDs and Binary options, which are currently banned in other jurisdictions. As far as investment is concerned, brokers from Australia do provide a wide range of options.
  4. No limitations or restrictions on Forex & CFD trading: Countries such as the US have a few restrictions that are imposed on traders while investing in the FX markets. Therefore, it would be welcoming for traders to realize that neither the Australian Government nor the ASIC imposes any trading restrictions for Forex or any other allied products. Traders can trade Forex using high leverage, scalp the markets, hedge on the same currency pairs, and even open and close orders without any limitations.
  5. Lower minimum capital requirements for traders: Although the ASIC has specified a minimum of AUD 1 million for Forex brokers for serving clients as an FX brokerage service, traders can open an account for as low as $100. Some Australian brokers even offer a trading account for a minimum capital requirement of $5, while others have VIP accounts that require larger investments. Nevertheless, you should be able to find an FX broker in Australia that offers an account that suits your trading requirements.
  6. Direct Market Access: Australian Forex brokers have now become a pioneer in Direct Market Access accounts that offer ECN conditions through global liquidity providers. Unlike brokers from other countries, Australia seems to be at the forefront of ECN account offerings by providing the best market access protocols that have the least conflict of interest with its clients.
  7. The choice of the trading platforms: Australian Forex brokers have the most varied platform options, including the popular MetaTrader and cTrader platforms. Most companies have chosen the third-party platform option, but a handful of companies have developed a dedicated interface for its clients.

The Popularity Of Direct Market Access Accounts With Australian FX Brokers

One of the interesting aspects of a Forex trading account in Australia is the access to an ECN account that offers direct market access trading. ECN or DMA accounts are considered to be the best accounts for trading the financial markets for numerous reasons. First of all, ECN accounts have no conflict of interest between a broker and its traders, as all orders are passed on to liquidity providers without any role of the broker in filling the order. Secondly, all prices are directly offered by the liquidity provider, which ensures that traders get access to the tightest spreads and instant quotes according to market volatility. Orders are also filled at market price, and ECN brokers guarantee that every order will be filled either entirely or partially according to the volumes. Therefore, slippages are a common occurrence in direct market access trading, but it offers more advantages than any drawbacks.
Professional traders have always utilized DMA and ECN accounts for their trading purposes, but smaller traders have more or less been comfortable with regular market maker accounts. However, with the introduction of ECN accounts into the mainstream retail market, a majority of traders are switching to an ECN account due to the obvious benefits of DMA trading. Therefore, coupled with the stringent conditions imposed by the ASIC on FX brokerage, a large percentage of Forex companies from Australia now offer ECN as a standard, cost-effective option to its clients, without any major fees or added costs.

Are Australian Forex Brokers Completely Free From Fraudulent Activities?

It would be naïve to think that a country has achieved 100% success in combating financial scams. Even established economies such as the US, with its strict regulatory framework of the CFTC and the NFA, often find numerous instances of fraudulent activities and Forex broker scams that are dealt through proactive efforts. These countries and regulators often slap heavy penalties on companies that do not adhere to the standard code of conduct, which serves as a warning for other regulated companies while offering their services to the general public.
Australia is also an advanced economy in the world that has experienced a fair amount of broker scams. Therefore, with the new regulations of the ASIC, the country has indeed managed to reduce the number of broker scams and malpractices to a certain extent. Regardless, there are still companies that fail to comply with the ASIC guidelines, which attract severe penalties, fines, and even a complete ban on the regulatory licenses. Australia is one of the very few countries in the world that interacts directly with the general public to get information about broker irregularities. Australian authorities then act on this information to investigate such claims and take appropriate action as necessary.
Although the ASIC has an effective regulatory structure, there is still a chance that you might have issues with a Forex broker located in Australia. Hence, to stay safe from consumer abuse, you should always choose a broker that has an excellent reputation, along with a good history of fair dealings with its clients. The ASIC has numerous online resources that help traders to report the activities of regulated members, which also serve as a whistleblower program for people who wish to bring financial scams into the concerned authorities’ attention. Currently, the ASIC requires its brokers to resolve all customer issues amicably, and if a consumer is still not satisfied, they may get in touch with the ASIC, other arbitration services, or the court.

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Australia’s Other Investor-Oriented Policies

Australian authorities, through their ASIC and other regulatory initiatives, offer programs such as the MoneySmart program, the Borrowing Policies program, the Superannuation and Investments Program, the Insolvency Rights program, and the Financial Literacy programs, all of which are designed to educate and protect investors. Investors are given the best educational resources on the safe practices of investments, which are supplemented by the Governments numerous initiatives to provide the best platform that is guaranteed to educate investors about their rights.
Financial literacy and ethics seem to be at the forefront of all Australian financial guidelines, which reflects the country’s renewed perspective on investments. The Forex market is growing at a staggering rate, and Australia seems to be prepared for accommodating the pros and cons that are associated with the highly risky investment opportunity. Investors should always make use of these resources available to them, in order to protect themselves from the dangers of the financial markets.