ASIC’s Role In Forex Trading & Brokers
ASIC requires that all brokers obtain a valid Australian Financial Services License (AFSL) to be compliant with ASIC regulations.
IC Markets Review 2019: Safe FX Broker? What We Know
These regulations include the Corporations Act (2001), and ensure that all laws are correctly applied according to the intention of the Government, and thus ensure the proper functioning of the markets.
The regulations also incorporate the guidelines outlined in the Insurance Contracts Act (1984) and the National Consumer Credit Protection Act (2009), all of which govern various aspects of any brokerage’s business model.
ASIC enforces regulatory compliance and grants traders the ability to seek redress for any infractions of the law by an ASIC registered company, regardless of their country of residence.
If you feel that a company of ASIC regulated service provider has committed fraud or criminal acts, contact ASIC to report the issue.
Proposed on July 1st, 1998 as a result of recommendations by the Wallis Inquiry, the modern ASIC organization was derived from the Australian Securities and Investments Commission Act of 2001, which forced an overhaul of the Australian Securities Commission (ASC) that was created seven years earlier, on January 1st, 1991 by the ASC Act of 1989.
The initial purpose of ASC was to include all of the corporate regulators in Australia together under one national umbrella – thus dissolving the National Companies, Securities Commission and Corporate Affairs offices that had existed in the states and territories.
When the ASC became ASIC on July 1st, 1998, the new organisation took on the responsibility for consumer protection in superannuation, insurance, and bank deposits.
Since ASIC’s foundation, additional responsibilities have been given to the organisation.
In 2002, ASIC became responsible for overseeing all credit facilities, and in 2009 it assumed responsibility for regulating the Australian Stock Exchange (ASX).
How ASIC is Structured
ASIC has wide-ranging regulatory responsibilities and is broken down into different committees and areas of oversight.
- The chair of ASIC reports to the commission along with an external advisory panel, which acts as an advisor to the commission.
- Committees and advisory groups report into the chair on issues ranging from Operations and Strategy to Legal and Regional Commissioners.
- ASIC is split into three main areas of responsibility, each with a deputy chair or commissioner accountable for each division.
These divisions are Investors and Financial Consumers, Markets and Registry.
Key Responsibilities of ASIC
ASIC regulates most financial products on the Australian markets and the Australian Stock Exchanges (ASX).
ASIC’s areas of responsibility include:
- Financial Services
- Securities and Derivatives
- Consumer Protection
- Financial Literacy
- Corporate Governance
ASIC interfaces with the general public via its www.moneysmart.gov.au website which debuted on March 15th, 2011.
The creation of MoneySmart integrated ASIC’s two previous consumer websites into one portal which acts as a single source of legal information for all ASIC regulated Forex brokers.
ASIC Regulated Forex brokers need to comply with strict oversight and processes in order to protect their customers and the financial markets overall.
While Australians are not limited to ASIC regulated brokers, it is highly recommended that a choice in broker includes one with the same regulatory stature to avoid brokers with dishonest practices and keep funds safe.