Using a regulated broker is possibly one of the most important trading decisions you’ll make. There are unfortunately a lot of scams and scammers operating online and a trading profit isn’t worth anything if you don’t ever get your money back. Reports of unscrupulous brokers disappearing overnight are all too common and it can be hard establishing what is the best approach to stay safe.
Regulatory authorities, which police the financial markets, have adopted a carrot and stick approach. The stick includes punishments for unscrupulous and fraudulent firms and individuals. The carrot is that they operate systems where bona fide and well-run businesses can apply to be regulated and gain a rubber stamp of approval.
#1City Index
What We Liked
- Australian Shares from $5
- Commission Free HK Stocks
- Innovative Platform on App or Desktop
- Deposit from $150 AUD
- Multi Regulated
- TradingView Integration
#2Pepperstone
What We Liked
- Melbourne-based but with global scope.
- Forex specialist, but offers a wide range of other global instruments.
- Great 30-day demo account, which is free to use.
- No hidden costs, no deposit fee, no withdrawal fee, no inactivity fee.
- Strong trading architecture ensures low-cost and reliable trade execution.
- Online learning tools such as webinars and videos are ideal for beginners and great for trading ideas.
Pepperstone Group Limited is authorised and regulated by ASIC. Address: Level 16, Tower One, 727 Collins Street, Melbourne VIC 3008.
#3eToro
What We Liked
- Easy to use functionality — great for beginners.
- Market leader in copy trading and social trading with thousands of traders to choose from.
- More than 13 million existing clients.
- Clients can buy crypto outright.
- Free demo account.
eToro AUS Capital Limited is regulated by the Australian Securities & Investments Commission (ASIC), Australian Financial Services Licence number 491139.
eToro Australia, having its registered office at Level 19, 9 Hunter Street Sydney NSW 2000 Australia.
#4Plus500 (CFD provider)
What We Liked
- Transparent pricing. Tight spreads and no additional execution commissions.
- Zero fees charged on rolling positions, live price feeds, charting packages and cash deposits and withdrawals.
- The option to upgrade risk management and use guaranteed stop losses.
- User-friendly trading platform with great graphics and intuitive functionality.
- Free demo account.
- Trade forex, indices, crypto, commodities, shares, options and ETFs.
- Great learning materials, including the broker’s ‘Trading Guide’, which is ideal for beginners.
- News and research on markets offers up lots of trading ideas.
- Affiliate scheme options available for those looking to generate a secondary income stream.
Plus500AU Pty Ltd is licensed by ASIC and holds AFSL license #417727.
Address: Plus500AU Pty Ltd, P.O. Box H339, Australia Square, Sydney, NSW 1215, Australia.
#5AvaTrade
What We Liked
- A global broker with a reputation for integrity and fairness.
- Appeals to novices, intermediate-level traders, and professional traders.
- Operating since 2006, but still has an appetite to continue innovating to improve client services.
- Winner of the No. 1 Innovation award at the 2021 Forex Broker Awards.
- High-quality multi-lingual customer service available around the clock.
- Free demo account.
- MT4, MT5 and in-house platforms, AvaTradeGO, AvaSocial and AvaOptions to choose from.
- Competitive spread and leverage offering.
- More than 1,250 markets available in indices, commodities, shares, forex, cryptocurrency, bonds, vanilla options and exchange-traded funds (ETFs).
- A 4.8 / 5.0 rating on Trustpilot.
- Great mobile app provisions. Winner of the Best Trading App award at the 2021 Daytrading Awards.
AvaTrade is one of the best regulated brokers in the market and operates globally under license from Tier-1 authorities, including FCA (UK), FSRA (Abu Dhabi), FSCA (South Africa), the FSA in Japan and the Central Bank of Ireland.
Ava Capital Markets Australia Pty Ltd is regulated by the ASIC and operates under license number No.406684. Client funds are held in segregated accounts so that in the unlikely event AvaTrade fails, client funds are protected.
#6Admirals
What We Liked
- Global broker that has been operating since 2001.
- A dedication to developing the trading skills of its clients. Take advantage of the broker’s many educational programmes.
- Choose from a range of accounts with various base currencies so that you don’t incur currency exchange costs.
- Customer support, including live chat and phone.
- Hot on security. Including two-factor authentication.
- Fast execution speeds due to Admiral’s servers being located close to trading exchanges.
- Market coverage includes forex and CFDs on indices, metals, energies, agricultures, stocks, ETFs and bonds.
- MetaTrader MT4 and MT5 platforms.
- Lots of add-ons such as affiliate programs and white label partnerships.
Regulatory details as per the Admirals Australia website: “Admiral Markets Pty Ltd (ABN 63 151 613 839) holds an Australian Financial Services Licence (AFSL) to carry on financial services business in Australia, limited to the financial services covered by its AFSL no. 410681. The information on the Admiral Markets Pty Ltd`s website (www.admiralmarkets.com.au) is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation”. (Source: Admirals)
#7IC Markets
What We Liked
- Sydney-based, offering exposure to global markets in forex, indices, commodities, bonds, and equities.
- Institution-grade trading infrastructure — fast, reliable, low-cost trade execution. 24/7 customer support.
- A choice of three market-leading trading platforms.
- Offers affiliate and white label programs and other partnership-based schemes for those looking to develop non-trading income streams.
- Carries out additional external audits to monitor and improve its levels of service and ensure regulatory compliance.
- Founded in 2007.
International Capital Markets Pty Ltd (ACN 123 289 109), trading as IC Markets, holds an Australian financial services licence (AFSL No. 335692). Address: Level 4/50 Carrington St, Sydney NSW 2000, Australia.
#8FP Markets
What We Liked
- Tight trading spreads and super-fast execution.
- Minimum account opening balance of $100.
- Micro-lot trading.
- ECN trading and VPS hosting ensures trades are executed in deep liquidity pools.
- 24/5 customer support contactable by phone, live chat and email.
- Flexible leverage terms.
- Great market commentary and research — including ‘The Week Ahead’ report.
FP Markets is regulated by the Australian Securities and Investment Commission (ASIC) Australian Financial Services Number – 286354.
The company holds an Australian Financial Services Licence (AFSL) and is fully licensed to provide financial services.
Address: First Prudential Markets Pty Ltd, Level 5, Exchange House 10 Bridge St, Sydney, NSW 2000, Australia.
#9IG
What We Liked
- Multi-asset broker offering more than 13,000 markets including more obscure assets such as bonds, options and ETFs.
- Market-leading proprietary trading platform and alternative option of MT4.
- Research and analysis materials hard to beat in terms of quality and quantity.
- Free demo account.
- Customer support is available seven days a week.
Australian CFD accounts (opened pursuant to IG’s Margin Trading Australian Customer Agreement), opened prior to 15 November 2020 are also provided by IG Markets Limited.
Australian CFD accounts opened from 15 November 2020 are provided by IG Australia Pty Ltd. Address: Level 15, 55 Collins Street, Melbourne VIC 3000. ABN 93 096 585 410. This entity is authorised and regulated by ASIC and has Licence No. 515106.
#10XM
What We Liked
- A global broker offering 16 different trading platforms.
- Low-cost trading on a user-friendly website.
- Free demo account.
- More than 30 languages supported.
- 3.5 million clients from 196 countries and countless industry awards.
- Great for beginners but professional-grade trading — VPS, fractional pip pricing, zero spreads.
- Works closely with clients to develop trading skills.
- Low-cost and user-friendly — ideal for beginners.
- Awarded as Global Forex Broker of the Year by Global Forex Awards 2020.
- Awarded as Best Online CFD & FX Trading Broker – Global by Global Business Awards 2020.
Trading Point of Financial Instruments Pty Ltd is authorised and regulated by the Australian Securities and Investment Commission (AFSL 443670).
Address Level 13, 333 George Street, Sydney, NSW 2000, Australia.
#11FXCM
What We Liked
- A global broker that has been established for 20 years.
- Access to the highly-regarded Trading Station platform and tight trading spreads.
- High-quality add-on services such as Ninja Trader, Trading View, Capitalise All and Trading Signals.
- Free SMS trade alerts and online live classrooms to develop trading proficiency.
- Transparent reporting with data willingly shared on topics such as slippage, which show how efficient the firm’s operations are.
- Free demo account.
- Accesses deep liquidity pools with trading relationships with UBS, Barclays, Citi, Morgan Stanley and other big banks.
- Winner of the Investors Chronicle Top Rated 2020 Forex Trading Platform award.
FXCM Australia Pty. Limited is the holder of an Australian Financial Services Licence (number 309763) which was issued by the Australian Securities and Investments Commission (‘ASIC’) in Australia.
Why Do Brokers Apply to be Regulated?
There is fierce competition among brokers, but well-run firms can still prosper if they find the right niche in the market. Reputable firms that have a profitable business model are in it for the long-haul. They do, however, need a way of distinguishing themselves from the crooks.
They also need their clients to stick around, and that includes client interests being protected. Most brokers make the majority of their revenue from trading commissions, so the greater the number of traders, the better it is for them. Proper brokers don’t make money if you lose, they make it if you trade.
In Australia, the regulatory body overseeing the financial markets is the Australian Securities and Investments Commission (ASIC), which is considered a Tier-1 regulator. It is an independent commission set up in 1998 by the Australian Government. As the country’s national financial regulator, ASIC’s role is to regulate company and financial services, and enforce laws to protect Australian consumers, investors and creditors.
Investors and traders who use a broker that is regulated by the ASIC can take a degree of comfort from the following features:
- ASIC’s basic aim is to promote confident and informed participation by investors and traders. This requires the financial system to be safe, efficient and trustworthy.
- Meeting its targets requires ASIC to license, monitor and assess financial services firms.
- In carrying out its duties, ASIC is committed to receiving and processing information on companies that operate in the financial sector.
- ASIC also has powers to investigate suspected breaches of the law, issue infringement notices and ban individuals and firms from providing financial services.
- Firms that operate under license have to comply with capital adequacy rules and ensure client funds are segregated — if they go bust, your money is held in your name, not theirs.
- Trading limits. In December 2020, ASIC brought in new limits on the amount of leverage available to retail CFD accounts. The maximum moved from 1:500 to 1:30.
Leverage terms by asset type for ASIC-regulated firms supporting retail CFD trading:
- 1:30 for major currency pairs
- 1:20 for minor currency pairs, gold, and major stock indices
- 1:10 for commodities other than gold and smaller equity indices
- 1:5 for individual equities
- 1:2 for cryptocurrencies
The list of what ASIC demands of regulated brokers extends far beyond the above items. The details do also change as new policies come into place, but the general direction of travel is that rules and regulations are becoming tighter with the aim being to protect the end-users.
What Does Being ASIC Regulated Mean?
The rules, regulations and consumer protection are worthy aims, but firms need to work hard to gain and keep an ASIC licence.
To become a regulated broker, firms need to set up a framework that is not only ASIC-compliant, but they must also invest in staff and systems to send ongoing reports to the regulator. This is all very costly, so any broker that goes to the trouble of gaining a licence can be expected to be aiming to be in the broking business for a long time.
The application process itself takes months and involves significant costs. It requires firms to submit extensive documentation outlining details about the business. Topics covered include background checks on the key staff involved and demonstrating the firm is capable of complying with the rules and regulations and reporting obligations.
If you’re looking to place cash with a broker which isn’t going to disappear overnight then using one which is ASIC regulated is a good start. In fact, there’s little upside from wiring money to anyone who is not authorised, no matter what promises they make.
Being regulated is one piece of the jig-saw and those brokers who are ASIC regulated need to generate enough business to cover their costs. This means they have developed exceptional services to attract clients. Some offer premium-grade research, others focus on trading infrastructure to ensure super-fast trading.
Trying a demo account of the below ASIC regulated brokers is not only safe, but will help you learn more about trading and what each broker offers. With so many regulated brokers in the market, there’s no harm in shopping around until you find a best fit.
Final Thoughts
Firms and regulators put a lot of effort into establishing what can make trading and investing safer. This takes some of the hard work out of choosing a broker. If you’re new to trading or an old hand, selecting a broker that is ASIC regulated is a sensible first move.