Regulation & Client ProtectionASICAustralian Securities and Investments Commission
ASIC (Australian Securities and Investments Commission)
Australia's corporate and financial services regulator, which licenses and supervises retail CFD and forex brokers.
What ASIC (Australian Securities and Investments Commission) means
The Australian Securities and Investments Commission is Australia's integrated corporate, markets, financial services and consumer credit regulator. A broker offering CFDs or margin forex to Australian retail clients must hold an Australian Financial Services licence, which is recorded with a licence number on ASIC Connect's professional registers alongside the authorisations it covers and the responsible entity's company details. ASIC licensing historically carried a reputation for permissiveness on leverage, but the regime tightened substantially once the regulator gained and used product intervention powers over retail contracts for difference.
The product intervention order in force since March 2021 sets concrete limits for retail clients. Leverage is capped at 1:30 on major currency pairs, with lower ratios on minor pairs, indices, commodities, equities and crypto assets. Negative balance protection is mandatory, positions must be closed out when equity reaches 50 percent of required margin on a per-account basis, and inducements such as bonuses or rebates offered to open or fund an account are prohibited. Licensees must also hold client money in trust accounts and belong to an external dispute resolution scheme.
Australia has no statutory compensation fund equivalent to the UK's FSCS. If a licensee becomes insolvent, clients rank as creditors against the trust pool and may recover less than their balance, and there is no government-backed top-up for the shortfall. Complaints about conduct go to the Australian Financial Complaints Authority, whose determinations bind the firm but cannot be paid by an insolvent one. ASIC does not review individual trades, guarantee fill quality, or extend retail protections to clients classified as wholesale.
Worked example
An Australian retail client with 1,000 AUD of equity can control at most about 30,000 AUD of notional exposure on EUR/USD. If a weekend gap drives the account below zero, the licensee must write off the deficit rather than pursue the client for it.
Related terms
- Leverage CapA regulatory ceiling on the leverage a broker may offer retail clients, varying widely between jurisdictions.
- Negative Balance ProtectionA rule or policy under which a client's losses cannot exceed the funds in their account, so no debt is owed to the broker.
- Financial OmbudsmanA free independent dispute resolution service that decides complaints against regulated firms, with decisions binding on the firm.
- Stop OutThe margin level at which a broker automatically begins closing open positions to stop losses growing further.
- CFD (Contract for Difference)A leveraged OTC contract to exchange the difference in an instrument's price between opening and closing, without owning it.
Frequently asked questions
What does ASIC (Australian Securities and Investments Commission) mean in forex trading?
Australia's corporate and financial services regulator, which licenses and supervises retail CFD and forex brokers.
How does ASIC (Australian Securities and Investments Commission) work in practice?
The product intervention order in force since March 2021 sets concrete limits for retail clients. Leverage is capped at 1:30 on major currency pairs, with lower ratios on minor pairs, indices, commodities, equities and crypto assets. Negative balance protection is mandatory, positions must be closed out when equity reaches 50 percent of required margin on a per-account basis, and inducements such as bonuses or rebates offered to open or fund an account are prohibited. Licensees must also hold client money in trust accounts and belong to an external dispute resolution scheme.
What is an example of ASIC (Australian Securities and Investments Commission)?
An Australian retail client with 1,000 AUD of equity can control at most about 30,000 AUD of notional exposure on EUR/USD. If a weekend gap drives the account below zero, the licensee must write off the deficit rather than pursue the client for it.
Trade with a regulated broker
Understanding the terminology is the cheap part. The expensive part is choosing a counterparty whose execution, financing and withdrawal behaviour match what the marketing implies. Every broker below has been reviewed with a funded live account, and each review states which legal entity and which regulator applies to the account you would actually open.
Check the licence on the regulator's own register before you deposit — our regulators directory explains what each authority enforces, from leverage caps to compensation limits.