The Foreign Exchange and Foreign Trade Law in Australia
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The Foreign Exchange and Foreign Trade Law in Australia

If you plan on being a Forex broker in Australia, it is important that you understand the applicable regulations. In recent years, the Australian government has taken active measures to crack down on fraud and deceptive practices in the Forex trading industry.

The Role of the Australian Securities and Investment Commission

The Australian Securities and Investment Commission (ASIC) was established in 1989 after the government saw the need for greater regulation of the finance industry. This committee oversees the regulations impacting the finance industry and plays a significant role in drafting these regulations. A significant regulation that brokers should understand is the Financial Services Reform Act. This Act requires that all brokers working in the foreign exchange market be registered with the Reserve Bank of Australia.

Applying for an Australian Financial Services License

Foreign exchange brokers must also be sure that they have an Australian Financial Services license. There are numerous requirements that must be met for those brokers who wish to receive an AFS license. They must show that they possess the relevant education and experience in order to receive a license. They must show that they will comply with the current Australian regulations impacting the Forex trade market.

There are a few exceptions to the license requirement. If a Forex broker only deals with derivatives, he or she does not need to obtain a license. Brokers should make sure that they have a thorough understanding of the exceptions. If a broker is found to be in violation of the license requirement, he or she may have to pay a fine or face other civil penalties.

Submitting Financial Reports

One of the requirements that brokers face in Australia is that they must submit financial reports to auditors. Current financial regulations require that brokers submit these reports as a way to mitigate fraud in the industry. Auditors review the financial reports to ensure that brokers are not violating current regulations and compliance requirements.

Public Records of Formal Proceedings

When a broker is charged with fraud or another crime, he or she may require the assistance of lawyers. The National Futures Association provides the public with a list of current formal proceedings affecting foreign exchange brokers. Individuals can review the list of formal proceedings to understand which brokerage firms are facing serious issues with clients.


Those who intend on becoming brokers in the Forex industry must understand current Australian regulations. The ASIC committee has been outspoken in its criticism of the Forex market. ASIC has publicly stated that it believes the Forex market to involve extreme risks. Brokers may require the assistance of lawyers in the future as ASIC seeks to create additional regulations affecting the Forex market.

This informative article was provided by Alexander Law, a leading law firm based in Brisbane, Caboolture and Melbourne. They specialise in Commercial and Corporate Law and more.