New Zealand is a picturesque and attractive country, but there are other things to see and do here than just visit famous movie sets from “The Lord of The Rings.” No, we are not talking about the Haka dance, or the thousands of sheep that are walking around on the grassy plains – the subject of our article will be New Zealand Forex Brokers.
For those of you who are not in touch with the current situation, this group of islands in the Pacific is experiencing a rapid growth regarding economy and industry, and the financial sector is also on the rise. What this means is that Kiwis are exploiting their geographical location, i.e. the fact that they are close to Asian and Australian markets, and broker companies from New Zealand are attracting more and more investors.
Forex trading in New Zealand
In case you are not familiar with the concept of forex trading at all, we shall explain the basic principles of this financial activity. In essence, forex trading is a method of buying/selling foreign currencies, and this is also the reason why this sector is called foreign exchange market. Currency pairs can be traded 24 hours a day, five days a week, and one unusual “advantage” of NZ Forex Brokers is that they are the ones who will start the trading day. Because of the geographic position, New Zealand’s financial market is the place where the rest of the world looks each morning. The entire global forex market is huge, and daily investments in this sector can amount to $5 trillion. Since currency values are always going up and down, i.e. they are constantly fluctuating, traders have a lot of opportunities to invest their money and hopefully make a significant profit.
Financial situation in New Zealand
New Zealand dollar (NZD) is the tenth most used currency in the forex world, and this is a pretty impressive ranking for such a small country. However, geography is not always so relevant when it comes to business, and financial operations in New Zealand are stronger than ever.
As a matter of fact, this country is sharing the number one spot together with Denmark as the least corrupt country in the world, according to Transparency International Index from 2013. As we all know, corruption and fraudulent activities are a detrimental element when it comes to financial investments, and Kiwis are proud to offer a safe and legitimate business environment. Forex Brokers New Zealand are also benefiting from this fact, and investors are less hesitant when it comes to creating accounts and depositing money to start trading currency pairs.
Speaking of business, according to the World Bank Report from 2014, New Zealand was the third easiest country in the world to do business, and this element can have a profound significance in attracting new traders and new investors. Forex Brokers NZ are ready, and their trading platforms are full of promotions and deposit bonuses that are designed to attract clients and guide them into the exciting arena of trading in the foreign exchange market.
Who regulates the forex market in New Zealand?
Since currency values are tremendously active, in other words – volatile, this market is extremely fast-paced and exciting. However, another issue can cause “excitement” in this sector, but reasons for this feeling may not be so pleasant and exhilarating. What we mean by this is that foreign exchange market, just like the binary trading world and some similar markets, is highly susceptible to malicious operations. Scams and frauds have plagued this sector in the past, and the situation is much better now since regulatory bodies are taking more and more control over the operations that are going on the forex trading world.
When it comes to New Zealand, the Financial Conduct Markets Act was introduced on April 1st, 2014, and this legal document was designed to “clear the mess” in the financial sector. The FMCA is still active, and New Zealand FX Brokers all have to comply with the rules and regulations that this act prescribes. For instance, the brokers now gain a “derivatives issuer” license, and the reforms from 2014 have tightened the legal framework when it comes to forex transactions in New Zealand.
Despite this fact, experts and analysts still claim that the New Zealand’s government is using relatively limited regulation policies, and this is sometimes deterring certain investors who may have doubts about the safety of the market and the legality of Forex trading.
Another particular feature of the forex scene in New Zealand is that several regulatory bodies are active at the same time, and they simultaneously monitor the market and control the activities and operations of broker houses.
FSPR, or the Financial Services Provider Register, is a government registry, which is evident from the title of the organization, and this agency lists all forex brokers that are active in New Zealand. Retail Forex Brokers New Zealand must have physical offices in the country, and FSPR does not have any enforcement roles regarding irregularities and frauds.
On the other hand, FMA or the Financial Markets Authority has a lot of “powers” when it comes to punishing companies that are not “behaving” in the proper fashion. This fact gives FMA a more proactive position when trying to regulate the market, and all brokers from New Zealand have to be registered with this agency. The integrity of FMA is powerful, and impeccable reputation and long-lasting tradition of this organization are a strong guarantee when it comes to licensing process.
The FMA uses strict guidelines to keep New Zealand Forex trading brokers under control, and fines and various penalties can be issued to those companies who are not conducting their operations in a transparent and professional manner. Furthermore, additional changes in regulations are expected soon, and according to unofficial announcements – the brokers will now have to prepare a minimum capital requirement when they are starting the company. The amount of the net tangible asset will be $1 million, which is the same amount that CySEC is asking in Cyprus.
The importance of regulations
As we already mentioned, certain clients may have fears about the security of the market, and then they can become hesitant about investing the money into the forex market. However, regulatory bodies are there to prevent malicious activities, and that is why the importance of licenses is so immense in the contemporary financial world. If we speak about New Zealand forex brokerages, in particular, the companies who are authorized by the FMA are the ones who are operating in a legitimate and fair manner. Therefore, clients can invest their money and start trading immediately if they feel like it, and their funds and personal information will be safe and secured.
Regulatory bodies can solve any potential disputes clients may encounter along the way, but if the broker house is licensed and verified – there is no reason for such inconveniences. However, not all brokers are the same, and prospective investors will need to do a bit of research before they can get their hands on the best New Zealand Forex broker.
Finding the best NZ forex broker
Since some brokers are simply better than others, clients need to check their features and characteristics before they put their name on the dotted line and sign up with the company. After all, we all want the best possible service for our money, and if we can trade with the best – why not exploit the opportunity? For example, the quality of the trading platform is an essential element in the modern foreign exchange market, and clients should find a broker that offers various software solutions. Naturally, all of these platforms have to be fast and efficient, and the speed of execution also an element that can significantly affect the overall profits in the long run.
Other features that are important, besides safety and security, include the number of spreads, the quality of the customer support, types of banking methods, negative balance protection and so on. By reading reviews and learning as much as possible about the top New Zealand Forex brokers, new traders can obtain the necessary knowledge to make the right call and pick the perfect trading company for their needs and preferences.
New Zealand offers a lot of possibilities when it comes to the currency market, and this country is on the rise when it comes to the economy and financial powers. All of these factors are relevant in this business, and companies who offer trading services are eager to get into the market and start offering their services as FX Brokers New Zealand. Equally, individual traders and investors are looking for ways to make money by buying and selling currency pairs, and people from New Zealand have several legitimate brokers to choose from. Of course, trading in the Forex market is a risky and hazardous activity, and that is why traders need to gain enough experience and knowledge before they can expect the money to come rolling in into their bank accounts.