The regulation of Forex in New Zealand is enforced by three separate regulatory bodies, each responsible for their own specific field:
Given that New Zealand is in the early stages of structuring their regulatory framework, forming their regulation in 2011, it is only natural that it is plagued by the same issues that any emerging Forex market is, with scammers attempting to exploit the market.
New Zealand Forex market is growing fast, with NZD gaining traction on the international market, currently being the tenth most popular currency in global Forex trading, making it one of the major currencies.
New Zealand traders use a variety of payment systems for their deposits and withdrawals, including options like Paypal, POLi, MasterCard, Visa, and the old fashioned Wire transfers.
One of the most recent development for Kiwi traders was the introduction of Capital gain tax on Forex profits, starting from May 2021, being set at 39% of annual profits.
As the Forex market in New Zealand is in its early stages, finding the best Forex brokers in New Zealand is not an easy feat, simply because there aren’t too many locally regulated brokers that truly stand out. Due to this, the next best alternative that Kiwi traders can go for are ASIC regulated brokers. But fear not, for we have made sure to research and look into some of the best performing ASIC brokers on the market today, which you can find in the table below.
5$
CySEC, FCA, ASIC
30$, 50%+20%
30:1
2009
MT4, MT5, WebTrader
$100
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
1:400
2006
MT4, MT5, WebTrader, AvaTradeGO
USD 5,000
FINMA, FCA, ASIC, FSA, MAS, AFM
N/A
1:30
1992
SaxoTraderGo, SaxoTraderPro
$5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
1:1000
2010
MT4, MT5
15
CySEC
30%
1:500
2015
MT4, WebTrader
$250
FSCA
1:200
2012
MT4, WebTrader
100$
FCA
N/A
30:1
2008
Custom
$10
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
N/A
1:1000
2013
Proprietary
10 USD
FCA, CySEC, FSA
N/A
1:Unlimited
2008
MT4, MT5, WebTerminal
$10
N/A
N/A
1:500
2019
MT4, custom
$10
1:500
MT4
250$
FCA, NFA
N/A
200:1
1999
MT4
$25
ASIC, CySEC, FSA, BVI
50%
1:400
2001
WebTrader, MT4, TradingView
100
FCA, CySEC, DIFC, CIMA
N/A
500:1
1977
MT4, MT5
$100 AUD
ASIC
N/A
500:1
2005
WebTrader, MT4, MT5, IRESS
AUD$200
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
N/A
1:400
2010
MT4, MT5, cTrader, TradingView
$50
N/A
N/A
1:500
2015
MT4
1 USD
ASIC, FCA
10 USD
1:500
2005
MT4, MT5, WebTrader
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
It was on April 1st, 2014, when the Financial Conduct Markets Act was introduced, with the purpose of this legal document being to introduce greater stability and security to the financial sector. The FMCA is still active, and NZ Forex 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 New Zealand’s government is using relatively limited regulation policies to monitor the Forex NZ market, 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 three separate regulatory bodies are active at the same time, with each of them having their own respective fields of responsibility, collectively ensuring the security of Kiwi traders.
FMAThe FMA or the Financial Markets Authority, is a regulatory body responsible for setting out the general rules that all Forex brokers operating in New Zealand have to abide by. It’s also a body responsible for penalising brokers that are observed in illicit activities. The FMA uses strict guidelines to keep New Zealand brokers under control, issuing fines and various penalties to those companies who are not conducting their operations in a transparent and professional manner. Furthermore, additional changes in regulations are expected sometime in 2022, 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 Cyprus Securities and Exchange Commission (CySEC) is asking in Cyprus.
This fact gives FMA a more proactive position when trying to regulate the market, playing the vital role in ensuring the proper functioning of NZ Forex trading. The integrity of FMA is solid, and the impeccable reputation and long-lasting tradition of this organization are a strong foundation ensuring a bright future for New Zealand traders.
The FSP, or the Financial Services Provider Register, is a government registry, with whom all the brokers operating in New Zealand registered. The agency regularly updates the list of all Forex brokers that are active in New Zealand, and provide a reliable source for traders when checking the legitimacy of the broker they are planning to sign up with. Retail Forex brokers New Zealand must have physical locations in the country, and FSP does not have any enforcement roles regarding irregularities and frauds.
Finally, the FSCL, or the Financial Services Complaints agency, is a regulatory body that handles all the claims or the complaints made by either brokers or traders in New Zealand.
Trade with AvaTrade – an FMA regulated broker
As of May 2021, your annual Forex profits that are over 180,000 USD are a subject to the Capital Gain Tax of 39%. Although it may seem like a significant portion of your profits, when compared to the same tax in Australia, which is at 45% of your annual profits, Kiwi traders are actually in a comparably better position.
Most definitely yes, all NZ Forex brokers have NZD currency pairs available, and as a matter of fact 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.
The 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. Forex Brokers New Zealand are also benefiting from this fact, as investors are less hesitant when it comes to creating accounts and depositing money to start trading currency pairs in the country. The safety of the trading environment is crucial for the traders in the first place, as they will need to spend less time and energy worrying over the possible frauds and scams.
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 prepared to host the traders from New Zealand, and their trading platforms are full of promotions, educational materials, deposit bonuses, and other goodies that are designed to attract clients and guide them into the exciting arena of trading in the foreign exchange market.
Start trading NZD with AvaTrade
As of summer 2021, New Zealand Forex brokers are not a subject to cap on leverage. Although no official cap exists, you should expect a market average to be around 1:300, and anything above that can be considered suspicious if the broker does not hold a local license. Thus we strongly advice to refrain from trading with such brokerages, and if possible report them to relevant authorities.
There is a variety of payment options available if you are trading from New Zealand. Some of the most popular options include MasterCard, Visa, Paypal, POLi and the good old wire transfer. Each of these systems have their conversion own commission fees, but Forex brokers usually cover those for you. Most Kiwis prefer to use POLi or Paypal due to the speed of transaction, which is usually around 1 working day, next is Visa or MasterCard, which is up to 5 working days, followed by the wire transfer, which can take up to 10 working days.
Trade on Avatrade using PayPal
What makes trading Forex in New Zealand particularly special is its geographic position, as New Zealand traders are the ones that start the trading day, with the rest of the world looking at it each morning.
One thing to look out for, especially if you are just starting your trading career, is the fact that the entire Forex industry in New Zealand is essentially making its baby steps, and just like with any other emerging market, where there is a lack of experience, there are those who are looking for ways to exploit it, and scammers are out to pray upon inexperienced Kiwi traders who are just now starting their trading journey. While the regulatory framework does seem to be well set out, caution is still of utmost importance, and doing rigorous research before you sign up with a broker is essential. To make sure that your are equipped with all the necessary tools to succeed, we offer numerous guides for beginner traders, focusing on crucial aspects, such as how to read currency pairs, picking trading strategy suited for you, and explaining trading basics that every trader should know.
In order to ensure the safety of traders, Forex brokers in New Zealand are obliged to provide Negative Balance Protection, which is enforced through margin calls, meaning, that if you lose 90% of your equity in a single trade, all of your position will be closed, ensuring that you do not go into debt with your broker.
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