Forex industry is quite strong in Oceania due to the fact that this region has two countries with one of the world’s strongest economies. Both Australia and New Zealand have reputable financial regulatory bodies controlling the stability and safety of the financial sector. It is important to mention that the Forex industry is newly established in New Zealand, with different fraudulent companies trying to scam customers. Thankfully, ASIC (Australian Securities and Investments Commission) together with FMA (Financial Markets Authority) ensures that all the participants of the industry – brokers and traders have fair, safe, and high-quality experience while trading.
The dominant currencies in the region are considered Australian and New Zealand dollar. NZD is in the list of top 10 most used currencies in the Forex industry, while AUD is the fifth most traded currency.
Considering the fact that the Forex world in Oceania is highly regulated, regulatory bodies have imposed restrictions on leverage in order to protect customers’ funds. For instance, in Australia, the maximum leverage is 30:1, while the clients from New Zealand can enjoy high leverage ratios without any limits.
Forex trading is taxable in the majority of countries and this region is not an exception. Mostly, clients are subject to capital gains tax which is up to 23% in Australia and up to 39% in New Zealand.
When it comes to payment methods, the population of Oceania has the privilege of using a variety of payment systems which are quite common in the Forex industry. However, the most popular ones remain PayPal and Kiwi, due to their simplicity and speed of transaction.
Choosing your favorite trading destination in Oceania might not be an easy task especially when you are a newcomer to this huge industry. Customers can either enjoy trading on locally licensed or international platforms and there are so many to choose from. In order to make this process simpler for you, we decided to do research. In the list below, you can check out some of the most reliable and reputable brokerage companies that offer high-quality services with attractive trading features.
CySEC, FCA, ASIC
MT4, MT5, WebTrader
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
MT4, MT5, WebTrader, AvaTradeGO
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
FCA, CySEC, FSA
MT4, MT5, WebTerminal
ASIC, CySEC, FSA, BVI
WebTrader, MT4, TradingView
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
MT4, MT5, cTrader, TradingView
FCA, CySEC, DIFC, CIMA
WebTrader, MT4, MT5, IRESS
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.
Currently, Oceania stands as one of the top destinations for Forex trading and the presence of reputable regulatory bodies is the main reason for that. It is important to mention that trading in Oceania does not have strict limitations and the main purpose of regulations is protecting customers. As we already mentioned, the biggest Forex regulators in this region are ASIC and FMA, with the power of overseeing the entire financial markets of its countries.
ASIC stands for Australian Securities and Investment Commission, and this financial regulatory body not only controls the financial market but also protects the clients’ rights, along with monitoring different financial services including Forex trading. When you are dealing with a Forex broker, it is important that your money is in safe hands – having a license from ASIC means that if something inconvenient happens (e.g you get scammed, the company goes bankrupt, etc), there will be an organization in charge of things. ASIC has the right to protect your personal information and control the insurance of your funds.
Apart from financial protection, ASIC takes some educational duties on itself as well. On their main webpage, clients can find multiple educational materials providing them with guides on how to make smart investments. Overall, Australian Securities and Investment Commission is a quite friendly organization that focuses on clients’ comfort. Additionally, obtaining a license from it is not very hard, meaning that brokers willing to operate legally can follow simple steps and start operating in a quick and comfortable manner.
The Financial Markets Authority or FMA is the New Zealand government agency with the right to promote transparent, efficient, and fair trading experience to traders willing to participate in the Forex market. Forex in New Zealand is newly established, and regulations were formed back in 2011. Before that, the previous regulatory regime failed to provide the industry with the appropriate changes, causing the failure of a lot of companies along with investor losses.
Right now, all Forex brokers operating in the country have to obey general rules that are set out by the FMA. Compared to ASIC, FMA has quite strict guidelines to keep brokers under control – several companies have been issued fines and other penalties for not having their operations transparent for clients. The agency even plans to announce some additional changes, requiring new companies to prepare a minimum capital requirement of $1 million. The rules set out by FMA might sound strict at first, but the organization actually plays a vital role in the proper functioning of the Forex industry in New Zealand. Without such a financial regulatory body, traders would not be protected and it would be easier for fraudulent companies to scam clients.
Trade with an ASIC-Regulated broker – AvaTrade
The tax rate for Forex activities can go up to 23% in Australia and 39% in New Zealand. What this means is that as long as you are someone who trades for a long period of time and makes profits, you have to declare it and act as a responsible citizen. People willing to trade in Oceania must be ready to give up part of their profits to the government as the majority of countries in this region have taxes. To make things clearer, let’s look at actual examples.
Once your annual Forex profits in New Zealand are above 180,000 USD, you will have to pay a Capital Gains Tax of 39%, meaning that $70,200 of your profits are given to the government, which is not a small amount at all. It is a common misconception that trading on international websites from New Zealand will free you from taxes but as long as you stay within the country’s borders, you will have to pay Capital Gains Tax.
People that are participating in the Forex industry in Australia are subject to a tax rate that is up to 23% and is calculated based on short/long term capital gains or losses. It is important to note that this tax does not apply to everyone – only to the people who are not resident of the country but has a source of income within its borders. In other cases, customers might have to pay a 45% tax rate, so it is important that you know all the rules before starting your trading journey. All in all, it was in the case of New Zealand and all the other places in the world, as long as your trading activities aim to gain a profit, you have to pay taxes.
The biggest regional currency pairs in Oceania remain New Zealand and Australian Dollars. As the majority of countries in the region have a strong economic situation, it remains one of the most popular trading destinations for Forex traders.
New Zealand Dollar, also referred to as “Kiwi” proudly stands on the list of 10 most-traded currencies in the world. This is due to the fact that the financial situation of this not-very-big country is very strong. The country is considered one of the least corrupted places in the world, meaning that customers involved in any kind of financial activity can feel safe as their rights will always be put in the first place. A safe trading environment is something that investors from all around the world are looking for and New Zealand is definitely a place for that. After that, there is no wonder why NZD remains one of the strongest currencies in Oceania.
Australian Dollar is also a popular currency in the Forex world. Currently, AUD is the fifth most-traded currency supported by the country’s strong economy that is rich in natural resources and high-interest rates. The good news is that both of these currencies are available for trading and the majority of reputable brokerage companies we know will gladly accept customers from Oceania, offering accounts/currency pairs in NZD or AUD.
Start trading NZD with AvaTrade
Currently, of all countries in Oceania, none have leverage caps, with the exception of Australia where ASIC restricts brokerage companies from using leverage higher than 30:1. However, it does not mean that you can’t control things for yourself. The industry’s standard is somewhere between 200:1 and 300:1, meaning that going above that might not be the best idea, especially with unregulated Forex brokers.
There are multiple brokerage companies that can offer high leverages but they are very risky for beginners and less-experienced traders. That’s why financial regulatory bodies choose to impose restrictions, so customers don’t have the possibility to lose their funds all at once. We advise you to stay within the limits and not risk your financial assets in the hope of having a huge profit, which is definitely possible, but quite rare.
Oceania offers a pretty decent amount of payment systems available for traders in the Forex market. You can either use debit/credit cards such as Mastercard and Visa, e-wallets – Skrill and Neteller, or Wire Transfers. However, POLi and PayPal seem to remain the absolute favorite for traders, as they offer high-quality services including fast transactions and comfortable usage.
Each of the payment methods that are available for traders to use comes with its own specifications and requirements. For instance, on some platforms, several payment methods might have commission fees (usually, good Forex brokers cover it for you, but still). Other than fees, they all can differ in transaction speeds. For instance, PayPal has the shortest waiting period up to 1 working day while credit cards can take up to 5 working days in total.
We advise you to always check terms and conditions before going for a specific payment option as transferring money is one of the frequent activities you will be doing. The convenience in this process is crucial to having a comfortable trading experience.
There definitely are some things that one should keep in mind before going for any Forex brokerage company. We already mentioned that the Forex industry in Oceania is highly regulated, however, that does not mean that there are no chances of you coming across a scammer. The first and most important thing is regulation and finding licensed brokerage companies in this region is not a hard task – you can even go for international websites that we listed earlier in this article as they are all considered safe and trustworthy.
The Forex industry in New Zealand is relatively new and taking its baby steps, meaning that despite the existence of regulatory bodies, there still are chances of you coming across scammers. That’s why we advise you to check license info in advance, which generally is included on the main webpage of a specific broker.
Other than regulation, it is also a good idea to dig deep into the website of a specific broker as it often stores a lot of valuable information about trading features such as spreads, leverage, account types, and payment methods. If possible, you can also go for a demo account that lets you test out brokers’ services for free without risking any of your financial assets.
Finally, it is important that you are familiar with all the basic features that Forex comes with. The trading world is quite complex and if you are a beginner you need a lot of effort and attention to have a pleasurable/profitable trading journey. The good news is that we have made multiple guides for you to check out your knowledge or get more familiar with the important stuff. Be sure that you check out the guide for beginners in Forex and strategies that can help you perform better.
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