Forex.com ASIC Regulation 2024: Supervision, Investor Protections, and More

Forex.com is a forex and CFD broker that provides online trading services to traders and investors worldwide. It offers a wide range of trading instruments, including Forex, indices, cryptocurrencies, stocks, gold, oil, commodities. Forex.com supports various trading platforms and tools such as Mobile App, Web Trader, MT5, TradingView.

Forex.com is renowned for its regulation by multiple authoritative bodies, including the  CySEC, CFTC, NFA, CIMA, FCA, FSA, MAS, ASIC, CIRO. This multi-regulatory oversight underscores its commitment to maintaining high safety and transparency standards.

In this article, we will explore Forex.com’s ASIC regulation, its significance, the investor protection scheme, and negative balance protection. Additionally, we will provide information on other brokers regulated by the ASIC

Does Forex.com Operate Under ASIC Regulation?

Yes, Forex.com operates under ASIC regulation. The AFS (Financial Services ) number of this broker is 345646. This regulation ensures that the broker adheres to the high standards set by the ASIC, providing a layer of security and trust for its clients. Being ASIC-regulated means that Forex.com must follow strict guidelines to protect client funds, ensure transparency, and maintain the integrity of its operations.

What is ASIC?

ASIC regulation refers to the rules and oversight provided by the Australian Securities and Investments Commission. ASIC, Australia’s national corporate regulator, was established in July 1998. It oversees companies and financial services, including banks, credit unions, and mortgage and finance brokers. 

ASIC enforces laws to protect Australian consumers, investors, and creditors, aiming to create a fair and equitable financial market. It ensures compliance with the Australian Securities and Investments Commission Act 2001. Financial service providers, including forex brokers, must hold an Australian Financial Services (AFS) license to operate. ASIC enforces strict standards on risk management, prohibits certain bonuses, and focuses on consumer protection to maintain market fairness

Why do we trust ASIC regulation?

We trust ASIC regulation for several reasons:

1. Established Authority: Founded in 1998, ASIC is Australia’s national corporate regulator, overseeing corporations, financial markets, and financial services under the Australian Securities and Investments Commission Act 2001.
2. Stringent Licensing Requirements: Financial service providers, including forex brokers, must hold an Australian Financial Services (AFS) license, ensuring they meet high standards for operation.
3. Safety of Client Funds: ASIC mandates that brokers must keep client funds in segregated accounts at tier 1 banks, protecting clients’ money from misuse.
4. Initial Capital Requirements: Forex brokers are required to maintain a minimum operational fund of 1 million USD, ensuring they have sufficient financial stability.
5. Comprehensive Reporting: Brokers must submit detailed reports including annual audit reports, monthly income statements, balance sheets, and daily, monthly, and annual customer transaction reports.
6. Physical Presence: ASIC requires brokers to have a physical office in Australia that clients can visit, adding a layer of transparency and accountability.
7. Strict Regulations: ASIC enforces rules on risk management, prohibits bonuses to avoid conflicts of interest, and focuses on consumer education.
8. Global Recognition: ASIC’s rigorous standards and effective oversight have earned it recognition as one of the most competent regulatory bodies worldwide.

How Can I Verify If My Broker is ASIC-regulated?

To verify if your broker, such as Forex.com, is regulated by the ASIC, follow these steps:

Step 1: Find Broker Information:

First, get the Australian Financial Services License (AFSL) number or the name of your broker. This info should be available on their website. The AFSL number is important because it tells you whether the broker is officially regulated by ASIC.

Step 2: Search ASIC’s Registers:

Next, head to the ASIC Professional Registers page. Type in the broker’s AFSL number or name in the search bar. Make sure you select ‘Australian Financial Services Licensee’ and set the status to ‘All’. This will pull up the broker’s registration details and confirm if they’re regulated by ASIC.

Step 3: Check Authorization:

Once you find the broker’s details on ASIC’s site, look for ‘Licence Authorisation Conditions’. This tells you if the broker is allowed to offer forex contracts or derivatives to retail clients. If they’re not authorized for these services, it means they can’t legally offer forex trading, and you should be cautious.

Step 4: Verify Dispute Resolution Membership:

Look for the broker’s ‘Membership Number’ for External Dispute Resolution on the ASIC page. Then, go to the AFCA website and use the ‘Find a Financial Firm’ tool. Enter the broker’s AFCA Member number or name to check their profile. This ensures the broker is part of a recognized dispute resolution scheme.

Step 5: Match Firm Details:

Finally, double-check that the details on both ASIC and AFCA websites match what the broker provides, like their website and contact information. If there are any inconsistencies, it could be a red flag. If things don’t match up, it’s safer to avoid trading with them to protect your funds

ASIC-Regulated Forex Brokers: Who Else Is on the List?

Forex.com is one of the well-known ASIC-regulated forex brokers. However, other ASIC-regulated forex and CFD brokers can serve as alternatives to Forex.com. These alternatives include:

These brokers operate under ASIC regulation. According to ASIC rules, they offer leverage up to 30:1 and provide investor protection and negative balance protection for retail traders. To learn more about ASIC-regulated forex brokers, you can read our content on the best ASIC-regulated forex brokers.

What Other Regulations Does Forex.com Have?

FCA (Financial Conduct Authority)

Forex.com is regulated by the Financial Conduct Authority (FCA) in the UK. The FCA, established in 2013, is responsible for regulating financial markets and firms in the United Kingdom.

The FCA requires Forex.com to adhere to strict guidelines for financial conduct, including maintaining adequate capital, safeguarding client funds, and ensuring transparency in its operations. This includes keeping client money separate from company funds and providing regular financial reports. FCA regulation helps ensure that Forex.com operates securely and fairly, offering a high level of protection and trust for clients in the UK and across Europe.

CySEC (Cyprus Securities and Exchange Commission):

Forex.com is regulated by CySEC. Established in 2001, Cysec is Cyprus’s financial regulator. Since Cyprus joined the European Union in 2004, CySEC’s regulations align with the MiFID directive, ensuring compliance with EU-wide financial standards and investor protection. This regulation allows the broker to offer services across the European Economic Area (EEA) under the MiFID II directive, ensuring investor protection and transparency. CySEC regulation requires brokers to follow strict guidelines for handling client funds, including segregation and periodic reporting.

CFTC:

Forex.com is regulated by the Commodity Futures Trading Commission (CFTC) for its operations involving U.S. clients. The CFTC, established in 1974, is an independent U.S. government agency that regulates the futures and options markets.

The CFTC requires Forex.com to adhere to strict standards for financial conduct, including maintaining sufficient capital, segregating client funds from company assets, and ensuring transparency in trading practices. The CFTC’s oversight helps protect U.S. investors by ensuring that brokers like Forex.com operate with integrity and comply with regulatory requirements.

NFA:

Forex.com is also regulated by the National Futures Association (NFA) for its operations involving U.S. clients. The NFA, established in 1982, is a self-regulatory organization that oversees the U.S. futures and derivatives markets.

The NFA requires Forex.com to comply with rigorous standards for financial stability, transparency, and client protection. This includes maintaining adequate capital, segregating client funds from company assets, and adhering to strict reporting and operational standards. NFA regulation ensures that Forex.com operates fairly and transparently, providing a secure trading environment for clients in the U.S.

CIMA:

Forex.com is regulated by the Cayman Islands Monetary Authority (CIMA) under license number 144. CIMA, established in 1997, is the financial services regulator in the Cayman Islands, overseeing banks, insurance companies, and investment firms.

CIMA requires Forex.com to adhere to strict regulations for financial stability and transparency. This includes maintaining adequate capital, protecting client funds by keeping them separate from the company’s assets, and providing regular financial reports. CIMA’s oversight ensures that Forex.com operates securely and reliably, offering a trustworthy trading environment for clients in the Cayman Islands and beyond.

CIRO:

Forex.com is regulated by the Canadian Investment Regulatory Organization (CIRO). CIRO, formed in 2023 through the merger of IIROC (Investment Industry Regulatory Organization of Canada) and the MFDA (Mutual Fund Dealers Association), oversees all investment dealers and trading activity in Canada.

CIRO requires Forex.com to meet strict standards for financial stability, transparency, and investor protection. This includes maintaining sufficient capital, safeguarding client funds by segregating them from company assets, and adhering to regular reporting and compliance checks. CIRO’s regulation ensures that Forex.com operates securely and responsibly, providing a trusted trading environment for Canadian clients.

Mas

Forex.com is regulated by the Monetary Authority of Singapore (MAS). MAS, founded in 1970, is the government body responsible for overseeing financial institutions in Singapore, ensuring financial stability and investor protection.

Under MAS regulation, Forex.com must follow strict rules, including maintaining enough capital, keeping client funds separate from company assets, and providing regular financial reports. MAS supervises forex trading and limits the maximum leverage to 1:20 to manage risk. Although there is no specific protection scheme, MAS’s oversight ensures that Forex.com operates safely and transparently. For more details, you can visit their website: 

FSA (Japan)

FSA regulation refers to the rules and oversight provided by the Financial Services Agency (FSA) of Japan. Established in 2000, the FSA supervises financial institutions including banks, insurance companies, and forex brokers to ensure the stability and fairness of Japan’s financial system. It works to protect investors and maintain confidence in the market.

Financial service providers, such as forex brokers, must be licensed by the FSA to operate in Japan. The FSA enforces strict standards on capital requirements, risk management, and transparency. It requires firms to segregate client funds to ensure their protection and implement robust measures to prevent financial misconduct. By enforcing these regulations, the FSA plays a key role in upholding market integrity and safeguarding investor interests.

Frequently Asked Questions

Is Forex.com Considered Safe?

Yes, Forex.com is considered safe. The broker is regulated by seven major regulatory authorities, including the  CySEC, CFTC, NFA, CIMA, FCA, FSA, MAS, ASIC, CIRO. These regulations ensure strict compliance with industry standards and protect client funds.

What is the Maximum Leverage for ASIC in Forex.com?

The maximum leverage offered by Forex.com under ASIC regulation is 30:1 for retail traders. However, leverage may vary based on the tradable assets.

Here are the Forex.com leverage limits under ASIC  regulation:

• Major currency pairs CFDs: 30:1
• Minor currency pairs CFDs: 20:1
• Gold CFDs: 20:1
• Commodity CFDs other than gold: 10:1
• Major stock market index CFDs: 10:1
• Minor stock market index CFDs and other asset CFDs: 5:1
• Crypto asset CFDs: 2:1

What is the Minimum Deposit for Forex.com?

The minimum deposit is $100 for forex.com

Does Forex.com Offer Negative Balance Protection?

Yes, Forex.com offers negative balance protection. All ASIC-regulated brokers must offer negative balance protection. Negative balance protection means that traders are protected from losing more money than they have in their trading accounts. If a trade results in losses that exceed the amount of funds in the account, negative balance protection ensures that the trader’s balance cannot go below zero. This prevents the trader from owing the broker any additional money.