Oanda ASIC Regulation 2024: Supervision, Investor Protections, and More

Oanda 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, metals, share, commodities, cryptocurrencies.. Oanda supports various trading platforms and tools such as MT4, MT5, WebTrader, NinjaTrader, MotiveWave, MultiCharts, TradingView and more..

Oanda is renowned for its regulation by multiple authoritative bodies, including the ASIC, CFTC, IIROC, FCA, PFSA, MAS in Singapore, FSA in Japan, FSC in BVI. This multi-regulatory oversight underscores its commitment to maintaining high safety and transparency standards.

In this article, we will explore Oanda’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 Oanda Operate Under ASIC Regulation?

Yes, Oanda operates under ASIC regulation. The AFS (Financial Services ) number of this broker is 412981. 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 Oanda 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 Oanda, 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?

Oanda is one of the well-known ASIC-regulated forex brokers. However, other ASIC-regulated forex and CFD brokers can serve as alternatives to Oanda. 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 Oanda Have?

FCA (Financial Conduct Authority)

Oanda 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 Oanda 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 Oanda operates securely and fairly, offering a high level of protection and trust for clients in the UK and across Europe.

CFTC:

Oanda 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 Oanda 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 Oanda operate with integrity and comply with regulatory requirements.

IIROC

Oanda 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 Oanda 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 Oanda operates securely and responsibly, providing a trusted trading environment for Canadian clients.

MAS in Singapore

Oanda 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, Oanda 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 Oanda operates safely and transparently. For more details, you can visit their website: http://www.mas.gov.sg.

FSC in BVI:

Oanda is regulated by the Financial Services Commission (FSC) in the British Virgin Islands (BVI). The FSC, established in 2001, is the regulatory authority overseeing financial services and institutions in the BVI.

The FSC requires Oanda to comply with strict regulations, including maintaining adequate capital, protecting client funds by keeping them separate from company assets and ensuring transparent financial reporting. This regulation helps ensure that Oanda operates securely and reliably, providing a trustworthy trading environment for clients in the BVI and internationally.

PFSA

Oanda is regulated by the Polish Financial Supervision Authority (PFSA), which oversees financial markets and firms in Poland. The PFSA is responsible for ensuring the stability, transparency, and integrity of the financial system, providing a robust regulatory framework for the operation of financial institutions.

Under PFSA regulation, Oanda is required to comply with strict guidelines that include maintaining sufficient capital reserves, safeguarding client funds, and ensuring transparency in its operations. This regulation mandates the segregation of client funds from the company’s assets, enhancing the safety of client investments. By adhering to these standards, Oanda demonstrates its commitment to providing a secure trading environment, fostering trust and confidence among clients in Poland and throughout Europe. The oversight by the PFSA further reinforces Oanda’s dedication to operating with integrity and accountability in the dynamic forex market.

FSA in 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 Oanda Considered Safe?

Yes, Oanda is considered safe. The broker is regulated by seven major regulatory authorities, including the ASIC, CFTC, IIROC, FCA, PFSA, MAS in Singapore, FSA in Japan, FSC in BVI. These regulations ensure strict compliance with industry standards and protect client funds.

What is the Maximum Leverage for ASIC in Oanda?

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

Here are the Oanda 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 Oanda?

Oanda does not impose a minimum deposit requirement. However, to meet margin requirements, Oanda recommends having at least $200 in your trading account.

Does Oanda Offer Negative Balance Protection?

Yes, Oanda 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.