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Best New Zealand Forex Brokers 2018
There are plenty of examples around the world of regulated financial markets - and some of these are regulated to the point of actually hindering investors. New Zealand on the other hand are relatively free from regulation, allowing NZ traders to profit from the most traded market in the world in relative peace. That’s not to say it’s a free for all with all sorts of rogue traders setting up camp; there are plenty of protections in place for investors.
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Forex Regulation in New Zealand
New Zealand has three separate authorities that oversee the financial markets; these are the FSP, FSCL and the FMA. Their roles vary from offering complaints services, to promoting fair and transparent financial markets. That being said, none of these bodies actually regulates forex brokers in New Zealand - in fact, there is no official regulation so to speak. Not in the sense that in the UK there’s the FCA - who actively regulate and oversee the market.
The only requirement for NZ forex brokers is to register their brokerage services, letting investors see how reputable the firm are. This may raise alarm bells but there’s actually several advantages to take away.
Higher Leverage: America and Asia often restrict the amount of leverage available to traders, sometimes to as low as 50:1. This makes it hard to profit from leverage - but New Zealand doesn’t have these restrictions. Traders can take advantage of leverage as high as 500:1. Remember: leverage should always be used with caution as losses can exceed your deposits.
Trading Freedom: In countries like India, forex is heavily regulated and it is against the law to trade the currency of the country without explicit permission. This is also restricts Indian traders from signing up with overseas brokers. With the light framework of NZ forex, it’s relatively simple to sign up to an international broker and start speculating on the forex markets.
As you can see, there are many perks to the lack of official New Zealand forex regulation. And that means investors are relatively free to explore exciting options. However, we would always recommend keeping these points in mind when looking for your next New Zealand forex broker:
Stay Regulated: While regulation isn’t such a worry to NZ traders, it’s still worth seeking regulated brokers. These are firms that have been given the all green by their respective governing bodies. You can also be sure that these firms have the necessary capital to offer their brokerage services. As we saw with the Swiss Franc in 2015, it’s important to have some backup in the event of extreme market events.
Choose your tools carefully: The forex markets are a mysterious mistress and at times it can be teeth grindingly frustrating to trade in them. But there are tools and platforms that can help you seek out those elusive trading opportunities. Advanced charts, client sentiment data, market news; all of these things can help you find an opportunity to make profit.