Forex Licensing - Australia

About Australia

In Australia, forex licencing is overseen by the Australian Securities and Investments Commission (ASIC). Anyone wishing to operate a forex brokerage in Australia must first obtain an ASIC Australian Financial Services (AFS) licence. To obtain an AFS licence, a forex brokerage must meet a variety of requirements, including financial requirements, risk management standards, and compliance with anti-money laundering and counter-terrorism funding rules. After obtaining an AFS licence, a forex brokerage must comply with continuous regulatory duties such as frequent reporting, audits, and compliance with current regulatory changes.

Australia is the world’s smallest continent and one of its largest countries. It is situated between the Pacific and Indian oceans in the Southern Hemisphere. Canberra, Australia’s capital, is located in the southeast, between Sydney and Melbourne, which are far larger and more important economic and cultural centres.

Australia’s current population is 26,332,928 as of Saturday, April 29, 2023, according to Worldometer’s elaboration of the most available United Nations data.

The majority of Australians speak English as a first or second language, although a significant proportion also speak other languages. According to the 2021 Census, approximately 76% of Australians reported only speaking English at home.

Australia follows the Commonwealth law code. According to the Financial Services Reform Act 2001 (FSR Act), which went into effect on March 11, 2002, the Australian Securities and Investments Commission (ASIC) is responsible for licencing all financial service providers (including foreign exchange dealers) when required by the Corporations Act 2001.

The forex licensing framework in Australia is deemed mature and well-established as of 2023. Australia has one of the most advanced financial services regulatory regimes in the world, and this includes the regulation of forex brokers and other financial service providers.

The Australian Securities and Investments Commission (ASIC) is the primary regulator in charge of overseeing the forex market in Australia. Forex brokers in Australia are subject to a number of regulatory restrictions, such as minimum capital requirements, consumer money protection, and risk management procedures.

In recent years, ASIC has implemented a number of efforts to strengthen Australia’s regulatory framework for forex brokers. ASIC, for example, has adopted new regulations requiring forex brokers to provide greater transparency about their pricing and execution processes, as well as extended disclosure requirements about the risks of forex trading.

Forex firms are regarded financial service providers in Australia and must be regulated to determine what services they can provide.

Section 3 of Part 7 of the Corporations Act defines and lists the financial services that may be provided under Section 4 of Part 4 of the said statute.

When a corporation provides financial services to private consumers, it must be prepared to fulfil all requirements to protect such clients’ interests, which the Commission considers when deciding whether to grant a license.

Obtaining a Forex licence in Australia offers several benefits:

1. Credibility and trustworthiness

Australia is known for its well-regulated and stable financial climate. Your company can benefit from this reputation by obtaining an Australian Forex Licence, which can contribute in the establishment of trust and credibility with new clients and partners.

2. Gaining Access to a Large Market

Australia has a large and sophisticated financial sector that offers numerous chances for forex brokers and other financial service providers. Obtaining a Forex licence in Australia helps your organisation to have access to this industry and capitalise on development and expansion opportunities.

3. Better Regulatory Compliance

By obtaining an Australian Forex license, your company will be expected to meet a number of regulatory regulations, including minimum capital requirements, client money protection, and risk management measures. This can aid your company’s overall compliance, minimising the risk of regulatory issues and reputational damage.

4. Enhanced Customer Protection

The Australian forex regulation system is meant to protect clients while also fostering fair and transparent trading practises. Obtaining an Australian Forex Licence allows your organisation to demonstrate its commitment to consumer safety, which can help you attract and retain customers.

5. International Market Access

Australia has a number of agreements and procedures in place with other foreign financial markets that can aid in cross-border trade and investment. By obtaining an Australian forex licence, your company can benefit from these arrangements and expand into new global markets.

License: Australia Financial Services License
Timeframe for Approval: 6 to 12 months
Regulator: Australia Securities & Investment Commission (ASIC)
Authorised Activities: Forex, Agriculture, Mining, Manufacturing, Construction, Financial Services, Education, Health Services, Tourism, and Transport
Corporate Structure: Proprietary Limited or Limited Incorporated Company
Corporate Tax Rate: 27.50%
Currency: Australian Dollar
Capital Requirement: At least $1 million (AUD)
Paid-up Capital: As little as A$1.00
Economic Support: Age Pension,
Care Allowance,
Care Payment,
Commonwealth Seniors Health Card,
Disability Support Pension,
Double Orphan Pension,
Family Tax Benefit,
Pensioner Concession Card.
Local Director: At least two Australian resident directors throughout the license period.
Local Shareholder: No specific requirements for local shareholders
Local Registered Officer: Required
Local Staff: Required
Compliance Officer: Required
AML/KYC: Required
Audit: Required
Main Benefits: Market is open 24 hours a day
Free training to become a successful forex trader
All trading strategies are effective
Trading costs are cheap because there are no commissions
Various risk management tools
Profit by going 'long' or 'short'
Market that is extremely liquid
Begin with as little as $200
Begin with tiny trade sizes
Make use of technical analysis
Forex trading platforms are available for free
A demo account allows you to practise without danger
The forex market is unrelated to the stock market
Trade forex from any location in the world
There are less overnight gaps than in the stock market
There are no centralised exchanges

Obtaining a Forex license in Australia entails numerous stages that can take several months. Here’s a high-level overview of the procedure:

1. Determine the license type necessary.

The first step is to decide the sort of license that will be necessary based on the scope of services that will be provided and who they will be provided to. An AFS Licence and an Australian Market Licence are the two types of licenses offered by ASIC.

2. Comply with the qualifying requirements

To receive an AFS license, the applicant must meet specific eligibility criteria, such as being a fit and proper person, have the appropriate qualifications and experience, having appropriate resources, and having completed the required training.

3. Submit your application

The next step is to apply for an AFS license with ASIC. The application must include all essential information, such as details about the firm, prospective services, type of clients and the applicant's financial situation etc.

4. Payment of the application fee

The AFS license application price varies depending on the kind of license and the services supplied. The application cost must be paid at the time of submission.

5. Wait for the evaluation

ASIC will review the application and, if necessary, request additional information or clarification. The evaluation process might last many months, and the candidate may be required to respond to several sets of questions.

6. Obtain approval

AFS licenses will be issued if ASIC is satisfied that the applicant meets all of the eligibility conditions. The licence will be subject to continuous compliance requirements, such as regular reporting and auditing. It is crucial to understand that obtaining an AFSL licence in Australia can be a complicated and time-consuming process. It is strongly advised that candidates obtain professional advice to ensure that they meet all the qualifying criteria and have all the necessary information and resources to support their application.

An AFS licence in Australia may include a variety of additional financial activities in addition to FX trading. Other services or inclusions that may be covered by an AFS licence in Australia include the following:

1. Trading in derivatives

This covers trading in various derivatives products such as futures, options, and swaps.

2. Management of investments

Investment management services such as portfolio management, investment advising, and administration may be permitted under an AFS licence.

3. Deposit and payment services

An AFS licence may also permit the sale of deposit and payment goods such as debit cards and electronic payment services.

4. Insurance coverage

An AFS licence may allow you to sell insurance products such as general insurance and life insurance.

5. Securities trading

An AFS licence may permit the trading of securities such as stocks, bonds, and managed investment schemes.

Documents required by all involved individuals:

  • Passport copy (Notarised)
  • Utility Bill issued within the last 3 months (Notarised)
  • CV or Resume for each involved individual
  • Two professional reference letters
  • Qualifications (Notarised)

For Corporate Shareholders:

  • Articles of Association in English
  • Registered office address documents (Notarised)
  • Company Register of director/s
  • Company Register of UBOs (shareholder register, or incumbency certificate, or share certificates)

Provide us with the following documents:

  • Notarized copy of valid passport (each of Director or Shareholder)
  • Notarized copy of proof of address (ex. Utility bill of each Director)
  • 2 Character reference Letter issued by professionals (of each Director and Shareholder)
  • Bank reference (of each Director)
  • Detailed CV dated and signed by applicant (of each Director and Shareholder)
  • Certified Diplomas of Higher Education
  • Notarized criminal record
  • Detailed business plan
  • Manuals: procedure manual, privacy policy, disaster recovery plan, complaints handing policy, Anti Money Laundering policy, security policy and procedures

In case the shareholder is a company, it is required to provide:

  • Certified true copy certificate of registration
  • List of shareholders
  • Copy of the last annual/financial return
  • Apostilled Certificate of Good Standing

Package includes:

  • Obtaining – $25,000
  • Monthly – $7,500 (upfront 3 months)
  • Application period – 2-3 weeks
  • Requirements – Local legal address, local director (Included in the price)
  • Submit documents – Passport; Proof of Residence, Bank reference letter
  • Deposit – Not required
  • Annual renewal fee – Rebate to agent

1. Establish international business corporation.
2. Preparation and drafting of shareholder and officer agreements.
3. Preparation and drafting of narrative business plan.
4. Preparation and drafting of current financial statements.
5. Preparation and drafting of 3 years financial projections.
6. Preparation and drafting of personal financial statements for owners.

7. Preparation and submission of application with appropriate regulatory authority
8. Preparation and drafting of responses to regulatory authority
9. Identification and engagement of auditor and forex prime broker.
10. Facilitate opening of bank accounts and payment processors.
11. Preparation and drafting of AML/KYC policies and procedures.
12. Preparation and drafting of client agreements and disclosures.