Best broker for Australians

Best broker for Australians is a non-Australian broker as Aussie forex brokers do not have the protection of a guarantee fund. If an Australian broker goes bust then all your funds are gone and you will look stupid. Hence go with FCA regulated brokers. Unless of course you are suicidal.

See previous post. You are just fear mongering. Vantage's segregated accounts protect clients from this.

Nobody is fear mongering here. Ask ASIC if client funds held in segregated accounts are guaranteed by a national guarantee fund. They will reply to you that they are not. Nobody is saying here that any of the existing Aussie brokers will go bankrupt. I am just saying that if this happens then you are become just one of the creditors and nothing more. So in plain English all you get from a broker is a postcard with a thank you note. If you go with FCA regulated broker then you will get your money back in any case up to 50k.

Actually you are, you're in a thread for the best broker for Australians, spreading fear about every broker in the country. You don't seem to understand what a segregated account means - this money can not be used by the company for ANY PURPOSE. It remains the property of client - clients are not unsecured creditors. You seem to be getting confused with the joke that is EU banking and regulation (which UK is still a part of BTW). Regardless, non UK residents are not eligible for your much lauded deposit guarantee. Alpari UK went bankrupt during the CHF debacle, no Australian broker did. Alpari clients took a haircut and are probably still dealing with FCA (if they're even eligible). Vantage clients still laughing

Look Badem,
If you think just because Australian brokers have segregated accounts you will be safe, you are 100% mistaken. There have already been Aussie brokers that have gone bust and clients lost about half. Have you heard of fraud etc. And the Swiss debacle wasn't so bad for Aussie brokers as not many clients had big volumes on swiss. A black swan can wipe out any broker including aussie. That said I use Aussie brokers as they seem to have the best conditions. Recently changed from IC Markets because I was sick of freezing platforms and bad execution. Am with FXCM Australia and I am quietly impressed so far.

Hi Pharlap,
I think you just said 'Swiss debacle', 'black swan' and 'I trade with FXCM' in one paragraph.

Aussie brokers survived because they were aware of the risks and were warning clients via email and reducing leverage for months prior - not because of some mystical phenomenal tendency for Australians to not trade the CHF. FXCM failed to manage risk and were very close to going bust had they not been bailed out by a private equity firm.

Badem, with respect, if you read the details of the Product Disclosure Statements (PDS) and the Client Agreements carefully, you will see that "segregated accounts" often doesn't mean what you think it means. Client funds are typically deposited into a segregated account, but to use those funds for trading typically requires that the broker takes those funds out of the segregated account. That is the way they recover their money if you lose a lot of money in a trade. They take from you more than just the margin deposit. Otherwise, they would not be able to recover from you more than the amount required for the margin deposit.

Forex broker websites love to say that they use segregated accounts, and give the impression that it provides a lot of protection. The fine print in the contracts and PDS often tells a different story.

Obviously not all brokers are identical in this regard. However, the only way to really know what you have at risk is to read the risks they disclose in their legal documentation. One of the great things about Australian brokers is that they are required by law to provide a PDS.

i use pepperstone. so good so far. fwiw i think it is naive to think that any retail forex provider is bullet proof. and you would never hold your full trading capital in your trading account, that just seems like common sense.

I know it is ironic isn't it! If my account gets too big I would definitely split money with different brokers. Like jnetfx says you are naïve to trust any broker too much. A segregated account doesn't mean too much ie like you said look at FXCM during SNB.

Hi guys, couldn't agree more - no broker is perfect and keeping all eggs in one basket is dangerous. I'm really happy with Vantage though - and they handled swissy debacle really well, cleared neg bal's for people ...FXCM AU was harassing Australian clients despite advertising neg bal protection. Their justification for this was that the losers were high net worth individuals with lots of trading experience. That's pretty dodgy - You either protect against negative balances or you don't.

"If I were to pay for the negative balance, it would mean the potential loss of my home, possible break up of my family," said one FXCM client, a foreign currency trader who has asked for legal reasons that his identity not be revealed."

Poor guy, I know moral hazard, took the risk etc but the broker advertised it could never happen.

I find it kind of humorous that US companies caused the GFC ... so Obama passed a law saying US retail could only trade with US firms lol

For those that look at Aussie Brokers and the debate around segregated account, that means absolutely nothing.

Read the PDS carefully and dont be confused by 'Segregated accounts'. See the differences in each of the broker below:

Vantage FX (PDS) - page 15
Clients' Money
Your funds are held in our client trust account and are comingled with the funds of all of our other clients. Subject to the Corporations Act,
your funds kept in our client trust account can be used for the purposes of covering payments for other clients and meeting our Margin
requirements with our OTC Derivatives Providers. This means that you may potentially suffer losses as a result of default by another client
where money from the client trust accounts is applied to cover that clients payment obligations. Moreover, you may not receive all the
money held by us on your behalf in the client trust account if there is a deficit in the client trust account and we become insolvent or are
otherwise unable to pay the deficiency.

Pepperstone (PDS)
14.6 Benchmark 5 - Client Money
To trade a financial product offered by Pepperstone a client must deposit funds with Pepperstone.
Pepperstone operates the use of these funds as set-out in s981A-981H of the Corporations Act (Client
Money Rules).
These rules dictate the way in which Pepperstone must deal with client money. Pepperstone holds client
funds in segregated bank accounts with The National Australia Bank. These accounts hold Client Money
separately from money belonging to the business. Pepperstone does not use Client Money for any
business purpose. Client Money is solely used to maintain margin that is needed to cover positions
opened by clients.
One of the risks of holding Client Funds in segregated accounts is that market movements may cause a
clients account may go into negative equity and Pepperstone may be unable to redeem these funds,
thus creating a deficit in the other clients money. To reduce this risk Pepperstone runs an Automated
Margin Stop Out System designed to prevent any client from falling into a negative balance. Additionally
Pepperstone brings these negative balances onto our own balance sheet as a cost of business.

Oanda - PDS
You should be aware that, generally, for trust accounts such as the OANDA client moneys trust account:

1. Individual Clients do not have separate or segregated accounts.
2. All Clients moneys are combined into one account.
3. Moneys and other assets in the trust account which belong to non-defaulting Clients are potentially at risk of being withdrawn and not being re-paid to the Client even though they did not cause the default. This is because a licensee is permitted by law to use the moneys to pay itself for its hedge of the Clients position (i.e., the contract). However OANDA does not use client moneys paid into the OANDA client moneys trust account for hedging with its Hedge Counterparty. Rather, OANDA uses funds from its own operating account for this purpose.
4. A licensee (e.g., OANDA) is permitted by law to use Client moneys in these trust accounts to meet obligations incurred by a licensee (i.e., OANDA) in connection with margining, guaranteeing, securing, transferring, adjusting or settling dealings in derivatives.
5. OANDA does not use client moneys paid into the OANDA client moneys trust account for margining, guaranteeing, securing, transferring, adjusting or settling dealings in derivatives. Rather, OANDA uses funds from its own operating account for this purpos

​
Global Prime - Account Agreement
Client money
Cash paid by Client to or as directed by Global Prime as Margin is not client moneys.C ash held as Collateral (as distinct from cash paid as Margin entirely
for the benefit of Global Prime) will have the protections conferred by any client money rules when required by the Corporations Act or the
Rules. In all other cases, cash is not held as collateral and is not subject to the protections conferred by any client money rules and, as a
consequence, will not be segregated from Global Primes own money and will be used by Global Prime in the course of its business. Cash so
paid will be owed by Global Prime on a debtor/creditor basis and not held by Global Prime as custodian upon trust for Client. Client will rank as one of Global Primes general unsecured creditors if Global Prime becomes Insolvent.

Client Funds Management Structure
Traditionally, client funds of this kind have been pooled in a central holding account and clients have been unable to claim a
priority to monies owing out of that pool ifa Trigger Event occurs. In response to this, Global Prime has developed a separate
trust structure (Security Trust). This structure involves a legally separate trust account for client funds, which is held with the
Westpac Banking Corporation. If a Trigger Event occurs, all funds in the Security Trust account will be held for the benefit of
clients as beneficiaries, who will have priority over those funds.
A Trigger Event includes: (i) an Insolvency Event occurring with respect to Trustee or Hedge Counterparty; or (ii) a breach of the
agreement under the Security Trust that materially adversely affects the interests of Clients as a class of beneficiaries.
Global Prime has exhausted considerable resources to ensure the security of client funds and transparency in the way client
funds are managed. We are proud to be able to offer this structure, which we believe is in the best interest of our clients.


FP Markets - PDS
12. Client Moneys
12.1 FP Markets must deal with any money and property which you pay or give to, or which is otherwise received by FP Markets in connection
with financial services provided by FP Markets, in accordance with the Applicable Laws. For example, FP Markets may be required to
pay such moneys in a clients segregated account or into a Client Moneys Trust Account which complies with the requirements of
the Corporations Act. You acknowledge and authorise that:
(a) your moneys and the moneys of other clients of FP Markets may be combined and held by FP Markets in a Client Moneys Trust Account or clients
segregated account, separate from the moneys of FP Markets;
(b) all moneys credited to the Client Moneys Trust Account or clients segregated account maintained by FP Markets may be used by FP Markets to meet the default of any client of FP Markets to the extent permitted by the Corporations Act (subject to Applicable Laws and Rules);
(c) moneys credited to a Client Moneys Trust Account or clients segregated account maintained by FP Markets under the Corporations Act may be used by
FP Markets for purposes unrelated to your Account to the extent permitted by the Corporations Act and accordingly such use of a Client Moneys Trust Account
or clients segregated account does not fully protect your money and property from risk of loss.

You can use Interactive Brokers as an Aussie without issue. It is the best choice and allows for the most growth going forward as you continue to develop as a trader. Unsurpassed global market access at a good price.

With kind regards,
MK

I thought Australians were unable to use Interactive Brokers for leveraged forex transactions anymore? Correct me if I am wrong as I think they would be excellent to use.

If you're looking for Australian brokers stay away from AC Global and ToOptions, ASIC recently issued a warning against them that they're working without a license and are likely a scam. Always work with licensed, easy to research companies.

Hi Midknight, can you explain what Interactive Brokers are please ? Pardon my ignorance and any recommendations for Aussie broker. Cheers !!!

If im from Europe can I too use Australian brokers?

Of course you can, if you're not from Belgium

The Belgium legislation is funny - I know Vantage and other Aussie ECNs are still accepting clients from Belgium. It only outlaws OTC forex ie market makers.

Yeah I thought they didn't even do retail anymore?

Good day traders; anyone here from Canada and has any experience with fp markets - any sincere and truthful and feedback's would be appreciated, thanks

Not anymore.

In April the Australian parliament passed new legislation according to which companies providing services to clients outside of Australia could be breaking the law. Since then Australian brokers have been refunding non-Australian clients.