ASIC - the Australian Securities and Investment Commission - is the country’s chief financial regulator. As such it is positioned to oversee the foreign exchange market and all money transfer providers. For customers seeking to use a money transfer provider based in Australia, it’s vital they look for one that is ASIC regulated.

Operating under the ASIC Act of 1989, it is responsible for all sorts of financial transactions as well as consumer protection around this area. Since the 2001 Financial Services Reform Act (FSRA) the body now has complete oversight of the money transfer market in Australia. Legitimate brokers providing money transfer services must be registered with this body and be licensed through it. They must possess an Australian Financial Services License, or AFS.

Protection for Consumers

Being licensed by ASIC entails a number of requirements on firms and ensures that customers are protected. Customer funds need to be kept in segregated accounts to keep them safe from external factors, such as if the firm encounters financial difficulties.

To obtain a licence, brokers must be trained and qualified to the necessary level. Authorised representatives of the firm should be trained and monitored appropriately and the company must show it complies with risk management criteria and responsibilities.

It must also offer adequate responses to dispute resolution, should there be any problem with a transaction there is a suitable avenue for the consumer to use to seek redress. Brokers must also offer compensation and insurance to protect customers. Regulation by ASIC also means that money transfer providers have an obligation to do all things they can to ensure that they provide financial services efficiently, honestly and fairly. It must also offer adequate responses to dispute resolution, so should there be any problem.

ASIC regulation is an essential thing to look for in money transfer providers as it ensures they will comply with all relevant Australian legislation covering fraud and money laundering, while also protecting consumers appropriately. All Australian-registered money transfer providers/partners on FXcompared are regulated by the ASIC.