New ASIC Regulations and How They Affect Forex Traders

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#400: New ASIC Regulations and How They Affect Forex Traders

In this video:
00:24 – I’m joined by Ben Clay from Blueberry Markets
00:43 – Why are ASIC making these changes?
01:43 – If you have more experience, will these levels change?
03:12 – How does this affect Australian traders?
04:00 – How will these changes affect non-Australian traders?
05:35 – I’m looking for a new broker. Can I join Blueberry?
06:11 – What should you look for in a good Forex broker?
07:36 – Can a trader contact you directly?
09:21 – A goal to help people succeed

Andrew Mitchem:
There are new changes coming from the Australian regulators affecting us as Forex traders. So let’s discuss how that’s going to change things with the Australian brokers. Let’s get into it right now.

Andrew Mitchem:
Hi traders, Andrew Mitchem here at the Forex Trading Coach with video and podcast number 400.

I’m joined by Ben Clay from Blueberry Markets

Andrew Mitchem:
And today we’re joined by Ben Clay from Blueberry Markets to discuss the upcoming changes through ASIC and how it’s going to affect us as traders, whether we be in Australia or overseas. So Ben, welcome, great to have you here today.

Ben Clay:
Thank you, Andrew. Thanks very much.

Why are ASIC making these changes?

Andrew Mitchem:
So Ben, we’re here about these changes out of ASIC, so it’s the Australian Securities and Investment Commission. So can you tell us how is this likely to affect us? And first of all, why are ASIC making these changes? What is it that they’re doing and why are they doing it?

Ben Clay:
Sure. So essentially the changes are mainly to protect traders at the end of the day, especially new traders coming on board. There’s a lot of new traders that come into brokers on one to 500 leverage, the maximum leverage that can be offered and that’s just too much risk for someone who doesn’t know anything about the Forex markets to be trading on. So these changes is to try and help new traders get a better understanding and trade on much lower leverage, which will be one to 30 for Forex pairs. So they can get an understanding of how the products works before jumping into higher leverage.

Andrew Mitchem:
Okay. So it’s mainly about leverage and protecting some of those newer traders.

Ben Clay:
Absolutely.

If you have more experience, will these levels change?

Andrew Mitchem:
That’s one of the reasons. So does that mean that once someone understands risk and they’ve been through trading for a while, things can change, or is that leverage that you just mentioned pretty much set?

Ben Clay:
No, that’s exactly right. So when a client has a bit of experience and has some trading history, they can actually become what’s called a sophisticated trader. So there’ll be some extra parameters that they have to go through, which we’ll send out to our clients in the next month, but it will basically almost be a test to show that they understand the markets and that they clearly understand the risks of when it comes to Forex trading. Like myself, I trade on high leverage. It’s just a way that I prefer to trade. So, me, myself, I would want to be listed as a sophisticated investor so I can have that as an option to trade on much higher leverage.

Andrew Mitchem:
Right. So it’s about educating the client as well. So they’re not just going in there gambling and throwing it all away, and then all goes wrong.

Ben Clay:
Exactly. That’s exactly right. And at Blueberry, that’s something that we’re really passionate about is making sure that our clients understand the risks, and people like yourself as well, who are out there educating clients so they’re not coming in and blowing up an account right off the bat on massive leverage.

Andrew Mitchem:
Yeah. So you’re teaching them about low risk and how to trade carefully and properly rather than the people that think they’re going to double their account every week.

Ben Clay:
Exactly right and that’s what it’s all about at the end of the day. So it’s a positive change that ASIC is making. And I think it’s been a long time coming and I think it’s going to be beneficial for the industry as a whole.

How does this affect Australian traders?

Andrew Mitchem:
Yeah. Nice. So let’s talk about Australian clients. You are in Australia and I’m guessing a good number of your clients are too. So how does this affect them directly?

Ben Clay:
So as of the 29th of March, if they’re not listed as a sophisticated investor for Forex pairs, they won’t be able to have leverage higher than one to 30. And I believe for minor pairs, it’s one to 20. For CFDs, it’s one to 10. So basically needing to have a higher margin and therefore less risk for each individual trade they place. They’re not able to have massive notional value contracts without laying a small amounts and therefore the profit loss fluctuations are so much higher, they would have to trade much smaller to start off and get comfortable with it right off the bat.

How will these changes affect non-Australian traders?

Andrew Mitchem:
Okay. And so that’s for Australian. So I’m in New Zealand. Most of our clients are other places around the world. So they want to trade through Blueberry Markets. How will these changes affect those people?

Ben Clay:
So for our existing clients that are here with Blueberry, they will be moved to an offshore licence on Vanuatu, which is the Vanuatu Financial Services Commission. So essentially there’s no changes for our overseas clients. They still have the same login number, same client portal details, funds are still held here in Australia they will have the same account manager. So it technically doesn’t impact those clients who are already experienced in trading. They can still have leverage up to one to 500.

Andrew Mitchem:
Okay. So for most Blueberry clients then going forward, existing clients, there’s not a lot of change for most people?

Ben Clay:
No. The only real difference would be if complaints that cannot be resolved internally at Blueberry Markets goes further, then they would go to the Vanuatu Financial Services Commission instead of going to ASIC. But the big thing to note here is that we have a very good online reputation and we focus on making sure that our clients are happy and 99.9% of our complaints are resolved in house. That’s something that we will continue to do, and we’ll continue to focus on building our reputation and making sure that our clients know that they can come to us and gets the best service possible and be taken care of and still have that trust with us as well. So this is even more important now, the way that our overseas clients are moving to an offshore licence. This is something that we take very, very seriously and we’ll continue to do so forever.

I’m looking for a new broker. Can I join Blueberry?

Andrew Mitchem:
Yeah, good. And so for someone who’s not currently a client of Blueberry Markets right now, and they’re looking at, thinking, “Well, I’m looking for broker,” and let’s say they’re outside of Australia. Can they come to you and join? Because I think there’s a bit of a perception that that’s not going to be possible.

Ben Clay:
Yeah, absolutely, right. So they can definitely still come to us to join. As I said, everything basically remains the same. They would just be onboarded onto a different licence, but everything will remain almost identical to them. So new clients can definitely still come and sign up. They just have to go through the normal application process, upload ID documents, and it’ll be approved within 24 hours.

What should you look for in a good Forex broker?

Andrew Mitchem:
Okay, excellent. So someone’s out there looking for a new broker. What should they be looking for? Not just with yourself, but with any broker going forward now or any ASIC broker, what is it that they should be looking for?

Ben Clay:
That’s a really good question. And I think this has changed a lot over the last 10 years or so. When I first started in the industry, every broker was just competing on spreads. Whoever had the tightest spread was the broker you would go with. And then it came down to regulation. But a lot of these tier two and tier three countries have now got really good regulation, like Vanuatu. So most brokers are regulated, obviously stay away from the ones that have zero regulation. But it all comes down to reputation. As we’re in this modern world of online reviews, you can go look and find anything you want to know about any broker you’re looking at, whether it’s us or someone else, just make sure that there’s plenty of good reviews and that you have a good read of them, that they’re not fake.

Ben Clay:
There’s going to be some negative reviews here and there. But the really important thing to do is do your research on the broker that you’re going through. And you can even get more granular with that and look at who’s behind the broker. Go look at the LinkedIn profiles of the directors and find out as much information as possible about the broker that you’re looking for before signing up. In my opinion, it’s reckless not to do your research and really ask as many questions as you can to your broker when signing up.

Can a trader contact you directly?

Andrew Mitchem:
Yeah, definitely. And what if somebody wanted to come to you directly and just ask some questions? Is that something they could do? Could they call you, can they email you?

Ben Clay:
Of course, absolutely. So we have live chat 24/7, so that’s on the weekends as well. People can come to our live chat. You can email me directly if need be. I’m the partners manager here at Blueberry Markets, but I’m always happy to help with whatever you can. My email is just [email protected], or you can reach out to [email protected] and we’ll get back to you very quickly.

Andrew Mitchem:
Awesome, Ben. Well, look, I think from my point of view, being outside of Australia, especially I think it’s a big relief to hear what you’ve said, because initially it was a little bit of a, “Wow, we’re going to not be able to trade through Blueberry any longer.” So it’s good that we were able to have this conversation and continue offering good education from our side and good quality service and brokerage from your side. So I’m very pleased that that’s going to continue, but with even more licencing and quality behind the scenes from ASIC as well, which is good.

Ben Clay:
Yeah, absolutely. We’ll still be regulated by ASIC, of course. So I really appreciate that Andrew. This is, as I said, this is very important to us and it’s even more so important now to keep up our reputation and just to keep our clients happy and satisfied. That’s the most important thing at the end of the day for us.

Andrew Mitchem:
Excellent. Well, thank you very much, Ben. I think that’s been very valuable information. It has been good clarity as well, because we’ve had a huge amount of questions. I’m sure you have too.

Ben Clay:
I’ve had a lot of phone calls. Yes.

Andrew Mitchem:
I bet you have. Yes. So it’s really good just to help people and give people sort of options and from the horse’s mouth as it were, what’s really happening, which is good. So thank you very much for doing that.

A goal to help people succeed

Ben Clay:
Thanks very much, Andrew. No, that’s okay. I have to say, I thank people like yourself who are out there educating people on how to trade and really have a goal to help people instead of just looking for an extra dollar and it really shows and a lot of your clients speak those high volumes of you as well. So I appreciate what you’re doing too, Andrew.

Andrew Mitchem:
That’s good. I think we both on the same page and we both have that interest, that passion to help people who want to do well for themselves as well. So that’s really good.

Ben Clay:
Absolutely.

Andrew Mitchem:

Which is why we partner and why it works. So thank you, Ben.

Ben Clay:
No worries, mate.

Episode Title: #400: New ASIC Regulations and How They Affect Forex Traders


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