Trading Binary Options for Money in New Zealand
New Zealand is considered Australia’s “little brother” when it comes to the financial markets. Most of what is seen in New Zealand’s markets mirror what is obtainable in Australia. The same can be said of the binary options market in New Zealand, where traders are allowed to participate with minimal regulation by the regulatory agency.
New Zealand’s financial markets are regulated by the New Financial Market Authority (FMA). Binary options were not always regulated by the FMA. Indeed, it was only until very recently that it was possible for offshore brokers to market their products to New Zealanders without inhibition. In April 2017, the rules changed. All financial services companies in New Zealand which offer short term contracts with a 3-day expiration are required to have a Financial Services Providers (FSP) license. Since most binary options usually settle way before the 3-day cut off deadline, brokers in New Zealand have been caught up by this rule.
With regards to licensing, all financial services companies offering contracts that expire in 3 days or less are required to be licensed as “derivatives issuers”.
This is in accordance with the Financial Markets Conduct Act of 2014, which issued 6 new categories of licensing for financial market operators. Unlicensed companies wishing to work as brokers in New Zealand are required to apply for a license and perform their registration into the Financial Services Providers Register by August 1, 2017. It is expected that by December 1, 2017, full compliance with regulatory guidelines would have commenced.
As it stands, the trading of binary options in New Zealand is legit and allowed by law. Just like ASIC, the FMA has dedicated a section of its website to education of traders about binary options. This guide describes what traders can expect, the structure of the market as well as warning signs to look out for when approached by unregulated and unlicensed brokers.
Recommended Binary Brokers in New Zealand
Currency Pairs & Spread
A mixture of platforms used by several brokers means that various types of binary options are traded in New Zealand. All asset categories are traded. Spreads are not usually offered or displayed, but are built into the trading costs incurred by New Zealand traders.
Trading Platforms
The platforms used by brokers in New Zealand are a mixture of proprietary platforms, turnkey and MT4-based platforms.
Bonuses
No official statement has been issued by the FMA with regards to the issuance of bonuses by New Zealand brokers. However, issuance of bonuses to traders is not a general market practice here. Traders should therefore not expect to receive bonuses when they open binary options accounts in New Zealand.
Deposit and Withdrawal Options
What deposits and withdrawal are available to binary options traders in New Zealand?
- Cards: Cards issued by MasterCard and VISA are accepted on the platforms of the top brokers in New Zealand.
- International and domestic bank transfers represent another method of depositing and withdrawing funds from trading accounts of binary traders in New Zealand. Funds are usually sent to segregated bank accounts. The advantage is that it allows transactions to be carried out in multiple currencies.
- Digital wallets used in New Zealand are usually denominated in New Zealand Dollars (NZD). Available wallets include Skrill, Neteller, WebMoney and ANZ goMoney.
Legality & Regulations
What are the legal considerations attached to the conduct of the brokerage and trading of binaries options in the New Zealand? Binary options brokers in New Zealand are now required by law to have a derivatives issuers license by the December 1, 2017 deadline. Furthermore, the FMA requires all brokers in New Zealand to conduct self-assessment of their compliance levels and report same to the FMA. The FMA would then carry out its own assessment and direct brokers to make changes or initiate action plans where necessary. Brokers are also mandated to report instances of where staff have been sanctioned for market breaches, with a full explanation of the circumstances surrounding these sanctions.
It is clear that for unlicensed offshore brokers trying to make money off New Zealand traders without rendering corresponding service, the party is now over.
FAQ
What are the most frequently asked questions about New Zealand binary options brokers and the market in general?
- Are binary options legal in the New Zealand?
Answer: The trading of binaries is legal in New Zealand, and there are now laws to guide the conduct of the brokers in New Zealand.
- Is it safe to trade binary options in New Zealand?
Answer: Thanks to the new regulatory protocols put in place in April 2017, New Zealand can now be considered as a safe place to trade binary options.
- As a citizen/resident of New Zealand, am I allowed to trade binary options with offshore brokers?
Answer: Offshore brokers are now prohibited from offering their products to New Zealand citizens without an FMA derivatives issuers’ license. You would be breaking the law if you trade with offshore brokers from New Zealand.
- How do I check the status of a binary options broker?
The top brokers in New Zealand are required to input their details in the Financial Services Providers Register. This is now a requirement for obtaining a derivatives issuers license in New Zealand. To check the status of a New Zealand binary options broker, visit this list of licensed derivatives issuers, which is published on the website of the Financial Markets Authority (FMA).
- What organization regulates New Zealand binary options brokers?
Answer: The regulatory body for brokers in New Zealand is the Financial Markets Authority (FMA). It was setup in 2011 to replace the old Securities Commission, and given extended powers under the Financial Markets Conduct Act of 2014.
- What is the FMA’s official designation of binary options brokers in New Zealand?
Answer: Binary brokers in New Zealand are deemed to be derivative trading investment firms. Therefore, the FMA’s official designation for them is “derivatives issuer”.
Best Binary Options Brokers in New Zealand
There are a few brokers with a physical presence in the country, and many others who have all chosen to look in from outside the country. No doubt, some offshore binary brokers may be waiting to see how the new regulatory protocols shape up as from December 2017 before setting up shop in New Zealand. The top brokers are as follows:
Conclusion
The response of the FMA in adopting a new regulatory structure for the financial markets in New Zealand is set to change the face of binary options in that country forever. Traders can now trade safely and in renewed confidence.
New Zealand is a small country and has a very huge potential in terms of expansion of the binary market, as the number of New Zealand binary options is presently very low when compared to other island countries such as Cyprus. It is expected that other brokers would come into the market as the regulatory picture becomes much clearer in December 2017.