New Zealand is a popular investment destination for FX and binary options brokers. The country has a great economy, aided by an investment-friendly population that is keen on trying out new products in the market. Of course, New Zealand also benefits from its neighbouring Australian financial market, which is witnessing an ever-increasing rise in popularity in the global investment market.
New Zealand is not new to binary options trading, but several scams and unpleasant trading experiences have forced the country to act in favour of its citizens. New Zealand has brought about several changes to its regulatory framework, which, although not restrictive towards binary options trading and investing in the market, requires New Zealand binary options brokers to be licensed and regulated by the country’s primary regulatory organisation. Read our detailed NZ binary broker guide to find the best trading partner for binary options trading.
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Is Binary Options Trading In New Zealand Legal?
Traders are assured of the legality aspect of binary trading in NZ, as the country hasn’t banned the product or introduced any restraining policies towards investing in the binary options market. Up until 2017, New Zealand was relaxed in its approach towards binary options trading, with traders being able to trade the markets without any regulatory intervention. New Zealand considered short-term derivatives trading to be significantly less-riskier than large-scale investments, which essentially allowed New Zealand traders to invest in any financial market worldwide.
However, the country has slowly started regulating short-term derivatives, by initially regulating the FX and CFD market. Forex brokers had been a major issue for New Zealand during the past few years, mainly due to the rise in the number of Forex scams and broker frauds. Therefore, Forex trading and investing in the CFD markets were regulated to meet the regulatory standards that were adopted for New Zealand’s other financial products.
Binary options brokers had enjoyed a few advantages by being able to circumvent NZ regulations, but recently, the NZ’s regulatory agency, the FMA, has made a move to regulate all companies that seek investments from NZ traders. Regardless, New Zealand has adopted a similar approach to its neighbouring Australia, as the country has not made any unnecessary rules that inhibit trader freedom. Therefore, unless New Zealand amends its laws or introduces new regulatory guidelines, binary options are considered to be a legal form of investment product in NZ.
Binary Options Assets & Trade Options Offered By NZ Brokers
Although binary options trading is proving to be popular in the New Zealand retail financial market, the country has yet to witness a massive influx of binary options brokers into the country. The FMA of New Zealand has brought outlaws that require companies to be regulated and licensed to offer their services to New Zealand binary traders, but the actual number of brokers operating in the country is quite limited. The limited options for binary options brokers, particularly since traders are not allowed to trade with overseas companies, may limit the number of trading options and assets available to traders. Regardless, traders can invest in the following markets as part of their binary options trading account packages:
- Forex: Traders who are comfortable with the FX market can choose to trade different binary options products that involve the major and minor currency pairs available in the market. Most binary brokers in New Zealand offer access to the most widely traded currency pairs, but the choice of FX assets may be limited to around 10 to 25 popularly traded currencies in the market.
- Commodities: Commodities trading involves trading in popular assets such as Gold, Silver, Oil, Gas, Copper, Sugar, and other similar instruments. Under normal circumstances, commodities options may be limited to Gold, Silver, and Oil, with only a few brokers taking the effort to introduce a wide range of commodities to its traders.
- Shares/Stocks: Almost all top New Zealand brokers offer access to leading stocks from principal financial markets, including the Americas, Europe, Africa, and the Asia-Pacific. Traders must also expect some brokers to have limited access to assets, which may only include a handful of shares from the US or EU markets.
- Indices: Global indices trading can be exciting, as traders can bet on a country’s performances through its primary index. Indices are highly popular binary options contracts, with a clear majority of brokers offering access to different indices and related contracts.
- Cryptocurrencies: Binary options brokers in New Zealand are following in the footsteps of other leading companies in the market by offering cryptocurrencies such as Bitcoin, which provide attractive trading opportunities and healthy payouts.
- ETFs/Bonds: Exchange Traded Funds and bonds are not as popular as some of the other binary options products, but expert traders may look for these options to invest in a varied portfolio.
Brokers offer different binary options products with varying payouts and expiry times. Conventional products such as the classic binary options products have expiry times varying from 30 seconds to a few hours, while the payouts range from 60% to 90%. Traders can also opt for high-yield options such as ladder and one-touch/no-touch options, where the probable payouts can reach around 1500%.
Binary Options Platforms In New Zealand
Platform options can be unique and depend on the choice of broker. Binary trading in New Zealand is made possible through dedicated binary options platforms, which can either be proprietary trading interfaces, or third-party trading platforms. Binary trading brokers in New Zealand also support mobile trading for smartphones and tablets, which ensures that the entire smartphone and tablet market gets access to dedicated apps from their respective app stores. Traders can access the binary options market through apps that are available for iOS, Android, and Windows devices, along with independent WebTraders for web browser-based trading.
Deposits & Deposit Bonuses At NZ Brokers
Binary options trading allows the flexibility to invest in the market with a small trading capital. New Zealand trading brokers also allow its traders to minimise their capital outflow by offering trading accounts for as low as $100. These deposits may be eligible for a bonus, but don’t expect NZ brokers to offer massive bonuses for its clients. You may be able to receive a nominal bonus in the form of trading credits, but such a bonus offer may not add any substantial value to your trading needs or investments.
You can make a deposit into your trading account through several online and offline payment systems, including bank wire, money transfer, credit/debit cards, and online payment processors. E-wallets such as Skrill and Neteller are highly preferred, as they have low fees of transactions and are usually more secure and convenient.
New Zealand Binary Options Regulation
All financial activities and companies operating in the financial sector come under the regulatory supervision of the Financial Markets Authority (FMA) of New Zealand. The FMA has adopted a tried and tested regulatory approach that incorporates several regulatory guidelines that are issued by other leading financial regulators such as the ASIC (Australia), the FCA (UK), the CySEC (Cyprus), and the NFA (USA). FMA’s regulatory supervision ensures that all clients’ deposits are maintained in segregated accounts and receive the best security against financial malpractices.
The FMA has also introduced numerous laws that were designed to curb the rise of numerous scams operating from New Zealand. Since the changes in licensing and regulatory reforms, the FMA has managed to create a secure environment that concentrates on safeguarding investors from all the fraudulent activities in the market. The FMA has indeed evolved into one of the most respected and approved agencies in the world.
Are There Any Advantages Of Trading With Binary Options Brokers In New Zealand?
Traders from New Zealand are required to invest their money with a broker that is regulated and licensed by the FMA. Recent regulatory changes have also made it compulsory for companies to have a valid FMA license to be able to cater to traders from NZ. Therefore, there are plenty of advantages to maintaining an account with a broker based in New Zealand. The primary advantage is that traders can receive unprecedented access to the broker’s support team, which offers around the clock support for any concerns or trading assistance. In the event of any dispute, traders can also approach the FMA or any other local authorities for arbitration, or even take the company to court for any issues that can’t be mutually resolved.
Trading with a local binary options company can also help traders to maintain a tax-compliant account, with professional assistance regarding the tax incentives and other expenses. Regulatory compliance is perhaps the most important advantage for NZ traders, but overseas traders can also benefit from the improved regulatory protection. However, international traders may not be able to receive the same level of protection as NZ citizens, but they can still take advantage of the excellent account offerings and trading features on offer.
A Few Pointers To Avoid Fraudulent Brokers
- Verify the FMA license by cross-referencing the license number provided by the broker with the official FMA website.
- Never deal with companies that seek cross-border payments without verifications.
- Avoid third-party services that claim to official representatives of a New Zealand binary options broker.
- If in doubt, always get in touch with the FMA for any fraud warnings or information on broker blacklisting.
- Which Agency Is Responsible For Regulating Binary Options In New Zealand?
All binary options brokers operating in New Zealand should be regulated and licensed by the Financial Markets Authority (FMA).
- Is It Possible For NZ Traders To Trade With International Brokers?
After the recent regulatory changes adopted by the FMA, it is currently illegal for traders from New Zealand to invest in overseas brokers.
- Can I Make Money With Binary Options Trading?
Yes, with a good trading strategy, excellent money management skills, and a right mindset, traders can make money through binary options trading.