Questions to ask when choosing a broker

ASIC has created a list of questions that it recommends you ask when choosing which contracts for difference (CFD) provider to trade with. Because ASIC treats CFDs and margin FX as similar products, this list may also be useful for those choosing an FX provider. Here is the list, adapted for FX:

• What is the financial position of the FX provider?

• What is the FX provider’s policy on the use of client money?

• How does the FX provider determine prices?

• Can the FX provider change or re-quote the price after you have already placed your order?

• When processing FX trades, does the FX provider enter into a corresponding position in the market for the underlying asset?