Forex and CFD rules, a guide by DottoIn plain words

Guide 05 · Before an account is opened

Checking a forex broker, and spotting a scam

Among the checks Moneysmart describes for a forex provider is whether it holds an Australian Financial Services (AFS) licence, which ASIC’s Professional Registers Search will show. For a CFD provider without one, Moneysmart’s advice is short: don’t deal with them.

General information, not financial advice. The official places to check are ASIC’s registers and Moneysmart’s page on forex trading.

Six checks

  1. Look the provider up on ASIC’s registers

    ASIC’s Professional Registers Search finds a person or organisation registered or licensed with ASIC to provide a service. The same page leads to the banned and disqualified register, which lists organisations disqualified or banned from providing financial services, and to the public warning notices ASIC has issued about conduct in relation to a financial service or product. Moneysmart says CFD issuers operating in Australia must hold an AFS licence.

  2. Make sure the licence really belongs to them

    A licence number on a website proves little by itself. Moneysmart warns that scammers misuse AFS licence details by claiming to hold a licence, by using another entity’s licence number, or by impersonating a licensed financial services business. A scammer may also copy a real business’s licence details, branding or contact information.

  3. Check the complaints scheme

    Moneysmart’s advice on investment scams is to use a licensed AFS provider and to check that it is listed on AFCA’s financial firm directory. The Australian Financial Complaints Authority (AFCA) is an independent dispute resolution scheme that can help resolve disputes with financial firms and services.

  4. Moneysmart’s investor alert list

    Moneysmart’s investor alert list names entities that do not hold a current AFS licence or Australian credit licence from ASIC and are not allowed to offer investments in Australia; a name missing from it does not mean the name can be trusted.

  5. Overseas providers

    Moneysmart says overseas CFD providers often don’t hold an AFS licence, so the consumer protections in Australian law will not apply, and there is no access to independent dispute resolution through the Australian Financial Complaints Authority. If an overseas provider has no AFS licence, it could be a scam. For a company overseas, Moneysmart suggests checking with that country’s regulator, which the International Organisation of Securities Commissions (IOSCO) lists for most countries, and using IOSCO’s alert portal for warnings about international companies.

  6. Add-ons, courses and signals

    Providers that offer add-ons such as software, trading robots or seminars may need their own AFS licence, or to be authorised by a licensee. Moneysmart asks traders to be wary of any course, signal service, copy-trading service, program or AI tool that claims to predict currency movements accurately, and says a basic trading course or seminar won’t give enough information to start trading.

What a forex scam looks like

On forex in particular, Moneysmart warns that scammers may use fake platforms and promises of easy profits to draw people in. With an investment scam, the product does not exist, and the person selling it is most likely not who they say they are. The signs Scamwatch and ASIC describe:

  • claims that a trading bot uses AI to make passive income and returns that cannot be achieved; ASIC says it is very unlikely these bots exist;
  • an account that appears to grow on fake data, with small withdrawals allowed to build trust, and reasons not to pay when the whole balance is asked for;
  • an approach through online dating or social media, building a relationship before asking for an investment in a fake opportunity, which Scamwatch calls romance baiting.

ASIC’s advice is to stop before acting: don’t give personal information, don’t act on investment advice found on social media, and don’t feel pressured to invest. ASIC’s warning about offers of very high returns is blunt: “if it sounds too good to be true, it is probably a scam.” In 2025, ASIC coordinated the takedown of 11,964 phishing and investment scam websites, 90% more than in the 12 months before.

Reporting a scam

Not every problem is a scam: some conduct is a real business or person doing the wrong thing in providing financial services, and Moneysmart says financial sector misconduct other than scams can be reported to ASIC. Where to report a scam, and where to get help if money or an identity is at risk, is set out on Moneysmart’s page on reporting an investment scam.

What rides on the provider is set out in what forex and CFDs are, which explains why each CFD is a contract with its issuer, and in retail or wholesale: why it matters; the short version is on the home page.