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Thanks to some very clear-cut laws, CFD trading New Zealand is not just legal, it’s also exceptionally well-regulated, with just a small number of licensed brokers kept under close scrutiny.
Our guide will show clearly that when you trade CFDs in New Zealand you are exceptionally well looked after. We’ll also be discussing all of the important factors that add up to a good broker and tell you a bit about some other types of trading that might interest you.
It doesn’t matter in the slightest whether you are looking for the best CFD platform in New Zealand or the best CFD broker in Kenya, this guide contains plenty of information that has truly universal relevance.
No doubt our readers from the Land of the Long White Cloud will benefit from a full understanding of how CFD trading in New Zealand is regulated, as well as exploring other trading opportunities they can access.
Beyond that, the remaining parts of this guide are suited to any reader, regardless of their location. Anyone who is new to the world of CFD trading will benefit greatly from understanding what to look for in a good broker and for those of you who are more experienced, you’re sure to pick up some tips along the way.
A good deal of confusion has arisen regarding online CFD trading in New Zealand, so in this section of our guide, we will explain to you exactly how regulation works in your country. We’ll begin by telling you that CFD trading in New Zealand is entirely legal, but there are certain prerequisites for CFD brokers, which traders need to be aware of.
CFD brokers in New Zealand must be registered on the FSPR (Financial Services Provider Register). However, being listed on the register does not mean that a broker has a licence or is operating under regulatory oversight. This is the main area where confusion arises and unscrupulous brokers have been known to take advantage of that confusion.
The broker must apply to the Financial Markets Authority (FMA) for a Derivatives Issuer Licence and only when that application is successful is the broker legally permitted to offer CFDs to New Zealand residents.
Only those operators which have successfully completed both processes are legal to trade with and are the only ones we would consider adding to our CFD broker list for New Zealand, which currently has just 25 entries, consisting only of the brokers listed on the FMA website.
The FMA site also maintains a list of suspended licences and posts warning notices with regards to any brokerage they believe could pose a threat to anyone who trades CFDs in New Zealand, or is falsely claiming to be licensed.
Although the level of regulation for CFD trading in New Zealand may seem to you like overkill, in some other countries there is no protection at all, CFD trading in Nigeria being just one such example, so always remember that it is there for your own protection.
As you have seen from the previous section, this is the most important area of all, as it relates directly to the legitimacy and security of your CFD trading activity. It is not sufficient to believe that a broker holds a licence simply because it states that on its website, you must also confirm the facts on the FMA website.
The best CFD broker in New Zealand will not compromise on matters of security either, but it’s always worth checking out a few things for yourself. Firstly, look for web page URLs that start with https:// which indicates you have a secure SSL connection from your browser to the broker’s site. The authenticity of this can also be checked by hovering over the padlock icon.
Transmissions of sensitive personal data and all financial transactions should be subject to additional SSL encryption, the ideal being 256-bit AES. All logins to the broker’s site should have at least 2FA authentication in place and preferably, the option to add your own additional security features like biometric login when using an app.
There is no prescribed fee structure for CFD trading in New Zealand. Each broker sets its own fees and there are a number of variations. When you register with a broker, you will be asked to confirm that you have read all of the T&Cs applicable to traders, a part of which will include all fees that you may expect to pay. That’s why it is always best to research this part first and preclude any unpleasant surprises later.
The best CFD broker in New Zealand will offer a number of different account types and it will almost certainly be worth your while to consider one of these. The differences between them usually relate to the minimum investment required, the minimum trading volume over a specific period, the leverage available and the fees applied. In short, larger investments and high trading volumes result in more leverage and lower fees.
There are four key areas that we concentrate on during our reviews and within each of those there is a sub-set which are the most relevant to our readers.
The list above is far from exhaustive and we always make a point of including anything of particular relevance in the relevant section of our reviews.
By this point, we hope that you have been able to compile a shortlist of suitably licensed and secure brokers and are now ready to make a final decision. So, in this section, our aim is to give you just a few final pointers that you may not have considered.
You might want to give some thought to your preferred way of trading. If it’s an activity you prefer to do in the peace and quiet of your home using a PC or laptop, then that’s fine. But if you want regular access to your broker from other locations, then finding a broker with a suitable app is crucial. Similarly, your physical location is important when considering the legality – fans of CFD trading in Germany will, of course, need to be in Germany to take part.
You are the one that is going to be spending time on a platform, so although we might think a particular one is the best thing since sliced bread, you might not have quite the same opinion. Take advantage of any free demo availability and ideally, try out several, second best is not good enough.
You might be quite content with simply trading CFDs in New Zealand for now, but if you think you might want to expand your horizons (and your portfolio) in the future, then consider a broker that offers a variety of derivative products rather than just CFDs.
It’s no good complaining that you can’t get any help from your broker after a certain time of day, or that you prefer to talk on the phone rather than typing into a live chat, if you haven’t done your homework. Good customer support is priceless to a trader, always make sure that your broker provides exactly what you need.
It’s never a bad thing to check out a few user review sites and trading forums. Just by checking the stats and reading through some of the posts, you’ll very quickly get a feel for how well a broker looks after its clients and how it responds to their feedback.
All types of trading are entirely legal in New Zealand, provided your trading activities are confined to brokers that are fully-licensed by the FMA. You therefore have a number of different trading options to consider.
It is highly likely that the best CFD platforms in New Zealand will also offer other types of derivative trading. Availability will vary between brokers, but may include Binary Options, Forex, Futures, Standard Options and Leveraged ETFs. All of these financial instruments are included within the scope of the broker’s Derivative Issuer Licence.
Unlike CFDs where you trade on the underlying asset but do not own it, when you invest in stock you are buying shares in the asset itself. The New Zealand Exchange (NZE) regulates the stock exchange in partnership with the Financial Markets Authority. However, the FMA has ultimate regulatory control over all transactions.
There are three things you must do before you can make a stock investment:
Don’t forget that any profit you make from your trading activities in New Zealand constitutes an income. As such, it must be declared to the Inland Revenue Department (IRD) at the end of each tax year. In order for a liability assessment to be completed by the IRD, you will need to provide them with a detailed profit and loss analysis.
We hope that you have found our guide informative and that it has cleared up any grey areas regarding the regulation applicable to online CFD trading in New Zealand. We would also like to think that by using our advice you will have a much better chance of finding the best online trading platform for your needs.
Don’t forget that there’s plenty more helpful information available on our site, which includes more trading guides, country-specific guides and lots of in-depth CFD broker reviews for New Zealand as well. Make sure you visit us again soon.
If you are asking that question online, then you’re sure to have seen plenty of conflicting answers! The laws concerning CFD trading in New Zealand can appear a little confusing, but by reading our in-depth guide you’ll find the definitive answer with a full explanation. Head over now and get the accurate facts!Â
The answer to your question depends on your location. For example, the best CFD broker in Spain would automatically cap leverage at a certain ratio due to regulatory constraints. However, if you trade CFDs in New Zealand, the amount of leverage you will be allowed is decided by your broker, based on a number of different factors.Â
Whilst there is very little to stop you signing up with any broker you want, there are a number of very good reasons why it would not be a good choice. Before you make any rash decisions, be sure to read our in-depth guide to CFD trading in New Zealand and then you can weigh up the benefits for yourself.
There are only a few countries that do not expect to collect tax from CFD traders and New Zealand isn’t one of them. To find out more about the type of tax you might be liable for and how it is calculated, please check out our in-depth guide.Â
When it comes to trading, New Zealand is one of the most highly-regulated countries in the world. To trade CFDs in New Zealand you must only interact with brokers who comply with very specific guidelines. In our guide to CFD trading in New Zealand, we have detailed how to check if a broker is legit and where you can find a definitive list of suitable brokers.Â
Trading financial products carries a high risk to your capital, especially trading leverage products such as CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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