The relevant bodies that have a regulatory impact are the RBA which issues foreign exchange licenses and secondly industry bodies such as AFMA and ACI Australia. The official regulation of the foreign exchange market dates back to the Reserve Bank Act in 1959 which gave the RBA the power to grant foreign exchange licenses and regulate the banking community. However once the licenses are gained the licensee operates in accordance with market convention and the Corporations law. These industry bodies representing the combined interests of the industry participants and operate without the backing of legislation. The text below has been supplied by the RBA as at Jan 2001.
Regulations provide the legislative framework for the Australian foreign exchange market.
In terms of the Regulations, financial institutions dealing in foreign exchange require authorisation from the Reserve Bank. The process of authorisation involves detailed examination of factors bearing on these criteria. Authorised dealers agree to provide statistical returns and other information required by the Bank, and comply with any directives and guidelines issued by the Bank in relation to their foreign exchange business. Authorities are variable or revocable by the Bank at any time. It is open to authorised dealers to appoint agents to conduct foreign exchange business.