Just like Australia, New Zealand is also home to some ECN forex brokers. In general, these brokers earn their money from commissions charged on each transaction. This stands in contrast to a spread-based revenue model, which is the model used by the majority of forex & CFD brokers. In New Zealand, forex brokers are not as heavily regulated as in the US and Europe, and they are therefore free to offer much higher trading leverage to their clients.
Some traders believe ECN trading is superior to other models because it avoids the potential for conflicts of interest between a broker and a trader. According to these people, brokers that act as dealing desks by taking the “other side” of a trade will profit every time a trader loses on a trade. Others, however, claim that is an irrelevant concern, since dealing desk brokers on the whole only make money from the spreads anyway. Either way, the reality is that most forex & CFD brokers in New Zealand and elsewhere are not true ECN brokers.