Australia’s corporate regulator has proposed keeping its retail protections for contracts for difference in place for another ten years, while tightening rules that govern options, digital-asset settlement and the calculation of margin.
The Australian Securities and Investments Commission opened consultation after finding that losses remain widespread even though its 2021 product intervention order sharply reduced the scale of harm. In the 2023–24 financial year, 68 per cent of retail clients who traded CFDs lost money. Their aggregate net losses exceeded A$458 million, including A$73 million in fees.
CFDs are leveraged derivatives that let a customer take exposure to movements in an asset, rate or index without owning the underlying product. ASIC’s existing order limits leverage, requires standardised margin close-out arrangements, protects against negative balances and restricts inducements used to encourage trading.
The proposed revision would make clear that initial margin must be calculated separately for each CFD. Opposing positions could not be netted to reduce the amount required. ASIC said intervention over margin-netting practices has already led 28 issuers to refund more than A$36 million to customers.
The regulator also wants the regime to cover products with the economic features of CFDs when settlement occurs through a transfer of digital assets rather than cash or set-off. It is separately asking whether CFD options capable of exposing a customer to losses beyond the premium should remain available to retail investors at all.
The current order is due to expire in May 2027. Any extension requires ministerial approval. If approved, the revised protections would run until 2037 unless revoked earlier. Comments close on November 9, and the proposals remain consultative rather than binding law.
