The Australian Securities and Investments Commission (ASIC) has proposed extending its contracts for difference (CFD) product intervention order for another 10 years, alongside new amendments aimed at strengthening retail investor protections and addressing emerging risks in leveraged trading.
Announced on October 12, 2026, the proposal would maintain existing restrictions on leverage, margin close-out arrangements, negative balance protection and certain trading incentives. The current order, introduced in March 2021, is scheduled to expire in May 2027.
ASIC is also proposing changes to margin requirements for CFDs linked to options, clarifying that initial margin must be calculated separately for each CFD rather than reduced by offsetting positions. Additional amendments would strengthen rules covering promotional discounts and the use of educational or research tools as trading incentives.
The regulator also wants to expand the definition of CFDs to include certain derivatives settled through digital assets, ensuring that products carrying equivalent financial risks face consistent regulatory requirements regardless of their settlement method.
According to ASIC, 68% of retail CFD traders recorded net losses during the 2023–24 financial year, with combined losses exceeding A$458 million, including A$73 million in fees. The regulator also reported that 85% of clients trading CFDs linked to options lost money.
ASIC Commissioner Alan Kirkland highlighted that the existing intervention measures had reduced aggregate retail client losses by 91% within six months of implementation, although significant financial risks remain.
The regulator is seeking industry feedback on the proposed amendments, including whether certain CFDs linked to options should face additional restrictions due to their potential to expose investors to losses greater than the premium received.
Market participants, brokers and other stakeholders have until November 9, 2026, to submit their responses. Subject to ministerial approval, the extended restrictions would remain in effect until 2037 unless revoked earlier.
