Australian retail traders lost more than $458 million on contracts for difference (CFDs) in the 2023–24 financial year. The losses have prompted the country’s financial regulator to seek another 10 years of restrictions on the products.
The Australian Securities and Investments Commission (ASIC) announced the proposal on October 12. Its figures show that 68% of retail CFD traders lost money, including $73 million paid in fees. Losses were even more common among retail options-based CFD traders, 85% of whom finished the year in the red.
ASIC Seeks Changes to CFD Rules
ASIC’s existing order took effect in March 2021. It limits leverage, requires providers to close positions when account funds fall below specified levels, and prevents clients from losing more than their investment. The order is due to expire on May 23, 2027, unless it is extended with ministerial approval.
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The latest proposal would change how providers calculate the initial margin required to open a position. Under the proposed rules, each CFD would have its own margin requirement, without gains or exposure from opposing positions offsetting it. ASIC also wants clearer rules on trading incentives and would replace “cryptoasset” with “digital asset.”
Digital Asset Licensing Deadline Has Passed
A 10-year extension would give CFD providers greater regulatory certainty, ASIC said, although the regulator could revoke the order earlier. Certain cryptocurrency futures and options with fixed expiry dates would remain exempt.
Separately, September 30 marked the deadline for digital asset firms relying on temporary regulatory relief to obtain the required licenses. ASIC has warned that firms operating outside the permitted conditions could face civil or criminal penalties under Australian financial services laws.
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