ASIC seeks 10-year extension of CFD protections

ASIC is proposing to extend its product intervention order governing contracts for difference (CFDs) until 2037, while tightening protections to address risks posed by increasingly varied ways of settling the complex, leveraged products.

The regulator is seeking industry feedback on amendments intended to ensure retail investors receive consistent protection, including where CFDs are settled through digital assets rather than cash. The existing order is due to expire in May 2027.

ASIC commissioner Alan Kirkland said the measures had substantially reduced investor losses but that CFDs remained a high-risk product.

"The evidence demonstrates that ASIC's CFD intervention order has materially reduced retail investor harm by addressing key drivers of harm, like excess leverage," Kirkland said.

Within six months of the original order taking effect, aggregate net losses across retail client accounts fell by 91%. However, ASIC's latest data shows retail investors lost more than $458 million trading CFDs over a 12-month period, including $73 million in fees.

The proposed changes would update the definition of CFDs to cover contracts settled through digital assets, clarify initial margin requirements for options-based VFDs and prevent margin requirements from being reduced by netting opposing positions.

ASIC is also proposing clearer conditions around permitted discounts and the provision of educational research tools, alongside updated terminology replacing "crypto asset" with "digital asset".

"Some products expose retail investors to the same risks as CFDs but may fall outside the current PIO because of how they are settled," Kirkland said.

"The proposed updates ensure protections apply consistently, regardless of whether a CFD is settled by cash, set off or digital assets."

Separately, ASIC is seeking views on whether CFDs over options that can expose retail investors to losses exceeding the premium paid should remain available to them.

The intervention order provides leverage limits, standardised margin close-out arrangements and negative balance protection, while prohibiting certain inducements.

Submissions from CFD issuers, industry bodies and consumer representatives close at 5pm AEDT on 9 November 2026. The proposed extension is subject to ministerial approval.