Australia Proposes Retail Protections for Crypto-Settled CFDs

Australia is proposing to extend retail protections to qualifying contracts for difference settled through digital assets, addressing a gap that can leave economically similar products subject to different safeguards.

The Australian Securities and Investments Commission (ASIC), Australia’s financial regulator, would apply existing leverage-limit protections, standardized margin close-out rules, negative-balance protection and restrictions on inducements to qualifying digital-asset-settled CFDs alongside cash- and set-off-settled contracts.

In the 2023–24 financial year, 133,674 retail CFD clients lost more than A$458 million across asset classes, including A$73 million in fees. Sixty-eight percent of retail clients lost money, while 85% of clients trading options CFDs recorded losses.

The proposal would require initial margin to be calculated separately for each CFD. Twenty-eight issuers refunded more than A$36 million after margin-netting practices were identified.

“The proposed updates ensure protections apply consistently, regardless of whether a CFD is settled by cash, set-off or digital assets,” ASIC Commissioner Alan Kirkland said.

CFDs are leveraged derivatives that allow clients to speculate on price movements without taking ownership of the underlying asset. The proposed changes focus on settlement method, under which products with similar economic exposure may receive different retail protections.

Some fixed-expiry crypto futures and options may remain outside the framework. The proposal also seeks views on whether retail investors should continue accessing options CFDs that can create losses exceeding the initial premium.

The current CFD product intervention order began March 29, 2021, and is scheduled to expire May 23, 2027. Subject to ministerial approval, the replacement order would remain in force until 2037 unless revoked earlier.

The consultation follows earlier consideration of leverage caps for digital-asset derivatives. Submissions are due by 1 a.m. ET Nov. 9, 2026 (0600 UTC).