The Australian Securities and Investments Commission (ASIC) has published a draft instrument to extend its product intervention order (PIO) on contracts for difference (CFDs) by 10 years. The draft would also cover CFDs settled through digital assets, set margin rules for CFDs over options, and bar the netting of opposing positions when calculating initial margin.
The current order is due to expire on 23 May 2027. Subject to Ministerial approval, the extended order would remain in force until 2037 unless revoked earlier.
What the Draft Instrument Changes
The draft amends ASIC Corporations Instrument 2020/986, the original CFD order. It would take effect the day after registration on the Federal Register of Legislation.
Read more: ASIC Warns Crypto Perps Now Mimic CFDs While Dodging Its Rulebook
The CFD definition would be rewritten so that obligations on termination can be settled in cash, by transfer of digital assets, or by set-off.
The underlying asset would be described as “of any nature whatsoever and whether or not deliverable”. The term “cryptoasset” would be replaced by “digital asset”, defined as a digital representation of value or rights whose ownership is evidenced cryptographically and which is held and transferred electronically on a distributed ledger or similar data structure.
On discounts, issuers could offer them only if they are unconditional, or subject only to conditions reasonably necessary for a volume-based discount. Discounts must be available to all retail clients on substantially the same terms and displayed clearly on the issuer’s website and trading platform. Issuers would also keep written records of each discount for 7 years after it ends.
Education or research tools would need to be accessible to all retail clients and not offered as an inducement.
For margin, a CFD over an option with maximum loss limited to the premium would require initial margin equal to that premium. Where losses are not limited to the premium, margin would be calculated as if the CFD referenced the option’s underlying. Margin would be applied separately to each CFD, so long and short positions could not be netted.
ASIC Commissioner Alan Kirkland said: “Some products expose retail investors to the same risks as CFDs but may fall outside the current PIO because of how they are settled.”
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Steps to Minimise CFD Losses
ASIC said aggregate net losses by retail client accounts fell 91% within six months of the current order, from $372 million to $33 million per quarter. Margin close outs fell 87% per quarter, and active retail accounts fell 29%, from 504,905 to 357,841. ASIC’s latest data shows 12-month losses above $458 million, including $73 million in fees.
“Most retail investors lose money trading CFDs,” Kirkland said. “Within six months of our current order taking effect, aggregate net losses by retail client accounts fell by 91%.”
“However, CFDs continue to remain highly risky products.”
ASIC released the finalised order on 23 October 2020, after Consultation Paper 322 in August 2019. It took effect on 29 March 2021, with leverage capped at 30:1 for CFDs on major currency pairs. In April 2022, ASIC extended it for five years, to 23 May 2027.
The regulator has also overseen AU$4.3 million in compensation to more than 1,500 retail clients of seven CFD issuers whose leverage ratios exceeded the permitted limit. In January 2026, ASIC secured the return of nearly $40 million to more than 38,000 retail investors after a whole-of-industry review.
