Australia's CFD leverage limits face another review. The Australian Securities and Investments Commission (ASIC) said today (Wednesday) it will consult on extending the order.
The order expires on May 23, 2027, and every Australian financial services licensee issuing CFDs to retail clients would be affected. ASIC is preparing the consultation after a wider review of online trading platforms extended its distribution scrutiny beyond OTC derivatives.
The current order caps leverage at 30:1 for major foreign exchange pairs and 2:1 for crypto CFDs. It also requires margin close-out protection, negative balance protection and standardized risk warnings while banning certain inducements.
Q4 Consultation Precedes May Deadline
ASIC's regulatory timetable shows the review beginning in Q3 2026, followed by consultation in Q4. The regulator plans to seek ministerial approval in Q1 2027. The instrument will then be extended or expire in Q2.
The corporate plan goes further than a generic review commitment. It says ASIC will consult on proposals to amend and extend the CFD order, although neither document identifies which provisions may change.
"Strong regulation and economic growth are not opposing objectives," ASIC Chairwoman Sarah Court said.
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ASIC imposed the order in March 2021 and extended it for five years in April 2022. The current review will determine whether the restrictions continue beyond that term.
A separate process is already underway for the financial requirements that apply to retail OTC derivative issuers. ASIC proposed extending that instrument to 2032 without changing the minimum net tangible assets test.
The capital instrument expires on October 1, 2027. The CFD product order reaches its sunset date more than four months earlier, so brokers face two regulatory processes covering different parts of the same retail derivatives business.
Routine AFS License Target Drops to 120 Days
ASIC also shortened its performance target for completed routine Australian financial services and credit license applications. It aims to finalize 80% within 120 days, down from 150 days.
The target applies to complete applications received from July 1, 2026. Complex applications are excluded. The plan gives no deadline for clearing the regulator's stock of older high-complexity cases.
The change could affect a licensing pipeline that was already expanding before the new crypto regime. ASIC granted 290 AFS licenses in the 2025 financial year and canceled or suspended 215.
Other efficiency commitments include cutting thematic surveillance notices by 15%. ASIC also targets in-principle decisions on 70% of completed relief applications within 28 days and 90% within 90 days.
Digital Asset Platforms Enter the Licensing Workload
The regulator will issue guidance and set standards for digital asset platforms and tokenized custody platforms under Australia's new framework. It will also update its systems and train staff for the supervisory role.
The dedicated regime starts in April 2027. FinanceMagnates.com previously reported that crypto providers were already entering the AFS licensing pipeline under ASIC's updated interpretation of existing financial product rules.
Artificial intelligence is also in the work program. ASIC plans to examine how banks use AI in customer-facing services and monitor AI-driven manipulation, deepfakes and misinformation through social media and cross-market monitoring.
Enforcement Targets Run Through 2030
The lighter administrative targets do not reduce ASIC's court or criminal referral goals. The regulator plans to refer at least 25 people or companies each year to the Commonwealth Director of Public Prosecutions and start at least 30 civil proceedings annually.
Those targets follow a year in which ASIC removed or restricted 87 firms and individuals from financial services, up from 58. It recorded 150 administrative enforcement outcomes, compared with 105 a year earlier.
The annual targets of 25 criminal referrals and 30 new civil proceedings remain in place through the 2029-30 financial year.
