Australia’s securities regulator has proposed bringing certain derivatives settled in digital assets within its retail contracts-for-difference protections. The Australian Securities and Investments Commission opened consultation on 12 October on that change and a ten-year extension of the existing order, which expires on 23 May 2027.
A contract for difference, or CFD, gives exposure to changes in an underlying asset without ownership of that asset. ASIC’s Moneysmart explanation says gains and losses are calculated on the full position, although the customer initially provides a smaller amount called margin. That difference can make small price movements costly. In Australia, CFDs are contracts with an issuer rather than products traded on a licensed exchange.
The extension needs Ministerial approval. The proposed settlement change would not capture every crypto derivative: other elements of the CFD definition would still apply, leaving some fixed-expiry crypto futures and options outside. This is a consultation, not a rule that has taken effect. ASIC has separately sought evidence on restricting option CFDs with losses beyond the premium, but has not decided a ban.
Digital-asset settlement would enter the definition
The draft amendment would add digital-asset transfers alongside cash settlement and set-off between parties. Its definition covers cryptographically evidenced value or rights held and transferred through distributed-ledger technology or another distributed, cryptographically verifiable data structure. A crypto label alone would not determine coverage.
The existing order already requires an initial margin of at least 50 per cent of the contract’s notional value where a retail CFD’s underlying is a cryptoasset. The draft changes the terminology in that provision to digital asset; it does not replace that percentage.
The draft would clarify that each CFD requires a separate initial-margin calculation, without offsetting opposing positions. An option CFD limiting maximum loss to the premium paid would require that premium as margin. Otherwise, the calculation would use the margin rule for the option’s underlying asset or other reference.
Loss data and tighter conditions for discounts
ASIC’s January 2026 sector report supplies the historical evidence behind the review. It examined 52 issuers between October 2024 and December 2025, while its trading-outcome figures cover the 2023-24 financial year. During that financial year, 133,674 retail clients lost money trading CFDs, with net losses exceeding A$458 million, including A$73 million in fees. The report also found that 85 per cent of retail clients trading options CFDs made a net loss. These are CFD-sector figures, not losses confined to crypto products.
The draft also tightens the conditions for permitted fee discounts. Offers would need substantially equal terms for retail and prospective retail clients, prominent website and platform disclosure, and no conditions except those reasonably necessary for volume discounts. Records would have to be retained for seven years after the discount expires or ceases to be available.
Other protections already in the order include margin close-out arrangements and limits on an issuer’s recourse when a retail customer incurs a liability. The close-out provisions require an issuer to terminate one or more positions when account equity falls below the prescribed level, as soon as market conditions allow, until the required equity level is restored or all eligible positions are closed. The negative-balance provisions concern the relevant money and property in the customer’s CFD account. They do not turn a high-risk contract into a guarantee that its opening deposit will be preserved.
Moneysmart warns that fees can deepen losses and that customers depend on the issuer meeting its obligations. It also distinguishes retail protections from wholesale accounts, where protections may fall away. Overseas providers may not offer the safeguards available under Australian law. The Australian proposal therefore should not be read as a promise of protection for an Indian resident using any online trading platform.
Separate rulemaking is under way elsewhere. Dalimss News has covered the US CFTC consultation on retail crypto trading and the UK FCA’s crypto authorisation timetable. Those reports concern different jurisdictions and procedures; neither changes the scope or commencement of this Australian proposal.
Responses to ASIC are due by 5 pm AEDT on 9 November 2026. A final decision on the proposed extension and amendments has yet to be announced.
