https://www.fpmarkets.com/uk/asic-regulatory-update/
https://www.icmarkets.com/blog/asic-product-intervention/
https://www.daytrading.com/asic-measures-reduce-leverage-introduce-negative-balance-protection
Note: This announcement only applies to ASIC regulated retail clients and will come into effect from 29 March 2021. There is no change to the current situation for now.
On 23 October 2020, ASIC made a product intervention order with respect to contracts for difference (CFDs) for retail clients. The order imposes conditions on the issue and distribution of CFDs.
The new changes are designed to strengthen protections for retail clients, by reducing the size and speed of losses through the measures listed above. These measures are also similar to those already applied in major markets, such as the United Kingdom and European Union
leverage to maximum ratios of:
The order will restrict the CFD leverage that service providers can offer to retail clients. The maximum ratio that will be allowed for CFD products are listed in the table below:
Margin close-out percentages
Standardise CFD issuers’ margin close-out arrangements
Negative balance protection
Limit a retail client’s CFD losses to the funds in their CFD trading account by protecting against negative account balances.
Promotional offers
Inducements to retail clients. Service providers are prohibited from giving or offering any inducements. This includes trading credits, rebates or 'free' gifts such as electronic devices.
https://www.icmarkets.com/blog/asic-product-intervention/
https://www.daytrading.com/asic-measures-reduce-leverage-introduce-negative-balance-protection
Note: This announcement only applies to ASIC regulated retail clients and will come into effect from 29 March 2021. There is no change to the current situation for now.
On 23 October 2020, ASIC made a product intervention order with respect to contracts for difference (CFDs) for retail clients. The order imposes conditions on the issue and distribution of CFDs.
Why Are The Changes Being Introduced?
Over a five-week period in March and April 2020, retail client losses from a sample of 13 CFD brokers were reviewed. ASIC found that these clients made a net loss of over $774 million. Indeed, currency and equity markets have been notably volatile since 2019, which in turn has dramatically increased both losses and profits for traders.The new changes are designed to strengthen protections for retail clients, by reducing the size and speed of losses through the measures listed above. These measures are also similar to those already applied in major markets, such as the United Kingdom and European Union
What Are The Changes?
From Monday 29th March 2021, the Australian Securities and Investments Commission (ASIC) will impose a product intervention order, which will restrict CFDleverage to maximum ratios of:
The order will restrict the CFD leverage that service providers can offer to retail clients. The maximum ratio that will be allowed for CFD products are listed in the table below:
| Maximum Ratio | CFD Product |
|---|---|
| 30:1 | Major currency pairs |
| 20:1 | Minor currency pair, gold or a major stock market index |
| 10:1 | Commodity (other than gold) or a minor stock market index |
| 5:1 | Shares or other assets |
| 2:1 | Crypto-assets |
Margin close-out percentages
Standardise CFD issuers’ margin close-out arrangements
Negative balance protection
Limit a retail client’s CFD losses to the funds in their CFD trading account by protecting against negative account balances.
Promotional offers
Inducements to retail clients. Service providers are prohibited from giving or offering any inducements. This includes trading credits, rebates or 'free' gifts such as electronic devices.
