ASIC Crackdown to Make CFD Marketing Clearer and More Transparent for Australian Traders

ASIC has moved to significantly improve transparency in the way contracts for difference (CFDs) are marketed to Australian retail traders, after a sweeping review found that many providers overstated potential benefits and failed to clearly explain the risks and costs involved. Following regulatory intervention, dozens of CFD brokers have been forced to rewrite websites, rebalance promotional messaging and clearly disclose that they offer leveraged derivatives rather than real shares or assets, marking a major shift toward more honest and consumer-focused marketing in the sector.

ASIC has secured nearly $40 million in refunds for more than 38,000 retail investors after a sweeping review found widespread compliance failures across Australia’s contracts for difference (CFD) industry. The intervention follows a sector-wide investigation of 52 licensed CFD issuers between October 2024 and December 2025, culminating in ASIC’s report Risky business: Driving change in CFD issuers’ distribution practices.

CFD trading in Australia allows investors to speculate on price movements in assets such as shares, indices, currencies and commodities without owning the underlying instrument. However, they are complex, leveraged products and ASIC data shows that 68% of retail CFD traders lost money in the 2024 financial year, with net losses exceeding $458 million, including $73 million in fees. ASIC said its review revealed systemic weaknesses in how CFDs were marketed, sold and monitored, exposing retail traders to unnecessary harm.

One of the most significant findings related to so-called “margin discounting” practices, where brokers offered reduced margin requirements to clients holding opposing long and short CFD positions. ASIC found that these arrangements increased funding costs while removing the ability to profit from the trades, breaching existing product intervention rules. Following regulatory pressure, 28 issuers refunded more than $36 million to affected clients for fees, spreads and swap charges, with additional refunds ordered for other rule breaches.

The regulator also identified widespread failures in how brokers determined whether CFDs were appropriate for individual clients. Many firms used poorly designed onboarding questionnaires, relied on self-certification, or failed to define their target markets properly. As a result, 44 CFD providers were required to overhaul their client onboarding processes, introducing tougher “knock-out” questions and stricter limits on repeated attempts to pass knowledge tests. In several cases, brokers temporarily stopped onboarding new clients until deficiencies were fixed.

Marketing practices were another major focus. ASIC found that many CFD websites overstated potential benefits, downplayed risks, or failed to clearly explain that customers were trading CFDs rather than real shares or assets. Forty-six issuers were forced to rewrite website content, with one broker amending nearly 1,000 webpages to remove misleading or unbalanced claims.

Beyond refunds, ASIC said the review has driven lasting structural change across the sector. Forty-two issuers introduced new systems to monitor client trading outcomes, while 48 firms fixed serious errors in derivatives transaction reporting, after ASIC identified more than 70 million incorrect trade reports. Reportable breach notifications across the industry rose 127% year-on-year, signalling greater compliance awareness.

ASIC Commissioner Simone Constant said the action was about reducing consumer harm in a market where losses are common. While CFDs remain high-risk products, ASIC said stronger rules, better oversight and meaningful enforcement should lead to fairer outcomes for traders. The regulator confirmed that improving protections for CFD clients will remain a priority as it considers the future of its CFD product intervention rules, which are due to expire in 2027.