Monitoring compliance for CFDs and binary options outlined as a priority for ASIC

The Australian Securities and Investments Commission (ASIC) has published its new four-year corporate plan for 2021 to 2025.

The regulator outlined the distribution of retail over-the-counter (OTC) derivatives and specifically contracts for difference (CFDs) and binary options as a “strategic priority” level 2.

In its corporate plan, ASIC, highlighted three key actions it will take regarding OTC derivatives. First action is the monitoring of the compliance with the CFDs e and binary options product intervention order.


Earlier this year, ASIC imposed restriction on CFD trading. In March, the regulator lowered the maximum leverage limit from 500:1 to 30:1.

The Aussie watchdog also banned the sale of Binary Options to retail clients for 18 months in May this year, after which time it may be extended or made permanent.

As a second key action, ASIC outlines assessment of the effectiveness of the taken measures.

The outline says:

Assess the effectiveness of the orders in reducing harm, areas of possible avoidance, and whether the orders should be extended.

ASIC added a third key action:

Take regulatory action, including enforcement action where warranted, to address misconduct.

The regulator has recently focused in on the gaining popularity cryptocurrency industry and has warned against unlicensed exchanges offering services to Australian traders.

Read Also: