Major Regulatory Overhaul for CFD Brokers in Australia

The Australian Securities and Investments Commission (ASIC) has announced strict new guidelines for Contract for Difference (CFD) issuers. This move is aimed at protecting retail clients from the significant risks associated with high leverage trading.

Key Regulatory Changes

The new rules will limit the leverage available to retail clients for various asset classes. This brings Australia in line with other major jurisdictions like the UK and Europe.

• Major Currency Pairs: Leverage limited to 30:1.
• Minor Currency Pairs, Gold, and Major Indices: Leverage limited to 20:1.
• Commodities (excluding Gold) and Minor Indices: Leverage limited to 10:1.
• Crypto Assets: Leverage limited to 2:1.
• Shares: Leverage limited to 5:1.

Impact on Brokers

Brokers operating in Australia will need to update their trading platforms and client agreements to comply with these new limits. Failure to do so could result in significant fines and license suspension.

"This is a necessary step to ensure the long-term sustainability of the CFD industry in Australia," said an ASIC spokesperson. "We want to ensure that consumers are not exposed to losses that exceed their initial investment."