ASIC tests a 10-year CFD product intervention order extension

The Australian Securities and Investments Commission (ASIC) has asked whether the CFD product intervention order should remain until 2037. Consultation CS 64, released on October 12, 2026, proposes a further 10-year life for the order, with tighter margin, inducement and digital-asset settlement terms, and comments are due at 5 pm Australian Eastern Daylight Time (AEDT) on November 9, 2026.

The order is the ASIC Corporations (Product Intervention Order—Contracts for Difference) Instrument 2020/986, made under subsection 1023D(3) of the Corporations Act 2001. Its conditions on retail contracts for difference have applied since March 29, 2021, and CS 64 states that it is due to expire on May 23, 2027 unless it is extended. Any extension needs Ministerial approval. The paragraphs below set out what sections 6 and 7 require, what the draft would change, where the United Kingdom and the 2018 European measure differ, and why the Union Standard penalty is not a sanction for breaching this order.

Key facts

• Instrument 2020/986 has applied since March 29, 2021 and is due to expire on May 23, 2027. ASIC extended it on April 6, 2022 (26-239MR; 22-082MR).
• Section 7(2) sets initial margin from 3.33% to 50%. Close-out is at 50% of aggregate initial margin. Section 6 bans specified inducements from March 29, 2021.
• In 2023–24, 68% of retail clients made a net loss. Aggregate net losses exceeded $458 million, including $73 million in fees. On CFDs over options, 85% made a net loss (CS 64).
• In the first six months, quarterly aggregate net losses fell 91%, from $372 million to $33 million (22-082MR). Active retail accounts fell 29%, from 504,905 to 357,841 (26-239MR).
• After margin-netting, 28 issuers refunded more than $36 million (CS 64). 26-004MR records nearly $40 million returned to more than 38,000 investors. The two sums are separate.
• 26-117MR (June 12, 2026) reports $300.2 million in penalties for 2018–2020 conduct. The EuropeFX stay was still in place on October 7, 2026.

Methodology and sources

Dates and the paper number come from asic.gov.au, not a law-firm note: CS 64 and 26-239MR, both October 12, 2026, and the as-made Instrument 2020/986. The register lists it in force. As-made notes still cite an 18-month life under subsection 1023G(2); ASIC's expiry is May 23, 2027. Comparison uses FCA PS19/18, COBS 22.5, COBS 22.6 and ESMA's June 1, 2018 Article 40 release, which describes a three-month measure, not a 2026 pan-EU rule. Dollar sums are as printed. The draft is numbered 2026/XX.

Related:FCA CP26/34 maps the 2028 transaction-reporting switch

What Instrument 2020/986 requires of a retail CFD

Section 4 covers an off-market derivative that tracks an underlying, is open-ended or typically closed early, can be terminated by the holder, and settles in cash or by set-off. Options, futures, swaps and forward rate agreements generally fall outside. A major pair is any two of the Australian dollar, British pound, Canadian dollar, euro, yen, Swiss franc and US dollar. Section 5 has applied since March 29, 2021 only if the person is in Australia or the offer is received here. 20-254MR stated the floors as leverage of 30:1, 20:1, 10:1, 2:1 and 5:1.

Section 7(3) forces a close-out if net equity falls below 50% of aggregate initial margin. Section 7(5) limits recourse to money and property in that CFD account, not assets outside it. UK segregation is a different rule: how a UK CFD broker segregates client money under CASS 7. Section 6 bans a gift, rebate, trading credit or reward used to induce an account opening, a payment of client money or a CFD purchase. A fee discount offered to all retail clients is outside the ban. ASIC said in 2020 it would not add issuer-specific risk warnings.

The CFD product intervention order is the ASIC Corporations (Product Intervention Order—Contracts for Difference) Instrument 2020/986, made under subsection 1023D(3) of the Corporations Act 2001. It has applied to retail contracts for difference since March 29, 2021, and CS 64 states that it is due to expire on May 23, 2027. Section 7(2) sets initial margin of at least 3.33% of notional value for a major currency pair, 5% for a major index, a minor currency pair or gold, 10% for a minor index or a commodity other than gold, 50% for a cryptoasset, and 20% for any other underlying. Section 7(3) requires a close-out when net equity falls below 50% of aggregate initial margin, and section 7(5) limits recourse to money and property held for that CFD trading account. Section 6 bans specified inducements from the same date. CS 64, released on October 12, 2026, proposes a further 10 years, until 2037, subject to Ministerial approval.

CS 64 leaves the percentages alone. The draft Instrument 2026/XX would set option-CFD margin at the premium where loss is capped, and otherwise at the underlying's margin. ASIC has not decided if the uncapped product stays. Margin would be per contract, with no long-short netting. Some digital-asset-settled derivatives would come inside if the other limbs hold. Fixed-expiry crypto options and futures would not. Renaming "cryptoasset" as "digital asset" is not the licensing window in ASIC's digital-asset licence applications. A permitted discount would need substantially the same terms, prominent display and a seven-year record. No consultation paper was issued.

How Australia, the UK and the 2018 ESMA measure compare

Sources: ASIC CS 64; Instrument 2020/986; FCA PS19/18; COBS 22.5; COBS 22.6; ESMA, June 1, 2018. Last updated: October 15, 2026.

Retail CFD leverage is not one rule in Australia, the United Kingdom and the European Securities and Markets Authority measure of 2018. Instrument 2020/986 has, since March 29, 2021, required initial margin from 3.33% on a major currency pair to 50% on a cryptoasset, plus a 50% close-out and negative-balance protection. In the FCA handbook, COBS 22.5.11R, dated January 6, 2021, requires 3.33% for a major foreign-exchange pair or relevant sovereign debt, 5% for a major index, minor pair or gold, 10% for a minor index or a non-gold commodity, and 20% for a share or any other asset. That section does not apply to cryptoasset derivatives. COBS 22.6.5R, dated October 8, 2025, prohibits selling, distributing or marketing a cryptoasset derivative to a retail client. ESMA's Article 40 measure applied from August 1, 2018 for three months, with leverage from 30:1 on major pairs to 2:1 on cryptocurrencies. The shared feature is the 50% close-out. The crypto treatment, and the length of the rule, are not shared.

Australia margins a cryptoasset CFD at 50%. COBS 22.6.5R bars the retail marketing, distribution and sale of a cryptoasset derivative. The UK kept a loss warning and prices sovereign debt at 3.33%. Section 6(3)(b) still allows a volume discount offered to every retail client. CS 64 would narrow that exception, not copy the UK ban. ESMA's measure lasted three months. The UK rules date from August 1, 2019. Australia proposes 10 years to 2037. See CFD firms and UK authorisation and Regulation CTX and designated contract markets.

"The evidence demonstrates that ASIC's CFD intervention order has materially reduced retail investor harm by addressing key drivers of harm, like excess leverage."

"Within six months of our current order taking effect, aggregate net losses by retail client accounts fell by 91%."

— Alan Kirkland, Commissioner, Australian Securities and Investments Commission (26-239MR, October 12, 2026)

What the Union Standard orders decide, and what they do not

26-117MR, published on June 12, 2026, is not a case under Instrument 2020/986. Justice Wigney ordered $156.7 million against Union Standard International Group Pty Ltd, $114.1 million against Maxi EFX Global AU Pty Ltd (EuropeFX) and $29.4 million against BrightAU Capital Pty Ltd (TradeFred). The total is $300.2 million, for systemic unconscionable conduct and other contraventions in 2018–2020. Customers of EuropeFX and TradeFred lost more than $83 million. The conduct ends before March 29, 2021, so the orders do not apply section 7.

The licensee point still stands. Union Standard was liable for the representatives it had authorised. The release calls the case the first civil penalty on an entity for failing to ensure services were provided efficiently, honestly and fairly, where CFDs were marketed to customers in China and the firm knew, or ought to have known, of the local-law exposure. The Court added a publicity order, a permanent restraint on EuropeFX, and a refund of net deposits. Proceedings began in December 2020. Liability was found in December 2024. The licence was suspended in July 2020 and cancelled in September 2020.

"EuropeFX's contraventions were unquestionably egregious, deliberate and flagrant. By its conduct, EuropeFX systematically exploited many vulnerable and financially naïve and gullible customers for its own financial gain."

— Justice Wigney, Federal Court of Australia, as quoted in ASIC's media release (26-117MR)

The penalties were stayed until July 13, 2026. An October 7, 2026 note says the EuropeFX stay remains, with a hearing on November 9, 2026. On the order itself, 26-004MR says that from October 2024 to December 2025 more than half of 52 issuers breached it by discounting margin on opposing positions, and nearly $40 million went back to more than 38,000 investors. A December 5, 2025 stop order against FXCM was later revoked. eToro Aus Capital Limited was sued on November 3, 2023 (Report 828). 26-117MR also records a $10 million penalty in March 2026 on Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, for misclassifying retail clients.

What this means for issuers, arrangers and compliance teams

Today's percentages do not move. Section 7(2) is the margin schedule and section 6 is the inducement rule until a new instrument is made. If anti-netting is made, margin is a per-contract sum. A book that nets a long against a short would miss the draft even where each leg met the percentage. The refund of more than $36 million by 28 issuers is the figure ASIC cites. It is remediation, not a statutory cap. Arrangers are inside section 5 as well as issuers. A file that checks only platform terms, and not the benefit offered at account opening, does not match sections 5 and 6.

The discount proposal adds a seven-year record and prominent display. An education tool held back for depositing clients would not qualify. A digital-asset settlement is a definition test, not a new licence: the contract must still be open-ended and terminable by the holder. Fixed-expiry crypto options and futures stay outside. Fund managers are outside section 5 unless they issue or arrange. 26-004MR treated weak target markets as part of the same review, and ASIC has not decided whether an option CFD that can lose more than the premium belongs in a retail target market.

Comments close at 5 pm AEDT on November 9, 2026. CS 64 asks who is affected, what the costs are, what could go wrong, and whether a transition is needed. That is the industry case the paper invites. Average quarterly retail clients in 2023–24 were about 76% below the year before the order, so a 10-year term plus anti-netting plus a seven-year record is heavier than letting the 2022 extension lapse. ASIC's reply is the 68% loss rate and the $458 million. The paper does not tell a firm what to file. Other rulebook notes sit on the regulation desk.

"This pan-EU approach is the most appropriate way to address this major investor protection issue. NCAs will monitor the impact of these measures during their application and will assess, with ESMA, what next steps are required."

— Steven Maijoor, Chair, European Securities and Markets Authority (ESMA product-intervention release, June 1, 2018)

What is still open before May 23, 2027

CS 64 does not decide three things. Without an extension the order is due to expire on May 23, 2027. With Ministerial approval, ASIC proposes that it run until 2037 unless revoked sooner. The amendments, if made, would cover anti-netting, option margin, discount conditions, the seven-year record, education tools and digital-asset settlement. Separately, ASIC has not decided whether option CFDs that can lose more than the premium should still be sold to retail clients. It has asked for client counts and loss data. It has not published a ban.

This is not Consultation Paper 322 or 348. No consultation paper was issued. The 2022 round is Report 724. "2026/XX" is a placeholder, and comments close at 5 pm AEDT on November 9, 2026. The EuropeFX hearing that day is a separate list. ESMA tied its restriction to a three-month clock. ASIC's case for 10 years is certainty plus the 91% fall in early quarterly losses, against a 2023–24 book that was still mostly loss-making. The Minister still has to settle the interval. Until then the order ends on May 23, 2027.

TL;DR

Consultation CS 64, released on October 12, 2026, asks whether the CFD product intervention order should remain until 2037. Instrument 2020/986 has applied to retail contracts for difference since March 29, 2021 and is due to expire on May 23, 2027 unless extended. An extension needs Ministerial approval. The draft would keep the current margin floors, stop netting of long and short positions in the initial-margin sum, tighten the discount and education-tool exceptions, and bring some digital-asset-settled derivatives inside the definition. Fixed-expiry crypto options and futures would stay outside. CS 64 says that in the 2023–24 financial year, 68% of retail clients who traded these products made a net loss and aggregate net losses exceeded $458 million, including $73 million in fees. Comments close at 5 pm AEDT on November 9, 2026.

FAQ

What is the CFD product intervention order?

The CFD product intervention order is Instrument 2020/986, made under subsection 1023D(3) of the Corporations Act 2001. It sets initial margin, a 50% close-out, negative-balance protection and an inducement ban for retail contracts for difference, from March 29, 2021. CS 64 says it is due to expire on May 23, 2027 unless extended. Scope is an off-market contract the holder can terminate, that is not typically held to a fixed date, and that settles in cash or by set-off.

When do comments on CS 64 close?

Comments close at 5 pm AEDT on Monday, November 9, 2026, by email to Market.Intermediaries@asic.gov.au. CS 64 says no consultation paper was issued. It is simple consultation 64, released on October 12, 2026. Media release 26-239MR describes a four-week window. Feedback is not confidential unless the sender asks, for all or part of it. An alias is allowed, but an anonymous sender cannot be contacted if a point needs clarifying. The draft PDF is still numbered 2026/XX.

Does CS 64 change the leverage caps?

No. The floors stay: 3.33% for a major currency pair, 5% for a major index, minor pair or gold, 10% for a minor index or other commodity, 50% for a cryptoasset, and 20% otherwise. Margin would be calculated per CFD, so a long and a short could not be netted. For an option CFD, margin equals the premium where loss is capped, and otherwise follows the underlying. ASIC has not decided if the uncapped version stays on offer.

How does the UK treat cryptoasset derivatives?

It is a ban, not a 50% margin. COBS 22.5.5R excludes cryptoasset derivatives from the retail CFD section. COBS 22.6.5R, dated October 8, 2025, bars selling, distributing or marketing one to a retail client. Australia still allows a cryptoasset CFD if initial margin is at least 50%. CS 64 would pull some digital-asset-settled contracts inside the Australian order. Fixed-expiry crypto options and futures would stay outside.

What did the Court order against Union Standard?

26-117MR, dated in ASIC's newsroom on June 12, 2026, reports Justice Wigney's orders: $156.7 million against Union Standard International Group Pty Ltd, $114.1 million against EuropeFX and $29.4 million against TradeFred, totalling $300.2 million. The conduct was in 2018–2020, before the order took effect on March 29, 2021. Customers lost more than $83 million. An editor's note of October 7, 2026 says the EuropeFX penalty and redress orders are still stayed, with the next hearing on November 9, 2026.

What happens if the order is not extended?

CS 64 and 26-239MR say it is due to expire on May 23, 2027. The as-made notes give it 18 months under subsection 1023G(2). ASIC extended it on April 6, 2022 to May 23, 2027, which 22-082MR records. A further term to 2037 would still need Ministerial approval and could be revoked earlier. ASIC has asked if the amendments need a transition. It has not decided the option-CFD question. Opening the consultation does not make either change.

This article is informational analysis only and does not constitute legal, regulatory, tax, or investment advice. Regulatory frameworks change frequently and interpretation depends on facts and circumstances; primary documents and official regulator guidance always supersede summaries. Firms should consult qualified legal counsel and their relevant supervisory authority before taking any action based on the analysis above.