Australia’s securities regulator is proposing to expand leverage limits and other retail investor protections to certain crypto-settled derivatives. On Monday, the Australian Securities and Investments Commission (ASIC) announced plans to extend the rules for contracts for difference (CFDs), which allow traders to speculate on price movements without owning the underlying asset. The existing rules apply to contracts settled in cash or by offsetting obligations, but ASIC aims to include those settled by transferring digital assets, including contracts tracking non-crypto assets.
ASIC clarified that certain crypto futures and options with fixed expiration dates would remain outside the CFD rules. Australia’s current framework, established in 2021, includes leverage caps and requirements for providers to close positions when account funds fall below specified levels. Negative balance protection also ensures that losses do not exceed the funds in a client’s CFD trading account.
The regulator is seeking public feedback on the proposed changes until November 9. Separately, Australia passed legislation in April to regulate crypto exchanges and tokenized custody platforms under its financial services licensing framework, with the new rules taking effect in April 2027. ASIC also required crypto firms relying on temporary enforcement relief to apply for licenses by September 30 or modify their existing licenses.