Australia's securities regulator has proposed extending leverage limits and other retail investor safeguards to derivatives contracts settled in cryptocurrency.
The Australian Securities and Investments Commission (ASIC) announced on Monday that it plans to expand rules governing contracts for difference (CFDs), which allow traders to speculate on price movements without owning the underlying asset. The expansion would cover contracts settled by transferring digital assets, including those tracking non-crypto assets, provided they meet other CFD criteria.
Under the proposal, certain crypto futures and options with fixed expiration dates would remain outside the CFD regulatory framework.
Existing Protections to Extend
Australia's current CFD framework, established in 2021, includes leverage caps and requires providers to close positions when account funds fall below specified thresholds. The rules also feature negative balance protection that limits client losses to the funds available in their trading accounts.
ASIC is accepting public feedback on the proposed changes through November 9.
Broader Regulatory Developments
The proposal comes as Australia continues expanding its crypto regulatory framework. In April, the country passed legislation bringing crypto exchanges and tokenized custody platforms under its financial services licensing requirements, with the new regime set to take effect on April 9, 2027.
ASIC has also required crypto firms currently relying on temporary enforcement relief under existing financial services law to apply for licenses by September 30 or seek modifications to their current licenses.
