Australian regulators’ review of the distribution practices of issuers of risky contracts for difference (CFDs) found widespread compliance failures.
In a report detailing the results of a sweeping review of the CFD sector, which took place between October 2024 and December 2025, the Australian Securities and Investments Commission (ASIC) said it found pervasive shortcomings in firms’ compliance with their regulatory obligations, including poor investor screening, misleading disclosure, a lack of ongoing monitoring of clients’ results and deficient trade reporting.
The latest review followed long-standing concerns about investor protection when trading in CFDs, and previous efforts by the regulator to review the sector and enhance investor outcomes.
Despite these efforts, in fiscal 2024, 68% of retail investors that traded CFDs lost money, according to the ASIC — amounting to an estimated A$458 million (including A$73 million in fees).
As part of its most recent compliance exercise, the ASIC also reported that it has taken action that resulted in nearly A$40 million being returned to retail investors, and to firms undertaking various compliance improvements, including enhancements to disclosure, onboarding practices, client supervision and transaction reporting.
“Each year, thousands of Australians lose money trading CFDs and through our review we have helped put $40 million back in the pockets of more than 38,000 investors,” said ASIC commissioner, Simone Constant, in a release accompanying the report.
“While the CFD industry has made important changes, there’s still work to do,” she added. “Issuers must continually monitor, adapt and strengthen their compliance practices, and we urge Australians to pay close attention to what they are being offered.”
“ASIC will continue to act decisively, and where appropriate, will take further action to address misconduct and reduce consumer harm,” she said.