The Australian Securities and Investments Commission (ASIC) has proposed expanding existing leverage limits and retail investor protections to include derivatives settled in digital assets. These rules currently apply to contracts for difference (CFDs) settled in cash or through offsetting obligations.
Under the proposal, the regulator intends to cover contracts settled by transferring digital assets, even those tracking non-crypto underlying assets, provided they meet standard CFD criteria. However, certain crypto futures and options with fixed expiration dates will remain excluded from these specific regulations.
The current Australian framework, established in 2021, mandates leverage caps and requires providers to close positions if account funds drop below set levels. It also includes negative balance protection to limit losses to the specific funds held in a client's trading account.
ASIC is currently accepting public feedback on these proposed amendments until November 9. This initiative follows broader regulatory updates in Australia, including new licensing requirements for crypto exchanges and tokenized custody platforms that will take effect on April 9, 2027.
