ASIC — Australian Securities and Investments Commission
Australian corporate and markets regulator since 1998; CFD intervention order since 2021
- Max retail leverage
- 1:30
- Compensation limit
- Not applicable
- Negative balance protection
- Required
About the ASIC
The Australian Securities and Investments Commission was created in 1998 as the successor to the Australian Securities Commission, taking on consumer protection in financial services alongside its corporate registry role. Any firm offering forex or CFDs to Australian clients must hold an Australian Financial Services licence with authorisations that specifically cover derivatives and foreign exchange contracts, and must meet net tangible asset requirements calibrated to the size of its business. Licence conditions, responsible manager arrangements and audited financial reporting are the main prudential levers, and ASIC publishes bans and enforcement outcomes against individuals as well as firms.
Australia was for years a high-leverage jurisdiction, and that changed with the product intervention order that took effect on 29 March 2021 and has since been extended. Retail CFD leverage is capped at 1:30 for major currency pairs, 1:20 for minors, gold and major indices, 1:10 for other commodities and minor indices, 1:5 for shares and 1:2 for crypto assets. The order also mandates a 50 percent margin close-out per account, requires negative balance protection and prohibits inducements such as deposit bonuses and referral rewards for opening retail accounts.
Client money reforms passed in 2017 and effective from 2018 stopped derivative issuers from using retail client money to fund their own hedging or working capital, a practice that had contributed to earlier failures. Money must sit in a designated client account with an Australian authorised deposit-taking institution. Australia has no statutory compensation fund for the failure of a CFD issuer, so segregation is the practical protection. Complaints that the licensee will not resolve internally can be taken free of charge to the Australian Financial Complaints Authority, whose determinations bind the firm up to published monetary limits.
Why we rate it tier 1
Binding leverage caps, mandatory negative balance protection, a 50 percent margin close-out rule and reformed client money rules sit alongside a free binding external complaints body in AFCA. The absence of a statutory compensation fund for broker failure is the one real gap.
High minimum capital, enforced conduct rules, a public register that is genuinely policed, and an independent complaints or compensation route that pays out when a firm fails. These are the licences worth paying a wider spread for.
ASIC protections at a glance
| Full name | Australian Securities and Investments Commission |
|---|---|
| Jurisdiction | Australia |
| Region | Asia-Pacific |
| Established | 1998 |
| Maximum retail leverage | 1:30 |
| Leverage regime | A product intervention order in force since 29 March 2021 caps retail CFD leverage at 1:30 for major currency pairs, with tighter limits on indices, commodities, shares and crypto assets. |
| Investor compensation scheme | None |
| Compensation limit | Not applicable |
| Negative balance protection | Required — The product intervention order requires licensees to provide negative balance protection to retail clients on a per-account basis. |
| Client-fund segregation | Client money must be held in a designated client money account with an Australian authorised deposit-taking institution and is subject to the Corporations Act client money rules, which since 2018 have barred derivative issuers from using retail client money for their own working capital or hedging. |
| Complaints route | Raise an internal dispute resolution complaint with the licensee, which must respond within the prescribed timeframe. Unresolved complaints go to the Australian Financial Complaints Authority, a free external scheme whose determinations bind the firm. |
| Public register | AFS Licensee Register on ASIC Connect (connectonline.asic.gov.au) |
What to check on the AFS Licensee Register on ASIC Connect
- 1Search the firm name or AFS licence number on connectonline.asic.gov.au using the professional registers search.
- 2Confirm the licence status is current and check the start date and any conditions.
- 3Read the authorisations to see that derivatives and foreign exchange contracts are covered for retail clients.
- 4Check whether the entity you are depositing with is the licensee itself or an offshore affiliate using a similar name.
- 5Search the ASIC banned and disqualified register for the firm and its named responsible managers.
Register: connectonline.asic.gov.au. Always navigate to the register from the regulator's own domain rather than a link supplied by the broker.
Brokers on PipDig regulated by the ASIC
None of the brokers currently reviewed on PipDig hold a ASIC licence. That is not a mark against the authority — our review coverage follows where readers actually open accounts, and it changes as we test more firms.
ASIC FAQ
Is my money protected if an ASIC broker collapses?
There is no government compensation fund for the failure of a CFD issuer in Australia. Your protection is the client money regime, which requires retail funds to be held in a designated account at an Australian bank and prevents the issuer using them for its own hedging or working capital. In an insolvency you rank as a client money claimant, not a guaranteed payout.
Why did Australian leverage drop to 1:30?
ASIC used its product intervention power after finding that retail clients lost substantial sums on high-leverage CFDs. The order took effect on 29 March 2021 and caps major currency pairs at 1:30, with lower limits on other asset classes. It also requires 50 percent margin close-out, negative balance protection and a ban on deposit bonuses for retail clients.
Does an ASIC licence cover me if I trade with the offshore branch?
Usually not. Several groups run an Australian licensed entity alongside offshore entities in jurisdictions with lighter rules. If your account agreement names a non-Australian entity, ASIC rules, the leverage caps and AFCA access generally do not apply. Check which legal entity appears on your client agreement before funding an account.