ASIC has warned that some online brokers are exposing Australian retail investors to complex and high-risk products without adequate safeguards, following a targeted surveillance of nine entities offering short-dated exchange traded options (ETOs), futures and fractional shares.
The review, conducted between March and June 2026, examined how these products are marketed and sold to retail clients. ASIC found that some brokers were targeting investors with complex or high-risk products without clearly disclosing the associated risks or conducting proper onboarding, leaving clients vulnerable to rapid and substantial losses.
Findings from ASIC’s surveillance
ASIC identified multiple deficiencies across the entities reviewed. Some firms had target market determinations (TMDs) that lacked sufficient detail on how their products met the likely objectives, financial situations and needs of clients. Onboarding processes were also found wanting, including limited tailoring of questions to client circumstances and allowing repeated or unlimited attempts to pass onboarding questionnaires.
The regulator also noted unclear client disclosures that failed to adequately explain the risks and costs associated with fractional trading. According to ASIC Commissioner Simone Constant, products such as short-dated exchange traded options and futures use leverage, which can magnify losses and cause them to accumulate quickly, within hours or days.
Entities reviewed and sector response
The nine entities assessed were Interactive Brokers Australia Pty Ltd, Moomoo Securities Australia Ltd, Sharesies Australia Limited, Stakeshop AFSL Pty Ltd, tastytrade Australia Pty Ltd, Tiger Brokers (AU) Pty Limited, Totality Wealth Limited, Trading 212 AU Pty Ltd, and Webull Securities (Australia) Pty Ltd.
ASIC’s intervention has already driven changes across the sector. Five entities have improved their compliance practices, including two that have stopped onboarding options clients while remediation work is underway. One entity has exited the Australian market following ASIC’s review. The regulator is continuing to address concerns with some entities and is considering further regulatory or enforcement action.
Context of recent enforcement actions
The findings come amid a broader focus by ASIC on high-risk investment products and retail investor protection. In June 2026, ASIC secured more than $300 million in penalties against collapsed CFD issuer Union Standard International Group Pty Ltd (USG) for unconscionable conduct. Earlier, in March 2026, Binance Australia Derivatives was fined $10 million over serious onboarding failures.
The latest surveillance reinforces ASIC’s emphasis on ensuring that firms offering leveraged and complex products to retail investors have robust target market determinations, effective onboarding processes and clear, comprehensive risk disclosures.
