If you trade from Australia, you may have noticed that locally licensed brokers rarely promote deposit bonuses. A key reason is the ASIC CFD product intervention order. The Australian Securities and Investments Commission (ASIC) used its product intervention power to change how contracts for difference (CFDs) are offered to retail clients, and that includes limits on inducements. This guide explains the idea in plain terms and walks through what to check on an Australian-licensed broker.
Disclosure: FX Bonus Offers may receive compensation from some brokers or partners mentioned on this site. This does not change our editorial assessments.
Risk warning: Trading forex and CFDs on margin carries a high risk of losing money quickly due to leverage. Only trade with money you can afford to lose, and make sure you understand how these products work.
What ASIC does and why it stepped in
ASIC is Australia’s corporate, markets and financial services regulator. It licenses firms that provide financial services, publishes guidance for consumers, and takes action against misconduct. You can read its CFD materials, media releases and register search tools on the ASIC website.
ASIC explains on its website that its product intervention power allows it to act where it sees significant detriment to retail clients. ASIC set out its reasons for using that power on CFDs in its own published documents, so the ASIC website is the best place to read the reasoning in full.
What the ASIC CFD product intervention order covers
According to ASIC’s own summary on the ASIC website, the CFD order applies to CFDs issued to retail clients and brings together several connected protections. In broad terms, these deal with leverage, margin close-out, negative balance protection, inducements and risk warnings.
The exact figures, wording and duration are set by ASIC and can change over time. For that reason, we do not repeat specific numbers or dates here. Check the current version directly with ASIC rather than relying on any summary, including this one.
How the ASIC CFD product intervention treats bonuses
For bonus hunters, the inducement restriction is the part that matters most. ASIC’s published material on the ASIC website describes the kinds of inducements it covers for retail clients. Put simply, the idea is that firms should not use rewards to encourage retail clients to open accounts or trade CFDs.
In practice, it makes sense to look closely at offers like these:
- Deposit bonuses or credit added to your trading balance.
- Cashback or rebates tied to trading volume.
- Loyalty points, prizes or competitions that reward trading.
- Gifts or devices offered for opening or funding an account.
If an Australian-licensed firm offers you something like this as a retail client, ask it in writing how the offer fits ASIC’s order, and compare the answer with ASIC’s own guidance.
Why leverage and bonuses are linked
Leverage decides how large a position you can open compared with your margin. A bonus that adds credit to your balance can make the account look larger than your real money. As a result, it may encourage bigger positions than you would otherwise take.
In our editorial view, that is why the two ideas belong together. Limiting inducements helps keep leverage protections meaningful. It also removes one reason for inexperienced traders to start trading a complex product in the first place.
Retail or wholesale: check how you are classified
ASIC’s CFD order is aimed at retail clients. Some firms invite clients to be treated as wholesale clients instead, and that can change which protections apply to you.
Before agreeing to any change, ask the firm exactly which protections you would lose, and read ASIC’s general guidance on the ASIC website. If a firm pushes you toward a classification you do not genuinely meet, treat that as a serious warning sign.
What to check on an Australian-licensed broker
A licence only helps you if you are dealing with the licensed entity itself. Here is a practical checklist you can work through before you deposit.
- Find the AFS licence number. Look for an Australian financial services (AFS) licence number on the firm’s website and documents.
- Search ASIC’s professional registers. Use the register search on the ASIC website to confirm the licence exists and is current.
- Match names and contact details. Check that the company name, website and contact details on the register match the ones you were given.
- Check whether it is a licensee or a representative. Some firms act as representatives of another licensee. Make sure you know which entity is responsible for your account.
- Read the disclosure documents. Look for the product disclosure documents and any target market information, and consider whether the product is meant for someone in your situation.
- Read any offer terms in full. Look for volume conditions, expiry dates and withdrawal limits.
- Check where complaints go. Find out how the firm handles complaints and where you can escalate one if needed.
For a broader view of how we assess offers, see our section on trusted offers.
A worked example: one offer, two entities
This example is entirely hypothetical. It only shows the questions to ask and does not describe a real firm or a typical outcome.
Imagine a broker group advertises a trading credit to new clients. Its main website mentions an AFS licence. However, when you start the sign-up process, the account agreement names a different company registered overseas. The bonus terms say they apply only to accounts opened with that overseas company.
In this situation, the bonus is not coming from the Australian-licensed entity at all. You would be stepping outside the entity you checked, in exchange for an incentive with conditions attached. Seen that way, the offer looks very different from how the ad presented it.
General scam awareness still applies
Regulatory rules are only one layer of protection. Investor education resources, such as the US SEC’s Investor.gov, explain common fraud warning signs that apply anywhere: pressure to act fast, promises that sound too good to be true, and requests to move money to unfamiliar accounts. In our view, those warning signs are worth keeping in mind alongside any licence check.
Questions to ask before you accept any offer
If an offer still interests you after these checks, ask the firm a few direct questions in writing. Keeping the answers gives you a record to refer back to.
- Which legal entity will hold my account, and what is its licence number?
- Am I being treated as a retail or wholesale client?
- What conditions must I meet before I can withdraw my own funds?
- How does this offer fit the ASIC rules that apply to retail clients?
Clear, consistent answers are a good sign. On the other hand, vague or pressured replies are a reason to walk away.
Frequently asked questions
Does the ASIC CFD product intervention ban all bonuses?
The order restricts inducements offered to retail clients in connection with CFDs. Its exact scope is set out by ASIC, so read ASIC’s material for the details rather than relying on a firm’s interpretation.
Is the order still in force?
Check the current status on the ASIC website before relying on any summary, because regulatory instruments can be extended, amended or replaced.
What if an overseas broker offers me a bonus?
A firm that is not licensed in Australia may not be covered by the protections you expect. That also means you may have far less recourse if something goes wrong.
The bottom line
The ASIC CFD product intervention aims to reduce harm to retail CFD clients, and limiting inducements is a central part of that. So when a bonus appears, treat it as a prompt to check who is offering it, which entity you would contract with, and how you are classified. A few minutes on the ASIC register can save you from an offer that costs far more than it gives.
This article is for educational purposes only and is not financial, investment or legal advice. Rules differ by country and change over time — check the current rules with the relevant regulator and consider speaking to a licensed financial adviser.
