ASIC Warns Retail Investors Over Risky Products Sold by Online Brokers | LeapRate
Australia’s corporate regulator has issued a fresh warning to retail investors after a review found online brokers are selling complex, high-risk products without properly explaining the dangers involved.
The Australian Securities and Investments Commission (ASIC) examined nine brokers offering short-dated exchange traded options, futures, and fractional shares to everyday investors between March and June 2026.
The review found several firms failed to clearly disclose risks or run proper checks on whether customers understood what they were buying.
ASIC said some brokers used incentives such as fee-free trades, cash vouchers, and airline reward points to attract new customers to these products.
ASIC Commissioner Simone Constant said sign-up perks can distract investors from real risks and encourage impulsive decisions. She noted that leveraged products like short-dated options and futures can generate losses within hours, while fractional shares can carry unclear ownership rights that affect investor protections.
The regulator found some brokers had weak processes for checking whether products suited their customers, including onboarding questionnaires that allowed unlimited attempts until a client passed.
Following the review, five brokers have already improved their compliance practices, with two pausing new options clients while fixing issues. One firm has left the Australian market entirely. ASIC said it is still working with other firms and may take further regulatory action.
Separately, ASIC’s Moneysmart platform has published new educational pages explaining exchange-traded options, futures, fractional shares, and micro-investing, urging investors to understand a product fully, know where their money is held, and only invest what they can afford to lose before trading.
