The Australian Securities and Investments Commission (ASIC) has published findings from surveillance of nine entities offering short-dated exchange-traded options, futures and fractional shares to retail investors. The review identified deficiencies among some providers in target market determinations, onboarding controls and disclosures of the risks and costs of fractional trading. The thematic findings did not apply to every entity reviewed. ASIC found that some onboarding questionnaires were insufficiently tailored to clients and allowed repeated or unlimited attempts to pass. It warned that trading incentives may encourage impulsive decisions, while leverage can cause losses to accumulate within hours or days and fractional shares may involve ownership arrangements that affect investor rights, protections and transferability. Five entities have improved their compliance practices, including two that stopped onboarding options clients while conducting remediation, and one entity has exited the Australian market. ASIC continues to address concerns with some providers and is considering further regulatory or enforcement action. It also published new Moneysmart guidance on exchange-traded options, futures, fractional share trading and micro-investing, while reminding firms to define target markets narrowly, monitor clients throughout the relationship and provide clear risk and cost disclosures.
Australian Securities & Investments Commission2026-08-13
Australian Securities and Investments Commission identifies product governance and disclosure failings in review of nine online investment providers
The Australian Securities and Investments Commission identified target market, onboarding and disclosure shortcomings in a review of nine providers offering complex or high-risk products to retail investors. Five entities have improved their practices, two paused options onboarding for remediation and one exited Australia. ASIC is considering further action and has issued new investor guidance.