ASIC Warns Retail Investors on Risky Products Sold by Online Brokers

ASIC published surveillance findings (26-193MR) covering nine online brokers — including Interactive Brokers Australia, Moomoo, Tiger Brokers and Webull — finding that short-dated exchange traded options, futures contracts and fractional shares were being distributed to retail investors with deficient target market determinations and inadequate onboarding checks. Five entities improved their compliance practices, two paused options onboarding during remediation, and one exited the Australian market; ASIC's Moneysmart also released new investor education pages on these products.

• Surveillance of nine online brokers found deficient target market determinations for short-dated ETOs, futures and fractional shares
• Onboarding processes found inadequate, including unlimited quiz attempts and limited client risk assessment
• Unclear disclosures identified around fractional trading risk and underlying ownership structure
• Five entities improved compliance, two halted options onboarding during remediation, one exited the Australian market
• Moneysmart released four new webpages educating retail investors on leveraged/complex product risks