Two regulators, two hemispheres and a rulebook that now looks remarkably similar. Here is where they match and where they still differ.
For years, Australia was seen as the more permissive home for retail CFD trading, with leverage far above what European and British traders could access. That changed in March 2021, when ASIC’s product intervention order came into force. Since then, the rules facing a retail trader in Sydney and one in London have been closer than many people realise.
Leverage: almost identical
Both the FCA in the UK and ASIC in Australia cap leverage for retail clients at 30:1 on major currency pairs, 20:1 on minor pairs, gold and major indices, 10:1 on other commodities and 5:1 on individual shares. Both require a margin close-out when funds fall to 50 percent of the required margin, both mandate negative balance protection so a retail client cannot lose more than the money in the account, and both ban brokers from offering trading inducements such as bonuses.
Crypto: the clearest difference
The UK banned the sale of crypto derivatives, including crypto CFDs, to retail clients in January 2021. Australia did not go that far. ASIC allows crypto CFDs for retail clients but caps leverage at 2:1. A UK retail trader who wants crypto exposure has to hold the asset itself, while an Australian trader can still use a CFD, albeit with very little leverage.
Spread betting: a UK peculiarity
The other major difference is a product, not a rule. Spread betting is offered in the UK and Ireland and is essentially unavailable in Australia. It works much like a CFD, but because it is treated as betting, profits are generally free of Capital Gains Tax for most UK individuals. That tax treatment is the main reason so many British traders use spread betting platforms rather than CFDs for short-term trading. Australian traders have no direct equivalent, and CFD profits there are generally taxable, so local tax advice matters.
Risk warnings and disclosure
UK providers must display a standardised warning stating the percentage of their retail client accounts that lose money. Those figures are published prominently and typically sit well above two thirds. It is one of the most useful numbers a new trader can look at, because it comes from the broker’s own client data.
Professional status works the same way
In both countries, the leverage caps apply to retail clients only. Traders who meet strict tests on experience, trading activity or wealth can apply to be classified as professional or wholesale clients and access higher leverage, at the cost of losing retail protections such as negative balance protection. For most people that trade is not worth making.
What it means when choosing a broker
Because the headline rules are now so alike, the meaningful differences between brokers in either country are practical ones: spreads on the markets you actually trade, overnight financing, execution quality and how quickly withdrawals are paid. Many of the large brands operate separate regulated entities in both countries, so a comparison of the best forex brokers in the UK will look familiar to an Australian reader, even though the legal entity and client protections differ.
The bottom line
The days of choosing a jurisdiction for its leverage are over for retail traders. What remains is a choice between well-regulated providers on cost, service and product range, and in the UK, the extra question of whether spread betting suits your tax position. CFDs remain high-risk products in both countries, and the majority of retail accounts lose money. This article is general information only and is not financial or tax advice.
