ASIC has conducted a review of multiple online trading platforms and identified several issues for Australian investors. (Getty Images: Yuichiro Chino)
A review by corporate watchdog ASIC finds retail investors are being offered incentives to engage in "high-risk" investments on online platforms.
Clients have been offered fee-free or discounted trading, or allowed to attempt sign-up questionnaires an "unlimited" amount of times.
ASIC is considering taking further action against some entities in relation to matters raised by the review.
Retail investors are allegedly being offered cash vouchers and airline reward points as encouragement to use online platforms for their financial trade, a corporate watchdog has found.
Nine online trading platforms were reviewed by the Australian Securities and Investments Commission (ASIC), including Moomoo, Sharesies and Webull.
Their review found some providers were offering fee-free or discounted trading and other incentives to engage in "high-risk" investments.
ASIC did not attribute individual findings to any one company and said not every company had committed every infraction.
ASIC commissioner Simone Constant said trading platforms were increasingly offering complex financial instruments to users who did not fully understand them.
"These are products where it can be hard to understand, but unfortunately easy to lose money, and easy to lose [it] quickly," she said.
"Take a short-dated exchange trading option. You can put a little bit of money in there, a small amount of money in a small window of time.
"These are not just high complexity, but of course high-risk products."
Since the review, two of the companies have stopped onboarding new clients while remediation is underway, and five more have improved compliance practices.
One has exited the Australian market entirely.
ASIC said it was considering further regulatory and enforcement action in relation to matters identified in the review.
