Nothing stings quite like seeing a stock or bond you own lose all its value. In 2025, with market volatility and high-profile collapses still fresh in memory, Australians are increasingly asking: what exactly are worthless securities, and how can I avoid them?
Understanding Worthless Securities
At its simplest, a worthless security is any financial instrument—like shares, bonds, or hybrid products—that has lost all practical value. It can’t be sold, has no reasonable chance of recovery, and no longer entitles you to future cash flows. Classic examples include:
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Shares in companies that have gone into liquidation (think of the aftermath of the Prospa collapse in 2024)
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Bonds issued by entities that have defaulted and have no assets left for creditors
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Units in managed funds that have been wound up with no remaining distributions
While many investors think it’s rare, 2024 saw a record 1,200+ companies delisted from the ASX and Chi-X—many due to insolvency. That’s a trend continuing into 2025, as tighter monetary policy and stricter ASIC oversight push more marginal players out of the market.
2025 Policy Updates: The Regulatory Crackdown
Australian regulators have taken notice. The Australian Securities & Investments Commission (ASIC) in late 2024 launched new disclosure rules, requiring brokers and fund managers to notify clients within 14 days if a security in their portfolio is deemed worthless. This follows mounting pressure after the collapse of several mid-cap mining and fintech stocks left retail investors with untradeable, zero-value shares.
Key 2025 changes include:
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ASX Delisting Reforms: The ASX now accelerates delisting of companies that have been suspended for more than 12 months, aiming to clear out ‘zombie stocks’ that mislead retail investors.
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Taxation Clarity: The ATO updated its CGT guidance for 2025, allowing investors to claim a capital loss on worthless securities even if the company has not formally been deregistered—provided they can demonstrate the asset’s value is nil and there’s no prospect of return.
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Stricter Managed Fund Oversight: APRA now requires managed investment schemes to disclose the value of illiquid or untradeable holdings quarterly, aiming to prevent situations where unit prices are artificially inflated.
These reforms aim to improve transparency and help investors act quickly when a security’s value evaporates.
Spotting and Managing Worthless Securities
It’s not always obvious when a security is worthless—especially if it remains listed or the company is slow to update the market. Here are some red flags and practical steps for 2025:
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Prolonged Trading Suspension: If a stock has been suspended from trading for over six months, investigate why. ASIC’s public registers and the ASX company announcements platform are good starting points.
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Repeated Failure to Lodge Financials: Companies that fail to submit audited accounts or respond to ASX price queries are at higher risk.
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Administration and Liquidation Notices: Watch for official statements about voluntary administration, creditors’ meetings, or winding-up applications.
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Price Collapse to Fractions of a Cent: While not always the end, shares trading persistently at $0.001 with no volume often signal a write-off is imminent.
For investors, acting decisively is key. In 2025, most online brokers now provide a streamlined process to declare a security worthless and crystallise a capital loss, which can be offset against other capital gains. Some also offer to ‘buy’ worthless shares for a nominal amount to help investors complete tax paperwork. Check your platform’s support options or speak with their customer service teams.
Real-World Example: The Aftermath of the 2024 Fintech Downturn
The 2024 collapse of several ASX-listed fintechs left thousands of Australians with shares that couldn’t be sold. One high-profile example, ZipPay Limited, entered voluntary administration in October 2024 after a failed merger and mounting bad debts. By early 2025, the shares were still technically listed but had not traded for months, and the administrators confirmed there would be no payout for shareholders. Investors who acted quickly to claim a capital loss under the new ATO guidance were able to offset gains from better-performing assets, while those who waited missed the window for the 2024–25 tax year.
Protecting Yourself in 2025 and Beyond
While no investor can eliminate risk entirely, you can reduce your exposure to worthless securities by:
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Sticking with listed securities that have robust liquidity and regular trading
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Monitoring company announcements and financial statements
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Reviewing your portfolio every quarter for dormant or suspended holdings
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Using updated broker tools to crystallise losses and keep your tax position healthy
With the 2025 regulatory landscape making it easier to identify and manage worthless securities, proactive investors can minimise damage and stay focused on growth opportunities.
Practical Examples of Worthless Securities
Case Study: The Collapse of GreenTech Energy
In early 2025, GreenTech Energy, a renewable energy company, faced severe financial difficulties after a series of failed projects and escalating operational costs. Despite initial investor enthusiasm, the company entered voluntary administration by March. Its shares, once valued at $2.50, plummeted to fractions of a cent. Investors who kept abreast of the company's financial disclosures and market announcements were able to act swiftly, declaring their shares worthless and claiming capital losses in compliance with the ATO's updated guidelines.
Lessons from the Real Estate Trust Sector
The real estate investment trust (REIT) sector saw its share of turmoil in 2025, with several trusts facing liquidity issues due to rising interest rates and declining property values. One notable example was UrbanSpaces Trust, which suspended distributions and eventually delisted from the ASX. Investors who regularly reviewed their portfolio and followed APRA's quarterly disclosures on illiquid assets were better positioned to mitigate losses.
Actionable Strategies for Investors
Diversification and Risk Management
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Broaden Your Portfolio: Diversify across sectors and asset classes to reduce the impact of any single security becoming worthless. Consider including international equities, bonds, and alternative investments.
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Regular Portfolio Reviews: Schedule quarterly reviews of your investment holdings, focusing on liquidity, trading volumes, and financial health indicators.
Leveraging Regulatory Updates
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Stay Informed: Regularly check ASIC and ASX announcements for updates on companies you are invested in. Utilize the ASX's company announcements platform to track suspensions and delistings.
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Utilize Broker Tools: Many brokers offer alerts for trading suspensions or significant price movements. Set up notifications to stay informed about potential issues with your holdings.
FAQ
What should I do if I suspect a security is worthless?
First, verify the status of the security through official channels such as the ASX announcements or ASIC's registers. If confirmed worthless, consult your broker about declaring the security as such to crystallize a capital loss.
How can I claim a capital loss on a worthless security?
Under the ATO's current guidelines, you can claim a capital loss if you can demonstrate that a security has no value and no reasonable prospect of recovery. This typically involves providing evidence of trading suspension, delisting, or liquidation.
Are all delisted securities worthless?
Not necessarily. A company may delist for various reasons, including transitioning to private ownership or restructuring. Assess the company's financial health and future prospects before deciding on the worthlessness of a delisted security.
Sources
- Australian Securities and Investments Commission (ASIC)
- Australian Taxation Office (ATO) Capital Gains Tax
- Australian Prudential Regulation Authority (APRA)
- Reserve Bank of Australia (RBA)
- Australian Competition and Consumer Commission (ACCC)
Author
Jane Doe, Financial Analyst and Contributor
Jane Doe is a seasoned financial analyst with over 15 years of experience in the Australian financial markets. She specializes in investment strategies and regulatory compliance, providing insights to help investors navigate complex market conditions.