Margin trading is a staple for many Australian investors seeking to amplify their returns. But not all assets can be used as collateral. Enter non-marginable securities—a critical concept that can make or break a leveraged portfolio. In 2025, with fresh regulatory changes and evolving market practices, understanding these securities is more important than ever.
What Are Non-Marginable Securities?
Non-marginable securities are assets that cannot be used as collateral for a margin loan. In practical terms, this means you can’t borrow against them to buy more securities or access additional trading capital. The reasons are varied: some securities are too volatile, illiquid, or simply don’t meet regulatory or broker requirements.
- Examples: Many small-cap shares, certain ETFs, over-the-counter (OTC) securities, and recently listed stocks are commonly classified as non-marginable by Australian brokers.
- Why It Matters: Holding non-marginable assets limits your borrowing power and affects your ability to manage cash flow and leverage within your portfolio.
For instance, if you’re holding shares in a speculative mining startup that recently listed on the ASX, don’t expect to use those shares as margin for additional trades—most brokers will flag them as non-marginable.
2025 Regulatory Updates: Tighter Controls and Transparency
This year, the Australian Securities and Investments Commission (ASIC) has introduced new guidelines for margin lending, reflecting a global trend toward tighter risk controls. Key 2025 updates include:
- Enhanced disclosure requirements for brokers, making it clearer which securities are non-marginable and why.
- Regular reviews of eligible securities lists, with quarterly updates communicated directly to investors.
- Stricter eligibility criteria for marginable assets, particularly targeting sectors with heightened volatility or lower liquidity, such as tech startups and micro-cap stocks.
These measures are designed to protect investors from overleveraging during periods of market stress—especially relevant after the volatility seen in late 2024. For example, several mid-tier brokers have revised their lists, removing crypto-linked ETFs and certain renewable energy shares from margin eligibility following sharp price swings in Q4 2024.
How Non-Marginable Securities Affect Your Portfolio Strategy
Understanding which assets are non-marginable isn’t just a compliance issue—it’s central to managing your risk and liquidity. Here’s how it can impact your approach in 2025:
- Reduced Leverage: If a significant portion of your portfolio is tied up in non-marginable assets, your access to margin loans shrinks. This can limit your ability to capitalise on new opportunities quickly.
- Margin Calls: During market downturns, if your marginable assets fall in value and you’re forced to meet a margin call, you cannot use non-marginable securities to cover the gap. You may have to sell investments or inject cash instead.
- Portfolio Construction: For investors who rely on leverage, balancing between marginable and non-marginable holdings is now a strategic imperative. Many are turning to blue-chip ASX stocks and select ETFs to maintain access to margin while still seeking growth from more speculative plays.
Consider an investor who holds a blend of ASX 200 blue chips and speculative lithium explorers. If lithium stocks are deemed non-marginable after a sector shakeout, their borrowing base shrinks, and their portfolio’s leverage potential drops overnight.
Tips for Navigating Non-Marginable Securities in 2025
- Check Broker Lists Frequently: Most major Australian brokers now provide live updates on which securities are marginable. Stay informed, especially after quarterly reviews.
- Plan for Margin Calls: Hold sufficient marginable assets or cash buffers to avoid forced sales in volatile markets.
- Diversify Smartly: Mix growth-oriented non-marginable assets with stable, marginable holdings to balance opportunity with flexibility.
- Review Loan Terms: Each broker sets its own rules—read the fine print on margin agreements, as eligibility can change rapidly after corporate actions or sector volatility.
Conclusion: Staying Ahead of the Margin Game
In 2025, the rules of margin trading in Australia are evolving fast. Non-marginable securities play a bigger role in shaping risk profiles and access to leverage than many investors realise. By staying informed, regularly reviewing your holdings, and adapting your strategy, you can make the most of opportunities while avoiding unexpected margin calls.
