Worthless Securities in Australia: 2025 Investor Guide

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:

• Shares in companies that have gone into liquidation (think of the aftermath of the Prospa collapse in 2024)
• Bonds issued by entities that have defaulted and have no assets left for creditors
• 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:

• 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.
• 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.
• 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:

• 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.
• Repeated Failure to Lodge Financials: Companies that fail to submit audited accounts or respond to ASX price queries are at higher risk.
• Administration and Liquidation Notices: Watch for official statements about voluntary administration, creditors’ meetings, or winding-up applications.
• 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:

• Sticking with listed securities that have robust liquidity and regular trading
• Monitoring company announcements and financial statements
• Reviewing your portfolio every quarter for dormant or suspended holdings
• 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.