The Australian Securities & Investments Commission is taking a closer look at derivatives.
Radio New Zealand's Sydney correspondent says Australian investors have developed a taste in recent years for complex derivative products.
These are securities like options and futures based on an underlying asset.
But after the global financial crisis, regulators are paying much closer attention to the things which Warren Buffet once described as weapons of mass wealth destruction.
New ASIC boss Greg Medcraft says he's making it a priority to improve disclosure around products such as contracts for difference, capital guaranteed instruments and synthetic exchange traded funds.
One major stockbroking firm has already been rapped over the knuckles for not revealing to retail clients the full risk of derivatives.
