ASIC's recent surveillance program identified "serious and widespread compliance failures" in the retail over-the-counter derivatives industry. The corporate regulator said it "considers retail OTC derivatives to be complex, high-risk products which are often difficult to understand, even for experienced investors". Over 70 per cent of AFS licensees were reviewed by ASIC, and most failed three or more of the seven compliance risks. The list includes failure to comply with net tangible assets requirements, client money provisions and financial reporting obligations; failure to supervise authorised representatives; and poor, misleading or deceptive product disclosure statements.