The Canadian Securities Administrators (CSA) announced Sept. 28 a ban on binary options. They are implementing Multilateral Instrument 91-102 Prohibition of Binary Options, which makes it illegal to advertise, offer, sell or trade binary options shorter than 30 days.
"Binary options are the leading type of investment fraud facing Canadians today, and the impact of this kind of scam on individuals is staggering," said Louis Morisset, chair of the CSA, and president and chief executive officer of the Quebec regulator Autorité des marchés financiers. "This ban positions the CSA among the world leaders in fighting back against binary options fraud and represents an important step in protecting Canadians. It conveys a clear message that these products are unsuitable for individuals because of their risky characteristics and that their trading is illegal."
Protecting Canadians from fraud
"From day one, our job has been to find every avenue to protect Canadians from this particular fraud," said Jason Roy, chair of the CSA’s Binary Options Task Force and senior investigator of the Manitoba Securities Commission. The Task Force was created in 2016 to fight binary options.
"This ban supports our efforts, which include working with credit card companies, tech companies and advertisers that binary options fraudsters rely on to carry out their schemes,” says Roy. “It will all add up to fewer Canadians being exposed, and fewer Canadians being cheated."
Takes the form of a wager
Binary options take the form of a wager in which investors bet on the performance of an underlying asset, often a currency, commodity, stock index, or share. The timeframe on this bet is typically very short, sometimes hours or even minutes. When the time is up, the investor either receives a predetermined payout or loses the entire amount. “In many instances, however, no actual trading occurs and the transaction takes place for the sole purpose of stealing money,” says the CSA.
For more information on binary options fraud, visit www.binaryoptionsfraud.ca.