Canadian Securities Administrators propose prohibition of binary options

Maria Nikolova

The proposed rules will explicitly prohibit advertising, offering, selling or otherwise trading a binary option to an individual.

Canadian regulators have made a radical move concerning binary options: today the Canadian Securities Administrators (CSA), an organization which has amid its members the securities regulators from 10 Canadian provinces and 3 territories, has published a proposal to prohibit binary options.

The proposed instrument 91-102 aims to protect investors from becoming victims of binary options fraud and from becoming victims of the illegal promotion of what the CSA sees as an extremely high-risk product. Let’s note that the Proposed Instrument outlines a rather wide definition of “binary option”. The ban will apply to binary options, regardless of the specific name. This means that the prohibition will cover (list is not exhaustive) “all-or-nothing options”, “asset-or-nothing options”, “bet options”, “cash-or-nothing options”, “digital options”, “fixed-return options” and “one- touch options”.

The Proposed Instrument prohibits advertising, offering, selling or otherwise trading a binary option with or to an individual. To prevent avoidance of the prohibition by having a client create a corporation or other type of entity to trade binary options, the Proposed Instrument also prohibits advertising, offering, selling or otherwise trading a binary option with or to or any other person or company that is created, or is primarily used, to trade a binary option.

Importantly, the CSA notes that non-fraudulent binary options pose significant risks to individuals too.

What about Quebec? As FinanceFeeds has already informed its readers, in February this year, Quebec’s securities regulator AMF proposed a binary options ban. The Proposed Instrument is in line with that set out in the AMF Proposal, the CSA said. The AMF is now considering withdrawing the AMF Proposal and instead recommending the adoption of the Proposed Instrument. We are curious to see whether the CSA proposal triggers the same opposition as the AMF proposal.

The Proposed Instrument is now open for comments. The public comment period expires:

  • May 29, 2017 in Alberta and Quebec,
  • June 28, 2017 in Manitoba and Saskatchewan,
  • and July 28, 2017 in all other CSA Participating Jurisdictions.

Read this next

Digital Assets

USDC sees massive $10.4 billion outflows in March

Cryptocurrency traders have withdrawn more than $10 billion from the world’s second largest stablecoin, USDC, in less than three weeks even as concerns over the fallout from the Silicon Valley collapse have receded.


OSTTRA’s Joanna Davies goes beyond 30-30-30 data standard at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Joanna Davies about OSTTRA.


CloudMargin’s Stuart Connolly on how to manage collateral amid high rates at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Stuart Connolly about CloudMargin’s SaaS platform, said to be the only cloud-native collateral and margin management system in the industry, at a time of stress due to rising interest rates.


Baton Systems’ Alex Knight on solving post-trade with DLT at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Alex Knight about Baton Systems’ about rising settlement fails, collateral management, and the profile of DLT beyond cryptocurrencies.

Industry News

Wise claims 92% of banks hide or inflate FX fees despite Cross-Border Payments Regulation 2

“Banks continue to exploit loopholes in EU regulation to mislead their customers and overcharge them through fees hidden in inflated exchange rates.”

Industry News

Goliath Partners opens Miami headquarters to recruit C++ developers for fintech and trading

I’m extremely excited to be pursuing this venture and having the backing of such knowledgeable entrepreneurs who have seen success time and time again. We’ve already made brilliant headway working with leading investment houses and trading exchanges. It’s just the start, but we’re already making a huge difference with our work.”

Industry News

IOSCO calls for cooperation against cross-border scams, greenwashing, misconduct, and fraud

“Regulators need effective resources, practices, tools, and techniques to promote consumer protection and market integrity, which is supported through participation in critical multilateral forums such as IOSCO.”

Institutional FX

Archax rolls out tokenization engine as LawtechUK confirms legal standing of tokens

“As the UK’s first FCA regulated digital securities exchange, we are now building on this to pave the way to make traditional assets interoperate with Web 3.0.”


Broadridge migrates bond e-trading platform LTX to AWS

“LTX is committed to offering innovative e-trading technology that facilitates transparency and liquidity discovery. By migrating to AWS, LTX can leverage the scalability of the cloud to continue to deliver enhanced data and execution capabilities to our clients.”