Consultation on binary options prohibition closes today in Manitoba and Saskatchewan

Maria Nikolova

In Quebec and Alberta, where the consultation closed a month ago, there is still no clarity on whether the ban will be implemented as a law.

The comment period for a proposed ban on all sorts of marketing and offering of binary options to individuals expires today in two Canadian provinces – Manitoba and Saskatchewan.

Under the proposals, outlined in April by the Canadian Securities Administrators (CSA), an organization which has among its members the securities regulators from 10 Canadian provinces and 3 territories, all advertising, offering, selling or otherwise trading a binary option with or to an individual will be prohibited.

There is still no clarity whether the proposed ban will get into effect, as the securities regulators in Quebec and Alberta, where the consultation on the ban closed a month ago, have not published any statements on the progress of this proposal’s implementation. However, Quebec’s financial regulator AMF has made public a set of comments on the proposal, including ones from the Investment Industry Association of Canada (IIAC) and North American Derivatives Exchange, Inc. (Nadex).

The IIAC, which represents 130 Dealer Member firms regulated by the Investment Industry Regulatory Organization of Canada (IIROC), insists that the ban must apply only to illegal binary options trading offered by unregulated binary options firms. According to the IIAC, its members should be allowed to offer binary options to retail investors.

Nadex, in its turn, said the ban should apply to so-called fifty/fifties which have commonly become identified with the term “binary option” but these should be considered not as an option but as a financial instrument with the characteristics of a fixed odds bet. The Exchange argues that the offering of volatility binaries, like vanilla put and call options or other legitimate financial instruments, should be allowed if the offeror is regulated and applicable requirements (client onboarding, risk disclosure, etc) are met.

While the ban is in the works, Canadian residents continue to lose money due to binary options. Data from the Manitoba Securities Commission (MSC), released on April 26, 2017, shows the body has received 17 reports from binary options scam victims over the last four months. In April this year, a man from Portage La Prairie said he had been defrauded of $130,000 to an offshore binary options firm, whereas a Southern Manitoba man had lost more than $300,000 for similar reasons.

The regulator notes that in 2015, there were four complaints from Manitobans about unregistered binary options firms, whereas in 2016, that number spiked to more than 58.

Read this next

Industry News

Playtech to close Finalto sale to Gopher in two weeks

Playtech, the London-listed gambling software developer, today said it expects to close the divesting of its financial trading division Finalto by mid July 2022.

Retail FX

eToro valuation halved as SPAC merger deadline expires

The deadline for the completion of the SPAC merger of eToro had passed yesterday, June 30, and the Israeli broker apparently canceled the deal with Betsy Cohen-backed blank-check firm.

Institutional FX

FXSpotStream reports second best figure for monthly volumes

Trading volumes on institutional FX platforms surged in June after fears over the impact of Russia’s military invasion of Ukraine sent speculative asset classes reeling.

Retail FX

Vantage expands MT5 offering with access to new stocks

ASIC-regulated foreign exchange brokerage Vantage has expanded its service offering and trading products by incorporating new markets, namely 14 exchange-based stocks on MetaTrader 5.

Digital Assets

CFTC charges $1.7 billion Bitcoin scam, largest to date

Mirror Trading accepted at least 29,421 Bitcoin from approximately 23,000 investors from the United States and even more throughout the world.

Retail FX

Spotware Systems upgrades cTrader Desktop to version 4.3

Spotware Systems, a technology provider for the electronic trading industry, has launched an updated version of its cTrader Desktop, which adds new functionality to join a roster of advanced trading capabilities.

Digital Assets

OKX launches Block Trading for tighter pricing

With Block Trading, users can integrate spot and derivatives trades on the same platform and trade multiple currencies in a single trade. The service supports trading of perpetual swap, futures, and option contracts with popular altcoins as the underlying.

Industry News

Interactive Brokers pays $1 million to settle with CFTC

Interactive Brokers overcharged its customers a total of $710,828.14.

Metaverse Gaming NFT

DappRadar launches cross-chain token staking

The launch of the cross-chain token staking mechanism by DappRadar comes under a partnership with LayerZero protocol, which enables smart contracts to communicate across different chains.

<