Despite ban, binary options brokers continue to target Quebec investors
Pushy representatives of binary options brokers approach potential clients via phone, which adds to aggressive social media marketing campaigns of binaries.
Months after the ban on offering and marketing of binary options in Canada came into effect, there are businesses that continue to target Canadian investors. The admission was made late last week by the financial markets authority (AMF) of Quebec.
In the face of the ban and the numerous warnings published by the regulator, it has continued to receive signals and enquiries about binary options from the public, says Jean-François Fortin, Executive Director, Enforcement, AMF. He adds that some people have been approached via their phone – a practice that is even more aggressive than the social media campaigns run by many of these platforms.
The regulator adds four names to the “black list” of investment companies that are unauthorized to offer their investment services in Quebec but nevertheless do so. These are:
- www.1sttradeoptions.com
- www.finance-trades.com
- www.harborx.com
- www.hqbroker.com
The last entity appears to be particularly active in Quebec, the regulator warns.
Let’s recall that last year, Canada introduced instrument 91-102 which imposed a ban covering all sorts of “binary options”. It applies to binary options, regardless of the specific name. This means that the prohibition covers (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. The rules made it illegal to advertise, offer, sell or otherwise trade binary options shorter than 30 days with any individual.
There has been some critical feedback as to the proposal. The Investment Industry Association of Canada (IIAC), which represents 130 Dealer Member firms regulated by the Investment Industry Regulatory Organization of Canada (IIROC), has insisted 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.
There have also been calls to allow trading binary options on-exchange, as this is allowed in the United States.
On the other side of the spectrum of opinions is the feedback by organizations like the Canadian Advocacy Council for Canadian CFA Institute Societies (the CAC), which has backed the binary options ban proposal and even went beyond it by questioning the status of OTC Forex.
