No surprises! IIAC opposes Canada’s plans to ban binary options (again)

Maria Nikolova

The industry does not seem ready to give up on binary options in the face of the rise in binary options fraud in Canada.

The Investment Industry Association of Canada (IIAC) is the first to make public its comment regarding the binary options ban proposed by the Canadian Securities Administrators (CSA). The consultation on the prohibition has already closed in Alberta and Quebec and continues in other Canadian provinces and territories. The IIAC had already opposed earlier plans by Quebec’s financial markets regulator AMF to impose a ban on binary options and the latest efforts by the Canadian authorities in this respect also faced the opposition of the industry body.

In its official response to the proposed regulatory changes, the IIAC, which represents 130 Dealer Member firms regulated by the Investment Industry Regulatory Organization of Canada (IIROC), reiterates its stance 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.

The IIAC also notes the CSA proposal to prevent retail investors from circumventing a trading ban by setting up a company or trust for the purpose of trading binary options. The IIAC argues that “any retail investor that will have the means to create a company or a trust in order to circumvent a trading ban should be considered a sophisticated investor”. Therefore, no protection would be needed for this type of investor.

The IIAC claims that the problem with binary options is in the way they are offered and not in their nature per se.

These statements run counter CSA’s stance that non-fraudulent binary options pose significant risks to individuals too.

Regarding fraudulent binary options offers, the IIAC urges CSA to keep warning investors of these scams, as well as about schemes that promise recovery of money lost to binary options trading. The IIAC also believes that the Royal Canadian Mounted Police should be involved in stopping international fraudsters. The RCMP should shut down the websites of fraudulent entities and try to prosecute the criminals with the help of international law enforcement agencies.

Earlier this week, the RCMP published a warning about binary options scams, noting a rise in complaints about this type of fraud. However, when it came to actually helping people, the RCMP advised those affected to contact the local securities regulator and the Canadian Anti-Fraud Centre. It seems that the police is also engaged to the degree of issuing warnings rather than taking action.

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.

<