On March 2, 2017, the Canadian Securities Administrators (CSA) issued a warning to Canadians about binary options fraud. The CSA had formed the Binary Options Task Force to raise awareness and protect Canadians from binary options scams. It has launched a new resource site, www.BinaryOptionsFraud.ca, as part of a campaign to educate Canadians about the serious financial dangers posed by binary options trading. The CSA has identified binary options fraud is a leading type of investment fraud facing Canadians today. The CSA warns that no registered individuals or firms are permitted to trade binary options in Canada. http://www.osc.gov.on.ca/en/NewsEvents_nr_20170302_binary-options-fraud.htm
Binary options take the form of a wager in which investors bet on the performance of an underlying asset, often a currency, stock index, or share, and the timeframe on this bet is typically very short, sometimes hours or even minutes. When the ‘investment’ period is up, the investor receives a predetermined payout or loses the entire amount. Binary options “traders” rely on websites and social media ads to market their product.
The current CSA warning against binary options trading follows on earlier warnings published by the CSA on March 9, 2015 http://www.osc.gov.on.ca/en/NewsEvents_nr_20150309_binary-option.htm and on March 16, 2016 http://www.osc.gov.on.ca/en/NewsEvents_nr_20160323_csa-alert-beware-binary-options.htm
On February 1, 2017 the Autorite des marches (“AMF”) Quebec’s securities regulatory authority, published proposed amendments to the Derivatives Regulation under the Quebec Derivatives Act which would effectively ban the sale of short term binary options to Quebec residents.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
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