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Canadian provincial financial regulator British Columbia Securities Commission (BCSC) has warned that CST Financial Services Ltd., operating as binary options broker and trading platform Opteck, provides services to local citizens without being authorized, the regulator said in a notice on Friday.
Opteck, www.opteck.com, is not registered to trade in, or advise on, securities or exchange contracts in British Columbia.
According to the BCSC, Opteck is a brand of CST Financial Services, which claims to be based in Belize. However, on its website is says it is a trading brand of Centralspot Trading, which is based and regulated in Cyprus. It acts as a broker and a trading platform for binary options on currencies, commodities, stocks and indices.
About a year ago, the Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities regulators, included Opteck in its Black List. With the warning notices, Canada joins a long list of financial regulators, including those of Australia and France, that have warned investors that the binary options broker operates without the proper license.
In binary options trading, investors guess whether the price of a certain instrument, in this case currencies, would go upwards or downwards within a pre-determined time frame. Once the time is up, the option is deemed expired and the bet is settled. Depending on the outcome, a trader either collects a profit, or loses money.
In British Columbia binary options are legally considered as securities trading instruments. In March, the Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities regulators, warned that there is not a single binary options broker or platform authorized or licensed to operate on the country’s territory.
Although binary options trading services are not illegal in Canada, in some countries, such as neighboring USA, this type of trading is restricted to exchange-traded only and there are two binary option exchanges – the Nadex and Cantor Exchanges.
The BCSC warns local citizens to be cautious when choosing financial intermediaries, especially if they are not registered to trade or advise in the British Columbia district. The regulator issues warnings against unauthorized financial companies on a regular basis and adds unregistered and unauthorized financial service providers that target local residents in an Investment Caution List. The list contains information about entities that are confirmed to engage in fraudulent activities, including foreign brokers not registered in British Columbia which target local citizens.
In Canada, capital markets fall under the regulation of provincial watchdogs and legislation rules may vary in from province to province. The BCSC is in charge of the regulation of the capital markets in the British Columbia province. Under its legislation, binary options are regulated as securities under the securities laws.
We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.