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Canadian provincial financial regulator British Columbia Securities Commission (BCSC) issued a warning on Friday regarding unauthorized binary options broker and platform provider Magnum Options, part of Hampshire Capital Ventures Ltd. The broker provides services to local citizens without having an authorization.
The regulator noted that neither Magnum Options, www.magnumoptions.eu, nor Hampshire Capital Ventures are registered to trade in, or advise on, securities or exchange contracts in British Columbia.
On its website, Magnum Options says it is based in the UK, but it mentions nothing about licensing or authorization. The broker offers trading in several types of binary options, both short-term and long-term, on currencies, commodities, stocks, and indices. In binary options trading, investors guess whether the price of a certain instrument 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 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. 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.
The BCSC warns local citizens to be cautious when choosing financial intermediaries and not to engage in those that 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.
Although binary options trading services are not illegal in Canada, in some countries it is allowed, while in others, 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.
We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.