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Canadian provincial financial regulator British Columbia Securities Commission (BCSC) posted warning notices on Thursday against binary options brokers and platforms Arianus Ltd., doing business as IvoryOption, and TTN Marketing Ltd., trading as Trades Capital.
The BCSC said it came across the two brokers after Trades Capital had placed advertisments within the province and IvoryOption allowed a British Columbia resident to open an account with it. The regulator warned that neither IvoryOption, www.ivoryoption.com, nor Trades Capital, www.tradescapital.com, are registered to trade in, or advise on, securities or exchange contracts within British Columbia.
Both brokers offer trading in binary options on forex, commodities, indices, stocks. IvoryOption provides a web-based trading platform. They are also both based in the UK, according to their websites. However, no information regarding authorization or licensing was available.
Under the British Columbia legislation, binary options are are regulated as securities under the securities laws. In Canada, capital markets fall under the regulation of provincial watchdogs and legislation rules may vary in from province to province. 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.
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.
Binary options are the closest thing to gambling in the online forex trading world. Regulatory bodies across the globe have been active in issuing warnings against binaries brokers either because they are non-regulated or because they act suspiciously and represent high risk for investors and their funds.
In other countries trading in binaries is strictly regulated and authorities often issue warnings against scammer or unauthorized binary options service providers.
Although this type of trading is not illegal in Canada, in some countries it is forbidden altogether, while in others, such as neighboring USA, binary options 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.
Source: BCSC