The Manitoba Securities Commission (MSC), the financial regulatory body of the Canadian province of Manitoba, issued over the weekend warning notices against binary option brokers 53 Option and Hedgestone Group for providing financial services to local citizens without being authorized.
Neither of the two brokers, nor Iconics PS LTD. and Icon Markets LTD., affiliates of Hedgestone Group, are registered in Manitoba to engage in the business of trading securities or advising anyone with respect to investing in, buying, or selling securities, the financial watchdog said.
Hedgestone Group and its affiliates do business as www.hedgestonegroup.com. The brand is operated by Icon Markets, allegedly operating out of Belize and Bulgaria. Icon Markets hold a license from the International Financial Services Commission (IFSC) of Belize. Its services company, Iconic PS, is based in Bulgaria.
53 Option, www.53option.com, is allegedely operating out of London,UK. It also provided no regulation details.
Both Hedgestone Group and 53 Option offer binary options in currencies, stocks, commodities, 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.
Although these type of trading instruments are not illegal in Canada, brokers need to acquire regulatory approval in order to have them in their offering. They are considered securities and fall under the jurisdiction of the relevant provincial watchdogs. The Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities regulators, has warned a couple of times since the beginning of the year that there is not a single binary options broker or platform authorized or licensed to operate on the country’s territory.
The MSC has said earlier that in the first five months of 2016 alone, Manitobans have reportedly lost nearly $185,000 to unregistered, offshore binary options firms, trading under a variety of names. However, the regulator said at the time the figure was probably higher due to the large number of unreported cases.
We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec FCA, and CFTC/NFA, among others.