Canada’s BCSC warns against unauthorized binary options broker PrimeBrokerz

Canada’s BCSC warns against unauthorized binary options broker PrimeBrokerz

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Canadian provincial financial regulator British Columbia Securities Commission (BCSC) urged investors on Thursday to be cautious when engaging with binary options broker PrimeBrokerz, owned by Danesi Global Ltd., since neither it, nor its parent company are authorized to provide financial services in the province.

The company is not registered to trade in or advice on securities or exchange contracts within the province. Nevertheless, it has been targeting citizens of British Columbia and at least a single resident was able to open a trading account with the broker.

When engaging with unauthorized and non-regulated brokers, traders are putting their investments at higher risk.

The broker operates out of the website www.primebrokerz.com. It offers five account types with a minimum deposit requirement ranging from $250 to $250,000. The broker provides a return on investment of up to 96%.

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In Canada, capital markets fall under the regulation of provincial watchdogs and legislation rules may vary in from province to province. Binary options are not forbidden, but providers of such instruments need to be regulated in order to operate in the country. In Canada, capital markets fall under the regulation of provincial watchdogs and legislation rules may vary in from province to province. Under the BCSC’s legislation, binary options are treated as securities. 

As of today, there is not a single binary options broker or platform authorized or licensed to operate in Canada.

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 quite controversial due to their risky nature and the lack of tight regulation. In the US they are allowed to be offered only by licensed providers and via exchange-traded contracts. In Europe, most reputable authority bodies have expressed intentions to restrict high-risk trading in instruments, with binary options first on the list. France and the Netherlands are in the process of developing bills that would prohibit the advertisement of risky instruments and Germany is also considering the possibility, but has not made any steps as of now.Belgium banned from 18 August the distribution via online channels of over-the-counter (OTC) binary options, spot forex, and CFDs with leverage.

Israel banned trading in binary options and now is considering to prohibit their advertising abroad.

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