Do not invest more money than you can afford to lose.
Canadian provincial financial regulator British Columbia Securities Commission (BCSC) issues last week a warning notice against binary options broker Crown Managers for providing financial services in the province without having the required authorization.
Crown Managers is not registered to trade in, or advise on, securities or exchange contracts in British Columbia, and thus is not allowed to offer such services to local residents. Nevertheless, the broker has solicited a local investor to open a trading account with Crown Managers.
The broker’s website, www.crownmanagers.com, is no longer functional. According to the Canadian watchdog, Crown Managers claims to have offices in China, Norway, the UK and the US, and offers an online binary options trading platform.
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. Binary options, which are treated as securities, are not forbidden, but providers of such instruments need to be regulated in order to operate in the country. However, there is not a single binary options broker or platform authorized or licensed to operate in Canada.
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.
When engaging with unauthorized and non-regulated brokers, traders are putting their investments at higher risk. We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.
