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The Manitoba Securities Commission (MSC), the financial regulatory body of the Canadian province of Manitoba, issued earlier this week warning notices against binary option brokers PWRTrade and IvoryOption operating within its geographical jurisdiction without being authorized.
Either of the brands and the companies behind them are not registered in Manitoba to engage in the business of trading securities or advising anyone with respect to investing in, buying, or selling securities, the regulator warned.
PWRTrade is operated by Marshall Islands-based GN Capital Ltd. and Bulgaria-based GN Management, while IvoryOption is a brand of Arya Group Ltd. which is also based in Bulgaria and the UK, according to the regulator. Neither of the brokers provided on their websites information regarding licensing or authorization.
IvoryOption, www.ivoryoption.com, and PWRTrade, www.pwrtrade.com, both offer web-based trading platforms for binary options on currencies,commodities, indices and stocks.
PWRTrade promises a payout of up to 189% in just 60 seconds. On the other hand, IvoryOption offers a return on investment of up to 720% if the bet is winning and up to 10% if the option expires out of the money. Both offers are rather unrealistic, given most binaries brokers offer profit of less than 100% for a winning bet.
We have informed you that two other regulatory bodies have also issued warnings against IvoryOption for not having the required authorization – the British Columbia Securities Commission (BCSC) and the US Commodity Futures Trading Commission (CFTC). In addition, the Financial Services and Markets Authority (FSMA) of Belgium has issued an alert against PWRTrade for not being authorized.
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. Earlier this year, the Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities regulators, warned twice 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.
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.