The Canadian Securities Administrators (CSA), an umbrella organization of the country’s provincial and territorial securities regulators, has formed a task force which would address the ongoing issue with the increasing number of binary options scams in the country, the CSA said.
The Binary Options Task Force will inform and educate Canadian investors about the possible risks associated with trading in such instruments. Statistics indicate that the number of victims to binary options get-rich-quick schemes in Canada is on the rise.
“In response to this escalating problem, we formed a Binary Options Task Force to raise awareness and protect Canadians from binary options scams and launched a new resource site, www.BinaryOptionsFraud.ca, as part of a campaign to educate Canadians about such scams,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers.
The newly-formed task force will collaborate with online advertisers and mobile companies to eliminate binary option advertising and mobile apps in Canada. It will work with domestic and international organizations and governments to create a system for sharing and tracking of relevant fraudulent activities. In addition, the team will work closely with the fraud teams at major credit card and financial institutions to cut off funding mechanisms.
Recently, the CSA reported that the total number of investor alerts against businesses and individuals issued by Canadian securities in 2016 was 60, of which more than half dealt with online offers of binary options products. A large number of the alerts were related to businesses located abroad that were not registered in Canada to engage in securities trading or advising.
“Binary options fraud is a leading type of investment fraud facing Canadians today,'” said Jason Roy, Chair of the CSA Binary Options Task Force and senior investigator with the Manitoba Securities Commission. “We want Canadians to know that there are no registered individuals or firms permitted to trade these products in Canada. We are seeing families of every demographic being affected by financial losses due to binary options trading. We want Canadians to understand the financial dangers associated with these products.”
Trading in binary options instruments in the country is allowed by law. However, there is not a single broker authorized to provide such services. The financial markets in the different provinces are regulated locally and their jurisdictions may vary. Quebec has become the first Canadian province to consider the formal prohibition of the sale of binary options to local citizens.
The CSA is the council of the 10 provincial and three territorial securities regulators in the country. It co-ordinates and harmonizes regulation for the Canadian capital markets. The majority of enforcement activities are executed locally, but in some cases regulators of different provinces and territories work together to supervise market players and investigate possible misconduct.