The Canadian Securities Administrators (CSA) – the body unifying all regional financial markets and services regulators in the country – has announced an official ban on binary options. The implementation of Multilateral Instrument 91-102 Prohibition of Binary Options makes it illegal to advertise, offer, sell or otherwise trade binary options shorter than 30 days with any individual residing in Canada.
The prohibition is the result of CSA Binary Options Task Force that was formed in 2016 as a proactive means to fight this form of fraud. The first reports of CSA’s intentions to explicitly forbid binary options in Canada appeared earlier this year. Until now this was not the case, even though in practice there were no licensed binary options brokers in the country.
This, of course, did not stop the industry from offering its services to Canadians. Often they became victims of binary options scams and lost significant sums.
“Binary options are the leading type of investment fraud facing Canadians today, and the impact of this kind of scam on individuals is staggering,” said Louis Morisset, Chair of the CSA and President and Chief Executive Officer of the Autorité des marchés financiers, quoted in a CSA official statement. “This ban positions the CSA among the world leaders in fighting back against binary options fraud and represents an important step in protecting Canadians. It conveys a clear message that these products are unsuitable for individuals because of their risky characteristics and that their trading is illegal.”
“From day one, our job has been to find every avenue to protect Canadians from this particular fraud,” said Jason Roy, the Task Force’s Chair and Senior Investigator with the Manitoba Securities Commission. “This ban supports our efforts, which include working with credit card companies, tech companies and advertisers that binary options fraudsters rely on to carry out their schemes. It will all add up to fewer Canadians being exposed, and fewer Canadians being cheated.”
It does not become clear when the prohibition will come into effect, but either way, it will hardly affect the scam binary options brokers.