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Canada considered binary options to be illegal

Canada considered binary options to be illegal

created Paweł MosionekSEPTEMBER 2, 2017

Canadian Financial Supervisory Commission (Canadian Securities Administrators - CSA)decided to implement new regulations that consider binary options to be illegal. With immediate effect, the ban on advertising, sales, and any activity related to binary options became effective.

Radical steps of the CSA

Such an approach by the regulator may shock, however, the first mentions of this type of idea appeared in February 2017, and until the end of July, open public consultations on the options were conducted. The radical action also has its solid justification - the Canadian list of warnings against binary brokers is already close to the size of a small book. In about two years, there has been a month in which the CSA would not issue a warning against several trade services companies in the OB. Does this mean the end of binary options in Canada? Yes and no.

Options above 30 days allowed

The CSA regulator introducing new regulations (so-called Regulation 91-102 Binary Options Ban) he did not want to dispose of all option instruments. The restriction applies only to binary instruments with a maturity less than 30 days. Of course, the entries only in theory leave room for maneuver, because on OB the predominant time of extinction is the 30- and 60-second variant.

It is worth remembering that every administrative region in Canada has a separate financial supervision committee. This means that CSA regulations will not cover all of Canada and, ultimately, the decision on such a step must be taken separately. However, the practice shows that these authorities work closely together, so it's probably only time to get banned from the whole country.

Louis Morisset, director of the CSA:

Louis Morisset

"Crimes related to the binary options market are one of the major violations on the financial markets that Canadians are currently facing. By banning the market, the CSA is at the forefront of the rate that combats the often unfair and unethical activities of financial enterprises, ensuring the well-being of citizens. We are sending a clear message that this type of product is not suitable for retail investors because of high risk. "

The committee chairman unequivocally suggests that in the case of binary options we are dealing not with the financial market and gambling, which has nothing to do with investing. However, is it surely the only way out to protect investors in the form of a total ban?

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About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.