As Regulators Crack Down The Investment Industry Pushes Back
Canada’s regulators have long been counted among the most hostile toward binary options and there is good reason. The nations citizens have been targeted mercilessly by binary options scams and fraud leading to the suicide of at least one man. The problem is not that binary trading is illegal in Canada because it’s not, it is because there are no legally registered and operating brokers which creates a two-fold problem. The first problem lies with those who legitimately want to trade. They have nowhere to go so must seek out the off-shore brokers and hope they find a reputable one. The second lies with the public in general. Many of Canada’s citizens, those with no business trading binary options, are becoming entangled with fraudulent marketers who operate outside the law and are giving the entire binary options industry a bad name.
Quebec upped the ante this year when they announced some proposed changes to their regulatory structure in order to completely ban binary options. The good news is that there was some push-back within the government which resulted in a toned down version of the original law. The new proposal would ban the sale of binary products which met three conditions. These are 1) if the trade is an all-or-nothing proposition 2) the buyer cannot sell the option contract before expiry and 3) it has a duration of less than 30days.
In response to these moves the Canadian Securities Administration created a new task-force to fight binary options fraud (remember, each of Canada’s provinces has their own regulator as well as national level regulators). The first thing they’ve done is create a new website for the purpose of educating consumers in the fight against scam brokers. The bad news is that their over-the-top approach has painted the entire binary options industry as a fraud which is just not the case. On a lighter note, the British Columbia Securities Commission just released a video entitled “I’m coming to scam you”. It is a humorous look at what scam artists are thinking and intended to help the public spot fraud.
There Is Opposition To The Anti-Binary Movement
There is opposition to the anti-binary options movement that is building in Canada. The IIAC, the Investment Industry Association of Canada, responded to the CSA and Quebec AMF with a letter outlining their position on why binary options should be offered legally through regulated brokers. They point out that binary trading is not a problem in and of themselves, it is the scam brokers who take advantage of the internet to use binary options to commit fraud that are the problem. Their stance is that by offering a legal source of trading through regulated brokers it will help eliminate the risk of fraudulent activity by squeezing the scams out of the marketplace.
The bottom line is simple to read. No matter what the Canadian regulators choose to do they will not be able to stop the onslaught of binary options scams. This has been proven all across Europe as one country after another reports their inability to curb fraudulent activity. The only answer, in this traders humble opinion, is for international regulators to set standards for trading in their countries, allow those who want to trade to do it in regulated arenas, continue to warn the public of marketing scams and make scamming so hard for the bad guys they can’t operate. We’ll see what happens. Until then trade on and trade safely.