Notice of Commission Approval. Notice of Correction. Notice of General Order. Notice of Ministerial Approval. Notice of Rescission. Notice of Withdrawal. OSC Policy. OSC Rule. Recognition Order. Sort by Newest Oldest Relevance. Unofficial consolidations including forms. Unofficial Consolidation: Companion Policy CP Prohibition of Binary Options. Unofficial Consolidation Companion Policy. December 12, Unofficial Consolidation: Multilateral Instrument Prohibition of Binary Options.

Unofficial Consolidation Multilateral Instrument. Instruments, rules and policies. Companion Policy Prohibition of Binary Options. December 7, Multilateral Instrument Prohibition of Binary Options. Notice of Ministerial Approval of Multilateral Instrument Prohibition of Binary Options. Notice of Ministerial Approval Multilateral Instrument. CSA Multilateral Notice of Multilateral Instrument Prohibition of Binary Options and Related Companion Policy.

September 28, CSA Notice and Request for Comment - Proposed National Instrument Prohibition of Binary Options and Related Proposed Companion Policy Comments Received. Request for Comment National Instrument. Home For Investors File a Complaint or Report an Investment Scam Investor Education Resources Investor Education Videos Investing Information for Seniors Investing Information for Young Investors Blog: Before You Invest Investment Cautions and Alerts.

Issuer List CTO Database CEDIFs List of CEDIFs Continuous Disclosure Obligations Filing Documents Electronically Crowdfunding Start-up Crowdfunding Exemption Crowdfunding Exemption MI Category 9 - Derivatives. CSA Multilateral Notice of MI Prohibition of Binary Options and Related Companion Policy.

Rule Prohibition of Binary Options. Failure to file annual financial statements. Failure to file interim financial statements. Failure to file an Annual Information Form AIF. Failure to file required proxy materials or a required information circular. Failure to file an issuer profile supplement on the System for Electronic Disclosure by Insiders SEDI.

We, the securities regulatory authorities in all Canadian jurisdictions other than British Columbia collectively, the Participating Jurisdictions , are implementing the following:. In this Notice, the Instrument and the CP are referred to collectively as the Binary Options Rule. In some jurisdictions, government ministerial approvals are required for the implementation of the Instrument.

Provided all necessary approvals are obtained, the Binary Options Rule will come into force on December 12, The British Columbia Securities Commission is not an authority implementing the Binary Options Rule.

The purpose of the Binary Options Rule is to protect would-be investors from becoming victims of binary options fraud and from an illegal promotion of extremely high risk products. We believe the Instrument will achieve this goal by raising awareness among investors that the sale of these products is illegal and by disrupting the distribution of these products, including its facilitation through payment processing and advertising.

To this end, the Instrument explicitly prohibits advertising, offering, selling or otherwise trading a binary option with or to an individual. The Instrument prohibits advertising, offering, selling or otherwise trading a binary option having a term to maturity of less than 30 days with or to:. The Instrument sets out a definition of "binary option" that is intended to capture a range of products that are commonly called binary options, or that are similar to products that are commonly called binary options, regardless of how they are named.

If the outcome is yes, the buyer wins or is "in-the-money". If the answer is no, the buyer loses or is "out-of-the-money" and loses all, or nearly all, of their investment. The time or time period specified in the contract for determining whether the predetermined condition i.

The buyer either:. We are concerned by the large number of complaints received regarding the marketing of products commonly called "binary options" to individuals. Binary options are also called a variety of other names, including but not limited to:. All contracts or instruments, however named, marketed or sold that meet the definition of a binary option are prohibited under the Instrument.

A significant number of the complaints and inquiries received by CSA members concern online binary options platforms. These platforms operate as unregistered dealers, are typically located off-shore, and promise quick and high-yielding returns from trading binary options.

On some platforms, trading may actually take place but it is typically extremely difficult and often impossible to win on the bet because the platform controls the odds and often the reference value of the underlying interest.

In some cases, even if an individual theoretically does win, the winnings may appear as a credit on a trading account on the platform but the investor's money is not transferred or returned. In many other cases, no trading actually takes place and the operation is purely a fraud set up to take money from individuals, including through cash advances processed through the target's credit card.

Once a victim has lost their money, it is almost impossible to recuperate their losses. No individuals or firms are registered to sell binary options in Canada. The Instrument prohibits advertising, offering, selling and otherwise trading binary options to an individual and to a person or company that was created, or is solely used, to trade binary options. We consider a person or company to be trading in securities or derivatives in a local jurisdiction if that person or company offers or solicits transactions in securities or derivatives to persons or companies in that local jurisdiction, including through a website or other electronic means.

Offering investment services or products to persons or companies, whether by telephone, online or in-person, is a regulated activity. It is illegal to offer securities or derivatives, including binary options, whether or not subject to the Instrument, without being registered as a dealer. There are only limited and narrow exceptions to the registration requirement for transactions with highly sophisticated investors.

We emphasize that no offering of these products, including by a broker, dealer or platform, has been authorized anywhere in Canada. Many of these products and the platforms selling them have been identified as vehicles to commit fraud. Investing through unregistered offshore platforms or dealers can be risky and is a common red flag for investment fraud. Registration as a dealer is an important safeguard for investors, helping to ensure the character, proficiency and solvency of the dealer and typically requiring the registered dealer to assess the suitability of an investment for an investor.

We encourage all investors to visit aretheyregistered. ca to check the registration of any person or company offering investment products, including binary options, to Canadians. Anyone who has invested with, or has concerns about, a binary options trading platform should contact their local securities regulator.

We also encourage all investors to visit binaryoptionsfraud. The Instrument was published for comment as Proposed National Instrument Prohibition of Binary Options the Proposed NI on April 26, in all CSA jurisdictions except BC. The public comment period for the Proposed NI expired on May 29, in Alberta and Québec, June 28, in Manitoba and Saskatchewan, and July 28, in all other CSA jurisdictions except BC.

We received eight comment letters on the Proposed NI. A list of those who submitted comments as well as a chart summarizing the comments received and our responses is attached as Annex A to this Notice. Copies of the comment letters can be found on the websites of the Alberta Securities Commission, Autorité des marchés financiers, and Ontario Securities Commission. We have made certain non-significant changes to the Instrument in response to the comments received. We have also made several non-significant changes to the CP to provide further guidance on the types of contracts we intend and do not intend to capture under the Instrument.

Commenters generally supported the efforts of the CSA to help protect would-be investors from binary options fraud and generally strengthen the integrity of, and public confidence in, the financial sector, including by ensuring that products cannot be sold to investors through unauthorized mechanisms.

One commenter noted that certain investors mistake the current unlawful activity for that of regulated brokers in Canada, and that the reputation of the financial and brokerage industry is, therefore, indirectly at stake.

One commenter stated that binary options are high risk and not a get rich quick scheme, suggesting that the CSA should not ban binary options for all investors because some people have lost money. Another commenter urged that binary options are, by design, harmful for investors, particularly retail investors. The commenter stated that firms should not be allowed to offer binary options to the public, and particularly not to retail investors.

One commenter submitted that the offering of binary options does not enhance any investor portfolio, nor does it enhance fair and efficient capital markets. Another commenter submitted that non-fraudulent binary options products can be used to offset an existing risk or economic exposure or to speculate on market volatility -- for example, to hedge or speculate on very short term market volatility created by the release of specific major economic figures.

Commenters generally noted that those operating fraudulent online binary options platforms are unlikely to comply with the Proposed NI. No change. The Instrument is one aspect of the CSA's multi-pronged effort to combat binary options fraud, and we have already seen positive outcomes from this rule-making project.

Two commenters stated that the Proposed NI will not end the illegal activity but may interfere with current "legal" institutional binary options trading taking place in the Canadian market. One commenter submitted that the only market participants that will comply with the Proposed NI, such as the large institutional dealers, are already complying with all applicable securities laws and regulations.

Two commenters submitted that the policy objectives could be met with a narrowed scope, and that products traded on a recognized exchange or cleared by a recognized clearing agency or clearing house, or financial instruments legally traded on certain US exchanges should be excluded from the prohibition. It is currently our view that binary options should not be permitted to be sold to individuals by a registered dealer or regulated exchange.

One commenter submitted that the detailed regulatory oversight regimes applicable in each Participating Jurisdiction has proven to be effective with respect to other types of instruments, and that any financial product, and not only binary options, that is offered illegally to Canadian investors poses a threat to investors' protection.

One commenter submitted that, by prohibiting trading of binary options with a maturity of less than 30 days, the regulator is meeting its mandate to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets.

One commenter noted that many of the investor protection-related concerns regarding binary options are also present regarding leveraged retail forex and CFDs, including regarding pricing transparency, and queried whether other leveraged derivatives products sold to retail investors should also be covered in this rule-making project.

The focus of the Instrument is specifically on the fraud being perpetrated by unregulated, online platforms providing primarily -- to date -- binary options. Commenters pointed to other tools to deter and eliminate fraud relating to binary options, either in support of the Proposed NI or instead of the Proposed NI.

We note that the Instrument is one aspect of the CSA's multi-pronged effort to combat binary options fraud, and that we have already seen positive outcomes from this rule-making project.

One commenter submitted that efforts to attack the bad actors rather than the financial instrument, and that limit demand for the illegal product e. Four commenters generally felt that fraudulent binary options platforms and their offerings should be dealt with differently than "legitimate" binary options offered by a registered dealer or a recognized exchange, as in the U.

and certain other jurisdictions. It is currently our view that binary options will not be permitted to be sold to individuals by a registered dealer or regulated exchange. One commenter urged that the only effective means of influencing the fraudulent online platforms is through enforcement actions. Another commenter sought more emphasis in the Proposed NI on utilizing enforcement tools and coordinated enforcement action with other jurisdictions to deter and eliminate fraud associated with binary options.

The Instrument is one aspect of the CSA's multi-pronged effort to combat binary options fraud. One commenter noted that major credit card companies have recently taken steps to limit the availability of funding to unregistered providers of binary options.

The commenter submitted that the Participating Jurisdictions should also work with search engine providers to limit online advertising of illegal services to Canadian consumers. Two commenters recommended the RCMP be involved in stopping online binary options fraud, by handling investigations, shutting down websites and prosecuting platforms in coordination with international law enforcement agencies. One commenter submitted that fraudulent binary options should be treated as gambling activity, regulated by the applicable gambling authority in each province and subject to the Criminal Code, with enforcement by the RCMP.

Two commenters recommended that, if the CSA proceeds with the Proposed NI, that the rule should provide for a general exception for selling binary options through a registered or exempt dealer.

It is currently our view that binary options will not be permitted to be sold to individuals by a registered dealer. One commenter recommended that the CSA allow registered, IIROC-regulated firms to offer these products to all investors including both retail and sophisticated investors , in order to: ensure the protection of the public against unfair, abusive and fraudulent practices; apply the concepts of investment suitability; and apply disclosure obligations to allow clients to understand the product and the significant risks involved.

Permitting binary options to be offered on a recognized or exempt exchange or cleared by a recognized clearing agency or clearing house. Two commenters recommended that the CSA permit binary options to be offered to individuals on a recognized exchange. It is currently our view that binary options will not be permitted to be sold to individuals through a recognized exchange or cleared by a recognized clearing agency.

One commenter recommended that the CSA permit a registered dealer to offer binary options traded on a recognized exchange, or cleared by a recognized clearing agency or clearing house, noting the level of CSA oversight over a recognized exchange and a recognized clearing agency. Several commenters suggested that the definition of "binary option" is too broad, as it may prohibit:. the offering to an individual of an instrument otherwise duly listed on a recognized exchange or cleared by a recognized clearing agency;.

The Instrument is intended to prohibit the advertising, offering, selling and otherwise trading of a binary option to an individual, regardless of whether it is listed on a recognized exchange or cleared by a recognized clearing agency. A conventional option would not become a prohibited "binary option" simply because its term to maturity is less than 30 days. The Instrument is intended to prohibit the advertising, offering, selling and otherwise trading of a binary option to an individual, including an individual that is a sophisticated investor.

genuine non-fraudulent binary options that have been offered for many years by regulated firms dealing over-the-counter in Europe and Japan, or in the United States on exchanges.

The Instrument is intended to prohibit the advertising, offering, selling and otherwise trading of all binary options to individuals. binary contracts currently being legitimately sold to sophisticated individuals, including products described in the ISDA Barrier Option Supplement to the FX and Currency Option Definitions {1}.

Change made. After follow-up consultations with commenters, we have revised the definition of "binary option" to mitigate against the Instrument capturing some products that were not intended to be caught.

We believe that some of the products identified to us would not be caught by the definition, while other products -- including some identified in the ISDA Barrier Option Supplement -- would be caught. Information available to us indicates that individuals are not actively trading products under the ISDA Barrier Option Supplement. One commenter submitted that the definition may be too narrow, as it may not capture all types of product that present similar concerns and it may be too easy for a fraudulent online platform to work around.

The revised definition of "binary option" reflects a balancing of efforts intended to focus only on the products we intend to prohibit to be traded with individuals. One commenter submitted that the words, "a lesser amount or" should be deleted from section 1 b to help mitigate the risk that other products, including those that do not involve an "all or nothing" approach, would be captured under this definition.

One commenter submitted that the scope of the Proposed NI should be limited by the scope of contracts set out under the various Derivatives: Product Determination rules {2}. A number of the exclusions in the Derivatives: Product Determination rules are not appropriate or are not relevant to the Instrument.

Bitcoin, the first decentralized digital currency, remains the most popular and expensive cryptocurrency to date. The specified time or time period for determining whether the predetermined condition or conditions are met can be very short, sometimes hours or even minutes. In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of their platform that we used in our testing. In this case, your account balance will jump to 0, i. The definition of "binary option" is intended to capture contracts that provide for defined, discrete payout amounts e.

Categories:

• Binary Options
• Forex Bitcoin
• Forex Brokers
• Forex
• Binary Options online