ASIC issues warning to potential investors regarding unlicensed binary options firm

ASIC has today warned against dealing with an unlicensed binary option provider, cautioning all Australian retail investors about the risks of dealing with unlicensed binary options providers.

ASIC defines a binary option as a financial product, in particular a derivative, under the Corporations Act. Any entity that deals in, or provides advice about, binary options to Australian investors must hold an Australian financial services (AFS) licence, or be authorised by an AFS licensee. is operated by Belize-based company B.H.N.V Online Ltd (BHNV). BHNV does not hold an AFS licence, nor is it an authorised representative of an AFS licensee. has been marketing binary options to Australian investors by publishing online advertisements aimed specifically at Australians, offering exclusive deals to Australian investors and publishing articles aimed specifically at Australian investors.

Following concerns raised by ASIC, BHNV has undertaken to stop marketing and offering financial products and services to Australian investors.

ASIC Commissioner Cathie Armour said, ‘ASIC urges all investors considering trading in binary options to check they are dealing with an entity that holds an Australian financial services licence or is authorised by an Australian financial services licensee and regulated by ASIC. This can be done by searching the Professional registers on our website.

‘Dealing with licensed financial services providers that are regulated by ASIC affords certain protections to investors and imposes specific obligations that do not apply to unlicensed providers.

‘Binary options are relatively new products in the Australian market so investors might not fully understand the risks, even where the provider is licensed. We urge anyone interested in trading in binary options or other derivatives to make sure they understand what they are getting into and check they are dealing with an entity that is licensed to provide these products in Australia’, Ms Armour said.

Ms. Armour’s perspective further reinforces ASIC’s cautious approach toward retail OTC FX and binary options. The regulatory authority has indicated clearly in its enforcement reports that it aims to conduct further surveillance and ensure stringent oversight with regard to the business practices of FX and binary options companies offering services to retail investors, as well as making a consistent effort to warn potential investors of the risks of trading in FX and binary options via various public notices.

For the official announcement from ASIC, click here.

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