Warning includes RBOptions, 24options.com, GOoptions.com and TradeRush.com
Binary options brokerages are coming under scrutiny under one of the ten Canadian regulators as the British Colombia Securities Commission (BCSC) has issued a warning to investors about binary options trading platforms. The particular firm under the crosshair of the regulator is called RBOptions and claims to be based in Toronto, Ontario. The BCSC advised caution when dealing with the aforementioned company.
As regards to the specificity of Canadian regulation we remind you, that Canada actually does not have a national securities regulator as do most other countries (e.g. the SEC in the U.S., or the FCA in the U.K.) — each of Canada’s 10 provinces has its own regulator. In its statement the BCSC proceeds to explain what do binary options contracts consist of and the associated all-or-nothing trading risks that they carry.
According to the BCSC a large chunk of binary options contracts that are available from offshore companies for trading are not legally allowed to present their services within the regulator’s jurisdiction. Other binary options companies that the watchdog is warning against in the statement are GOoptions.com, 24options.com and TradeRush.com. The aforementioned have been placed on the BCSC Investment Caution List in august 2013.
Not a big surprise considering the humongous amount of effort that is required for a company to get regulated under Canadian laws. Canada’s main securities overseer, IIROC (Investment Industry Regulatory Organization of Canada), is actually a self-regulatory organization for all firms offering securities trading in Canada, and requires all its members to also join the Canadian Investor Protection Fund (CIPF).
Different forex brokers looking to (legally) do business with Canadian retail clients have taken different approaches. Industry leader FXCM’s www.fxcm.ca website operates in Canada via a white label agreement with locally-licensed Canadian commodities dealer Friedberg Mercantile Group. Gain Capital Canada (Forex.com) and Toronto-based Oanda have taken the direct route, and are have joined IIROC.
For the full press release by the Canadian regulator visit BCSC’s website.