As the growth of the online retail binary options industry continues, regulators and pertinent authorities around the world are trying to keep up pace and tighten their controls in order to protect consumers in their jurisdictions.
A recent such example is the publishing of a “Black List” of unauthorized binary options brokers, the first in its kind to be issued by the Canadian Securities Administrators (CSA). This is an organization which represents the securities regulators of the 10 Canadian provinces and 3 territories. Since binary options are regulated as financial trading instruments in Canada, binary options brokers are required to obtain licenses as investment services providers in all the Canadian provinces where they wish to market these services.
It is true however that regulation in Canada remains fragmented and it is usually the securities watchdogs in Ontario and British Columbia which are the most vocal and active when it comes to issuing warnings to investors about unregulated brokers. The concerted effort to expose such firms through the CSA issuing a black list is thus considered a milestone.
The announcement accompanying the black list refers to the risks associated with binary options trading and highlights that “Many binary trading platforms are based overseas, despite listing a Canadian phone number or address. This means that investing with these platforms will move an investor’s money out of Canada and make it nearly impossible to recover if something goes wrong. The companies operating these platforms may not be registered to conduct business in Canada.”
All the companies featured on the list try to attract investors in Canada without having the proper licenses to do so. The CSA also warns that this black list is not exhaustive and urges investors to check its website to find out if a firm is authorized or not. The 37 companies which are named on this black list are:
Another example of the campaign against unregulated binary options brokers came last week from the French regulator, the Autorité des Marchés Financiers (AMF), which also announced the updating of its “Black List” of binary options brokers that offer their services in the country without having the necessary license to do so.
The previous time the list was announced was in December 2014 when it contained 155 entities. The current updated version features the impressive number of 189 companies, which are an alarming sign depicting that the number of those seeking to defraud unsuspecting consumers keeps rising.
In its relevant announcement, the French regulator points out that besides lacking the necessary registrations and licenses to operate in France, most of the companies on the black list also use methods to mislead potential customers as well as aggressive marketing and advertising without pointing out the risks involved with binary options trading.