Through an announcement issued on 27 January, Montréal-based Autorité des marchés financiers (the “AMF”), which is the regulatory and oversight body for the financial sector in the Canadian province of Québec is calling the trading in binary options via websites to be “promises of easy money” and is thus sounding the alarm and urging Québec consumers to stay clear of such scams.
AMF President and CEO Louis Morisset is quoted as saying that “No business is currently authorized to market or offer binary options in Québec. Over the past few months, we have seen a spike in reports and calls to our Information Centre about binary options offered on-line.” He further added that the watchdog is “especially concerned that consumers who have been enticed by promises of attractive payouts, not only here in Québec, but elsewhere around the world as well, will never see their money and have exposed themselves to a high risk of identity theft and fraud.”
In a very critical and harsh announcement, Québec’s AMF resembles binary options to bets and adds that the suspicious platforms offering these products are similar to on-line casino sites. The Authority further explains that investors are usually asked to bet on the performance of a currency, market index or stock in the short term—often just a few minutes and adds that when that time is up, the investor receives a pre-determined payout or loses his bet. In the AMF’s view this is an “all or nothing” proposition, a little like a game of chance, while it also points out that even when investors earn “virtual” gains, they often cannot pocket the rewards.
Highlighting that victims of this type of scheme are tempted by the allure of fast profits or an easy first-time investment opportunity, the AMF also expresses its concern that consumers are being solicited aggressively to invest on other platforms to recover their losses, and that some are unfortunately responding to these offers and are being defrauded a second time.
Admitting that businesses thought to be illegally offering investors the chance to make quick money from binary options are operating practically world-wide the AMF informs the public that is working with other regulators to share best practices in order to counter these increasingly widespread illegal offers.
The Canadian province regulator further clarifies that offering investment services or products, whether through an on-line platform or in person, is a regulated activity and points out that before investing, investors should always check with the AMF. According to the announcement: “any business that wishes to create or market a derivative in Québec must apply to the AMF for qualification before the derivative is offered to the public. In addition, qualified businesses must offer derivatives to the public through a derivatives dealer duly registered with the AMF, or register with the AMF as a dealer. Finally, qualified businesses must be authorized by the AMF to market each derivative product they wish to offer to the public.”
Through this announcement the AMF also publicized its update list of websites which it says are operating illegal trading platforms in Québec. The total number of entities on the list is 73, with 19 of them being new additions, since they are the platforms most recently identified as suspicious and which are not authorized to market or offer investment products and services in Québec. The full list is shown below with the new additions appearing in bold:
Unauthorized trading platforms
The AMF further clarifies that this is not an exhaustive list and that the list is updated only when new unauthorized sites are brought to its attention. Moreover, it points out that if a website is not listed, it is not necessarily an authorized website and it thus urges consumers to always check whether the person or company with whom they are considering investing is duly authorized.