The Australian Securities and Investments Commission (ASIC) has committed to disrupt the offering of binary options to Australians. Back in March, the regulator has conducted a review that singled out 330 apps which were offered to Australians by unlicensed entities and individuals.
The applications have been divided across three different groups. About two thirds facilitated trading of binary options, 25 percent delivered some sort of trading signals and the remaining pertain to introducing brokers.
The Australian regulator is highlighting that the claims that the entities and individuals that own the apps are a source of concern.
ASIC Commissioner Cathie Armour said, “This is a timely reminder for investors to remain vigilant and not fall for flashy advertising or hard selling. Investors also need to make sure any financial service provider, regardless of the way that financial service is being provided, is adequately licensed and authorized to provide those services.”
The descriptions of the apps have contained misleading statements that entice potential clients to trade binary options. The numerous marketing slogans that have been used by binary options providers appear to have been widely used on Apple’s App Store and Google Play.
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About 80 percent of all applications didn’t offer any risk disclaimer at all, while introducing brokers did not disclose the mechanism of their compensation to the end users.
Did ASIC Trigger Apple’s App Store Ban?
In it official announcement elaborating on ASIC’s crusade against binary options app developers and publishers, the regulator highlights that some applications were merely used to collect data. The prospective clients were entering their personal details only to be cold called later and pressured with hot sales tactics.
After collecting the data on the 330 apps, ASIC contacted Apple and Google asking them to ban the apps. The tech giants acted briskly on the ASIC’s investigation and removed the applications from their respective app stores.
Apple recently changed its app developer guidelines, stating that apps that facilitate binary options trading will not be permitted on the Apple App Store. Finance Magnates broke this piece of news back in June.
“In an age where technology can hide who is offering and controlling a product, buyer beware has never been so important. If something appears too good to be true, it probably is,” elaborated Commissioner Armour.
ASIC further highlights that binary option providers are controlling pricing for their products. Reviews of comments on the app stores have shown that users have been misled to easily capitalize on opportunities in demo mode and lost money once opening a live account.