In the last few days multiple regulatory authorities across the globe have issued caution or stern warnings about Binary Options firms operating or offering services in their respective jurisdictions, either without proper licensing or in some cases even citing a fictitious one, and even license revocation.
The latest warning appears to come from Vancouver Canada where the British Columbia Securities Commission (BCSC) has put out an Investor Alert warning about internet-based binary options trading platforms.
As per information dated on its website as of January 10, 2014, BCSC said it has recently become aware of RBOptions, an unregistered online trading platform claiming to operate out of Toronto, Ontario, according to the warning which urges B.C. residents to use extreme caution if approached by this company as per the BCSC. After reviewing the RBOptions website, it doesn’t appear that the company has any regulatory registrations anywhere (as no related entity information was in its terms and conditions of its customer account agreement either).
Reminder by BCSC of August 2013 Warning
In addition to RBOptions, the BCSC is also warning the public about 24options.com, GOoptions.com and TradeRush.com, the three of which were placed on the BCSC Investment Caution List in August 2013, as described in the Investor Alert.
From these latter three firms, 24options is a CySEC regulated broker operated through cbay financial services limited, and is therefore under governmental regulatory supervision — just not in B.C, hence the warning to B.C. residents.
However, the remaining two firms do not appear under any jurisdictional regulatory obligations at all, other than any corporate law common to where an entity is domiciled (but not always readily enforced or indicative of client protection). For example (with regards to regulatory status), GOoptions lists on its website that its co-operated by Hortense Holdings Limited, and owned by the Belize-based company Internet Adgency CORP, but doesn’t appear regulated from what can be readily confirmed through its website information listing. Finally TradeRush. com lists its address in British Anguilla, and as a DBA of GBM Ventures Ltd, and also doesn’t appear regulated anywhere either, from what can be readily observed.
How to Get Free Stocks in Orca?Go to article >>
Regulated Elsewhere versus Not Regulated Anywhere
Getting to back to the BCSC warning, after briefly explaining Binary Options and certain risks and features with these types of products, the BCSC explained that while some binary options are listed on exchanges and traded by registered individuals, these represent only a portion of the market, and how its concern is how a large portion of binary options are illegally traded through unregistered and unregulated online trading platforms.
As noted by the regulator, legitimate registered and regulated providers do exist, and Forex Magnates opines that just as Forex went through its stage of regulatory resistance and evolutionary path from a regulatory perspective (after jumping numerous hurdles – such as in the U.S.), so will binary options continue to evolve with regards to regulations, as more and more brokers are adding them as stand-alone products or as part of multi-asset platform offerings.
Furthermore, many of the online platforms offering binary options are located offshore (as noted above), as per the BCSC warning which urged British Columbians to exercise caution when dealing with firms that are not registered to trade or advise in B.C., as it greatly lessens investors’ ability to recover their money, as described in the press release.
Known for its fierce province-focused rules which are vastly different from other provinces in Canada, B.C. has historically been tough on forex providers as it looks to have its province on lock-down with regards to its regulations (similar to the US policing overseas firms for soliciting US residents).
A noteworthy point is, how a broker, if not regulated/registered in B.C, must take extreme caution to ensure its ads do not show up in the province, nor its sales people mistakenly call a demo lead for a customer that may have a B.C. phone number, or located in the province, even if the information provided on the demo sign-up form lists otherwise (i.e. could list a different country/province), or even email communications which could be grounds for such warnings (if received by B.C. residents).
The regulator asked that members of the public contact it about the above-mentioned firms and any other unregistered binary options provider that solicit B.C. residents, as the recent crack down on unregulated binary option firms gains momentum. A full copy of the press release can be found on the BCSC website.