CMC Markets (LON: CMCX) has notified its clients in Australia that the trading platform will stop offering Countdowns, an investment similar to binary options, in the county from the end of this month.
“Please note from 5 pm AEST 30 April 2021, countdowns will no longer be available to trade on the Next Generation platform,” the broker’s short notice on its website stated.
Rebranded Binary Options
As CMC Markets explained, Countdown allows traders to speculate on whether the price of an instrument goes up or down in a specified time. Once a Countdown is opened, the stake is immediately payable, and a corresponding deduction will be made to the cash in the relevant account.
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A Countdown will be closed and settled by the platform automatically once the Countdown expires. These instruments usually have a time frame of just 30 seconds and offer a payout of up to 90 percent.
The broker first introduced such instruments in 2015 in Britain, where it is licensed as a gambling product.
The decision to cease trading with these rebranded binary options in Australia came just ahead of the country’s ban on binary options, which will take effect from May 3, 2021. The Australian Securities and Investments Commission (ASIC), the country’s financial market watchdog, took the decision citing 80 percent of retail clients lost money trading binary options. Indeed, the simplicity of binary options makes them luring yet too risky.
Moreover, the Australian regulator imposed some strict restrictions on the brokerage services, the most noticeable one being the restriction on the offered leverages. CMC Markets, which operates with an AFS license in the country, updated its trading services earlier to comply with the new rules.