Legality of Binary Options In Canada
In comparison to other countries, binary options trading activities in Canada are operating on a grey area with little or no regulation at all. Rules governing this area of trading are not grounded in law as opposed to those of other countries where their operations are based on solid legal foundations. It thus leaves many Canadians at crossroads especially those who wish to get involved in this trading area.
As opposed to Canada, some countries including the US and Cyprus have fully regulated the binary options business. To an ordinary Canadian, understanding these laws can be confusing since most of these laws are ever changing. The regulations are also country specific with various countries having their own regulating principles. Many binary options brokers are usually licensed in their own countries under their jurisdiction and start to extend their trading activities to Canada. They may license as binary options brokers or as internet gaming brokers given that all these fall under the speculative market.
Because Canada has no laws regulating this type of trading, it becomes difficult for any Canadian trader to get help from the concerned authorities when she or he wants to get involved in this type of trading. This then exposes a very critical area that the Canadian authorities need to regulate, and that is dealing with the question of whether binary trading should be regulated as internet gaming or if it should be treated separately as a trade in real securities. With this in mind, any Canadian willing to trade in this area should be extra careful when dealing with external brokers and wisely choose with which trader to deal with. The reason is that it can become an onerous task to retrieve back your money when your regulator does not have any control over the transaction.
Trading in Binary Options in Canada
This type of trading, which is classified as exotic options in Canada, is easily accessible to any Canadian trader as a form of investment. Due to its increased visibility in the market, binary options have experienced a rapid growth in the recent past and Canada is no exception. Many reputable online brokers have sprung up in the Canadian market and this has aroused a significant amount of interest from the Canadian citizenry. It is in this light that the Canadian Securities Agency (CSA) was formed.
It is an umbrella body that encompasses securities regulators of ten different provinces and three territories in Canada. Its core mandate is to streamline the capital markets in Canada to be at par with that of other countries which are leading the way in this type of trading practice. However, the organization has no laid down structures in place which can enable it to effectively regulate the binary options market in the country. So much work has to be put in this organization in order to make it meet international standards in terms of regulating this type of trading in its own jurisdiction.
Trading Safely with Binary options
Canadians have the option of trading with external brokers due to the simple fact that there are no regulated broker in Canda. More needs to be done in terms of regulations in order to encourage the growth of local brokers. This therefore makes most Canadians to be subjected to regulations of other external regulators since most external brokers will operate under the jurisdictions of the countries in which they were registered. Most of these brokers are easily accessible and operate under the approval of jurisdictions in either the US or the European Union.
For safety purposes, it is recommended that traders should ensure that they engage with only licensed, trustworthy and reputable brokers who apply honest trading practices. Licensed operators provide the guarantee that they are operating under specific regulations and are therefore the best entities with which one can trade. Unlicensed operators have the potential of putting traders at risk of fraudulent activity and should therefore be avoided. Focus should therefore be centered on highly reputable binary options brokers who offer a variety of options and who are licensed in their respective area of jurisdiction.