The Autorité des marchés financiers (AMF) is the latest regulator to issue a warning about binary options trading.
The Quebe securities regulator Thursday warned investors to be cautious about a firm known as Banc de Binary, which is based in Cyprus and offers an online trading platform for binary options.
The AMF says that Banc de Binary is not registered, and doesn’t have an exemption to solicit investors in Quebec. It also reports that it has received at least one complaint from an investor who traded through the firm’s platform and was unable to recover his investment.
The regulator notes that Banc de Binary does not specifically solicit or target investors from Quebec. Indeed, it reports that the Ontario Securities Commission (OSC) put the company on its warning list last October, and the U.S. Commodity Futures Trading Commission (CFTC) filed a civil complaint in June, charging it with violating U.S. law by soliciting U.S. citizens and operating as an unregistered Futures Commission Merchant. (See Investment Executive, U.S. regulators charge Banc de Binary, June 6, 2013.)
The AMF cautions investors about fraudulent schemes involving binary options generally, noting that users of these platforms can face blocked access to their accounts, refusals to refund investments, identity theft, and the manipulation of software to generate losing trades.
“The currency market is complex and volatile. It is intended for investors who have the knowledge, time and resources to track it. Investors who do not have the knowledge and time needed to trade in this market could incur significant losses,” it warns.