The Binary Options Regulation Coming To Canada

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The Binary Options Regulation Coming To Canada

As Regulators Crack Down The Investment Industry Pushes Back

Canada’s regulators have long been counted among the most hostile toward binary options and there is good reason. The nations citizens have been targeted mercilessly by binary options scams and fraud leading to the suicide of at least one man. The problem is not that binary trading is illegal in Canada because it’s not, it is because there are no legally registered and operating brokers which creates a two-fold problem. The first problem lies with those who legitimately want to trade. They have nowhere to go so must seek out the off-shore brokers and hope they find a reputable one. The second lies with the public in general. Many of Canada’s citizens, those with no business trading binary options, are becoming entangled with fraudulent marketers who operate outside the law and are giving the entire binary options industry a bad name.

Quebec upped the ante this year when they announced some proposed changes to their regulatory structure in order to completely ban binary options. The good news is that there was some push-back within the government which resulted in a toned down version of the original law. The new proposal would ban the sale of binary products which met three conditions. These are 1) if the trade is an all-or-nothing proposition 2) the buyer cannot sell the option contract before expiry and 3) it has a duration of less than 30days.

In response to these moves the Canadian Securities Administration created a new task-force to fight binary options fraud (remember, each of Canada’s provinces has their own regulator as well as national level regulators). The first thing they’ve done is create a new website for the purpose of educating consumers in the fight against scam brokers. The bad news is that their over-the-top approach has painted the entire binary options industry as a fraud which is just not the case. On a lighter note, the British Columbia Securities Commission just released a video entitled “I’m coming to scam you”. It is a humorous look at what scam artists are thinking and intended to help the public spot fraud.

There Is Opposition To The Anti-Binary Movement

There is opposition to the anti-binary options movement that is building in Canada. The IIAC, the Investment Industry Association of Canada, responded to the CSA and Quebec AMF with a letter outlining their position on why binary options should be offered legally through regulated brokers. They point out that binary trading is not a problem in and of themselves, it is the scam brokers who take advantage of the internet to use binary options to commit fraud that are the problem. Their stance is that by offering a legal source of trading through regulated brokers it will help eliminate the risk of fraudulent activity by squeezing the scams out of the marketplace.

The bottom line is simple to read. No matter what the Canadian regulators choose to do they will not be able to stop the onslaught of binary options scams. This has been proven all across Europe as one country after another reports their inability to curb fraudulent activity. The only answer, in this traders humble opinion, is for international regulators to set standards for trading in their countries, allow those who want to trade to do it in regulated arenas, continue to warn the public of marketing scams and make scamming so hard for the bad guys they can’t operate. We’ll see what happens. Until then trade on and trade safely.

Important Information For Canadian Traders

Canadians wishing to get involved in binary options are wondering if it’s legal to trade binary options in Canada and whether legal brokers operate within the country. This subject matter is rather confusing because there are multiple and often conflicting sets of rules. Deducting whether binary options are legal in Canada can be hard when looking at the existing rules.

The rules are confusing because they don’t stop Canadian binary options traders to use the services of brokers from other countries. And, despite the fact that there is not a single direct reference to binary options being illegal in the Canadian law, the authorities note that Canada does not have licensed and regulate binary options brokers.

Couple of years ago, Canadian traders had lots of options for binary options brokers located offshore. Brokers from fairly reputable jurisdictions like Japan or Cyprus have always welcomed Canadians. Canadian traders also turn to brokers that are licensed in not so reputable licensing jurisdictions like St. Vincent & Grenadines, British Virgin Islands and Belize. All in all, Canadians have very legitimate and good options where to trade.

Frequently Asked Questions

Here you can find answers to frequently asked questions concerning the legality of binary options in Canada.

Can the government go after Canadian binary options traders?

Do Canadians have to be concerned about singing up with an offshore broker?

Can I find a list of reputable brokers?

Can a broker acquire a license in Canada?

Can I seek help from the Canadian financial governing bodies?

What is the national financial authority?

What assets should Canadians trade?

Are there any hints that Canadian authorities will regulate the binary options market in Canada?

The Aspects on Which You Should Base Your Broker Selection

There are many pros and cons to look for in a broker, but five aspects are the key aspects you should consider when two brokers are tied for your money. In case you can’t decide between two good brokers, look for the following.

Deposits and Withdrawals

You are getting involved in binary options to make a profit, right? Therefore, it is important to look for a broker that has minimal or no fees regarding transactions. Also, it’s recommended to go for the broker that offers transactions in Canadian dollars so that you don’t have to lose money on the currency exchange.

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Types of Options

The average binary options trader is interested in a couple of options even though the broker offers dozens of trading options. In general, if you want to grow your profits look no further than brokers that offer options like Doubling Up, Rollover, Boundary, No Touch, One Touch, High/Low etc.

Website

A user-friendly platform as well as the option to use a demo account first is important too. Demo accounts help traders to get a good sense of the platform and the entire service. It’s like a test run before deciding to deposit real money and start trading. Go for the brokers that offer demo accounts, test their platform and then decide.

Tools and Resources

The more you learn, the better trader you are. Although you can find resources all over the internet, a broker that has a rich library of learning resources is a recommended. Having all the important information on one place can facilitate your learning process.

Customer Service

Prompt 24/7 customer service response is important when dealing with an offshore broker. Brokers usually offer live chat or telephone service to address problems quickly. Also, a broker needs to have a reputable and professional customer support team, which can be easily ascertained by looking for other trader’s opinions.

How To Start Trading

Start with a small capital first because binary options don’t require much to get started. That is one of the beauties of binary options trading. A you learn and you improve your trading skills, you will want to risk higher amounts of money, which is a very natural temptation in a trader. If your budget allows it, do it. But, remember that this means increased potential for loss. The best practice here is to always evaluate how much you can afford to lose.

When you have decided how much money you can set aside to get started, decide whether you are going to accept a bonus. Brokers love to give bonuses to traders, and usually these are very helpful as a budget boost. But, some bonuses have been created as drawbacks. The drawback is usually spotted when you want to withdraw your profits only to see that you haven’t met the terms & conditions set out for the bonus. Such bonuses are not worthwhile at all.

Canadian Traders Guide

Trading binary options in Canada has become an increasingly popular choice for many investors. With many international brokers now fighting for their share of the market, they turn to markets in which they can attract investors and grow their user base. It is no exception here, and many brokers have become focused on this country as a growth area.

So what does this mean for Canadian traders? How easy is it to invest in the best binary options and which broker should you choose?, compared to countries like Russia, Japan and the USA where regulations and legalities of options trading are clear, Canada is considered to be more of a “grey” area.

Currently, there are no laws specific to binary trading; Canada has no specific regulations in place. With all this in mind, we feel comfortable to recommend our list of reviewed and tested brokers to Canadian residents. We’re confident you’ll find a great broker that will keep your money safe, and you protected while you trade online.

In this article, you will learn:

    The brokers best suited to your needs What local payment methods are accepted Taxes and fees that apply to CA residents

Traders in Canada

Now while some traders prefer to trade with a local broker that operates in their country, you would be hard pushed to find a genuine Canadian broker that is regulated by the Canadian authorities. If you do come across a broker claiming to be Canadian based, then you should avoid them at all costs.

Without Canadian regulation, the local trader doesn’t get protection, so it becomes even more important to do your research and find a broker that is genuine and offers everything that you need including:

Mobile Trading

How do you conduct your daily transactions like shopping and banking? Many of you probably do the majority of things from a phone or tablet. That is why it is critical for brokers to offer a good mobile experience for Android and iOS users.

Deals And Incentives

Welcome bonuses are great for either trading without risking your own money or for building up funds. The no deposit is perfect for new traders as it allows you to try trading before you deposit any money.

Diverse Trading Assets

What sort of trade types are you interested in using? Do you want simple call/put options or are you looking for more complex trades? In addition to this check out what assets the broker offers and if they provide enough to meet your trading requirements.

Good Customer Support

A good broker offers excellent customer support in many formats. Usually, the broker will have a live chat assistant as well as phone numbers for various countries and email support as well. Ask them a question and see how long it takes to respond. You will find many reliable brokers from our list of recommended and reviewed companies.

The lack of Canadian brokers is due to there being no official classification as to what binary trading is in terms of whether it is gaming or not. A lack of regulation doesn’t mean that Canadians should avoid trading; it just means that they should exercise caution when choosing a broker to invest your money.

You will find many reliable brokers, from our list of recommended and reviewed companies, who operate and have licences in countries like Cyprus and the UK. Our broker recommendations will help you discover which international broker you can rely on and give you the confidence to invest with them.

Rank Broker Offer Trade Now / Review
Trader Broker Asset Profit

Broker Fees And Tax

Taxes and fees will have an impact on your bottom line, so it is important to consider what fees you will pay and what costs you will incur. Before we look at tax let’s first look at the expenses you are likely to face:

    Commission for successful trades. The commission is deducted at source and paid before you receive your payout Currency conversion fees. If you are going to be trading with an international broker, in a foreign currency, you may be charged conversion fees by your payment provider Transaction fees for using your payment method. Usually a percentage of what you deposit or withdraw Deposit and withdrawal fees charged by the broker for using specific methods of payment

Focusing now on the legal matters related to binary options trading, Canada has the usual laws to abide. The information that we provide here is general, and any tax enquiry should be taken up with your accountant, but we can tell you that any profit made from binary trading is income. Income is the same in any country that has tax laws. If you are an individual, then you will report the profit you have made, taking into account any losses, in the usual way. If you are a corporation, then you may be liable to pay less tax on binary trading profits.

To ensure that you know what to declare to the Canadian tax department it is important to keep records of expenditure, losses and profits and to make sure that you have all the information to hand including which tax year it falls into it. If you haven’t been keeping a record, it is essential to start and then work back through what you can to bring your documents up to date.

Canadian Licencing

When looking at whether it is illegal or not to trade binary options, Canada has stated it is unlawful for an international broker to solicit their service to Canadian citizens as it is with the USA. There is no Canadian regulation or legislation rules that apply specifically at this current time. Canadian binary options trading is unclassified, and therefore there are no rules that apply.

For this reason, it is of the utmost importance that Canadian traders make sure they choose their broker wisely. Any money invested is done so at the traders own risk, and if any issues arise from trading with a poor choice of broker, there is nothing that will protect you. Without regulation, the risk is entirely at the feet of the trader.

In March 2020 the Canadian Securities Administrators (CSA) warned investors to exercise caution when trading. With there being such “easy pickings” as it were it became increasingly popular to solicit platforms that weren’t always legitimate. Without proper guidance and information knowing which brokers to trust was not always easy.

Unlike in most countries where the law is clear about the classification of binary trading, Canada does not have strict rules that apply. In many countries, it falls under securities or gaming. Here they are neither. To minimise the risk of losing money through companies who claim to be real, we strongly advise studying the information available to you on our website through our reviews and recommendations.

There are some checks that you can make yourself like looking at where they are based, what licenses they hold and whether they are licensed to trade internationally. We have already made these checks on your behalf so you can rest assured that choosing a broker recommended by us is safe, legal and legitimate.

Trading binary options in Canada has become an increasingly popular choice for many investors.

How we Recommend Brokers

There are many factors that we consider when recommending and reviewing various services. This level of research, if undertaken by the trader, would take an extreme amount of time and probably have you wishing that you had never started. The information that we provide comes from our team of experts and their extensive research. Their knowledge of the market place means they know what to look for and what is essential when trading online.

So where do we start? Well, most importantly we make sure that the broker has all the correct licensing. We only recommend reputable, regulated and licensed Canadian brokers to you as we want your experience to be the best. Once we establish the legitimacy of the broker, we then look at their offering. Now, this doesn’t just include the types of accounts and incentives that they offer. Our views are fully rounded to include the trading experience as well, so we only show you the best Canadian binary options brokers.

We analyse what it is like for a trader to trade on the broker’s platform. We also look at their desktop trading platform, their mobile offering and whether they have a mobile app available for both Android and IOS. We recommend many companies that have the best offerings and provide a fair and rounded comparison for you to make an informed decision.

Frequently Asked Questions

Is binary trading in Canada legal and safe?

It is perfectly legal to trade binary options in most countries including Canada. Most of the brokers that allow Canadians to purchase with them are licensed and regulated in Europe.

Do I need to pay fees and taxes on my profits?

If you make any profits, you should pay tax. While it is not up to the broker to keep records and declare them to the Canadian government, it is essential that you keep records.

Can I test brokers before trading with real money?

Many big names offer incentives to stay ahead of the competition; therefore, you will find most of them provide a demo account for new traders to try trading for free.

Is it easy to make deposits and withdrawals?

You’ll have to provide identification but once you have done this making deposits and withdrawals is very straight forward. Any earnings withdrawn will be paid back to the same method that was used to deposit initially.

Can I trade using my mobile or tablet device?

Most things are done on the go on a mobile device today, online banking, shopping, booking holidays and yes, options trading too.

Shelly is proud of her current position as Head of Brand for a well-known organisation that owns several brokerages in the trading sector. She’s consulted for us since 2020 and readers can benefit from her insider knowledge of how brokers work.

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