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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.
Legal Canadian Binary Options and Brokers for 2020
Important Information For Canadian Traders
Rank | Broker | Offer | Trade Now / Review |
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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:
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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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BINARIUM
Best Binary Broker 2020!
Perfect for Beginners!
Free Trading Education! Free Demo Acc!
Get Your Sign-up Bonus Now: -