Canadian Securities Regulators Announce Prohibition Of Binary Options

Securities regulatory authorities for all Canadian jurisdictions, save for British Columbia, (the Participating Authorities) announced the implementation of Multilateral Instrument (the Instrument) and Companion Policy 91-102 on the Prohibition of Binary Options on September 28, 2017.

Binary options are defined in the Instrument as a contract or instrument that provides for only a predetermined fixed amount if the underlying interest meets one or more predefined conditions, and zero or another predetermined amount if it does not. Essentially, this definition captures a range of products that are based on the outcome of a yes/no proposition, also referred to as fixed-return options, digital options or all-or-nothing options. The return is based on whether an underlying asset, event or value meets one or more predetermined conditions as specified in the contract or instrument, during the time period specified therein. The binary options are exercised automatically once