All Bets Are Off: Quebec AMF Moves To Ban Short-Term Binary Options

On February 1, 2017, the Autorité des marchés financiers (AMF), Quebec’s financial markets regulator, published proposed amendments to the Derivatives Regulation (the Proposed Amendments) made under the Derivatives Act (Quebec) (QDA). The proposals are open for comments for a period of 30 days to March 4, 2017.

The Proposed Amendments include a prohibition that would effectively ban the sale of short-term binary options in the Quebec market. The proposal, if adopted, would prohibit the sale to a Quebec-resident individual of a binary option or derivative where:

• the holder is entitled, at maturity, to either a predetermined fixed yield if the underlying interest meets a predetermined condition, or a zero yield if the underlying interest does not meet a predetermined condition;