After Belgium Binary Options Ban debate now Quebec AMF Binary Options ban is receiving many comments from the industry players. Some suggest that Binary Options ban is not a necessity. Will regulator amend the scope of the ban?
21 April, AtoZForex – Earlier this year in February, AtoZForex reported that Quebec Autorité des marchés financiers (AMF) has planned certain changes in the regulatory framework in relation to the Binary Options sector activities.
Quebec financial markets regulator decided to follow the example of other global regulators that have imposed some restrictions on the Binary Options firms. Some of the supervisors have completely banned Binary Options business, just as Belgium did. Most of the regulators decided to set particular limitations on the Binary Options advertisement.
Quebec AMF Binary Options ban
In the beginning of February, The Quebec AMF has shared its agenda to make certain adjustments to the Canadian province’s Derivatives Regulation. Such initiative is an attempt to officially prohibit the provision and offering of the particular kinds of Binary Options products to Quebec investors’ community. Moreover, Quebec regulator has commenced the consultation on the proposals from the public. The initial Draft of the amendments to the Derivatives Regulation is now open for a 30-days comment period.
Following the start of the consultation, the AMF President and CEO Louis Morisset has stated:
“Binary options platforms generally promise fast profits which are not paid out to investors. They’re run by people who are acting illegally and embezzling victims’ funds”.
Quebec AMF Binary Options ban faces opposition
However, in March this suggestion met an opposition in the face of the Investment Industry Association of Canada (IIAC). The organization has backed the Binary Options industry, stating that the firms are not “problematic” by themselves. IIAC further stated that the Binary Options should be able to offer their services with the condition of regulation.
In response to Quebec’s AMF suggested ban, IIAC stated that only the unregulated firms appear to be a problem. Moreover, the organization has proposed the alternative solution. IIAC suggested that the Binary Options firms that have the license from the Investment Industry Regulatory Organization of Canada (IIROC) can operate in the market.
Moreover, Quebec’s AMF has received a number of other comments in regard to the Binary Options related initiative. Reportedly, it might not be that easy for the regulator to execute the ban.
Will AMF change the scope of the ban?
One of the key issues that have been discussed in comments to the AMF’s proposition was the scope of the ban. Some of the firms that offer exchange-traded products believe that the ban should not apply to them. Moreover, even though the Montréal Exchange (MX) and Canadian Derivatives Clearing Corporation (CDCC) back AMF’s intentions to protect investors, they believe that the scope of the ban might need a revision.
Another comment by the Canadian Market Infrastructure Committee (CMIC) suggests that the AMF to further clarify the proposed restrictions. The organization states that it is unclear whether the suggested AMF legislation applies to the provision of exchange-traded products.
We will follow with the updates from the Quebec financial regulator as soon as the new official information will be available.
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