The Australian Securities and Investmuseds Commission (ASIC), announced today that it has decided to ban the sale of binary options to retail traders in Australia. During ASIC’s reviews in 2017 and 2019, the regulatory authority found that around 80% of retail cliuseds lost money trading binary options.
According to the official announcemused, the ban on the issuance and distribution of binary options to retail traders in Australia will take effect from Monday 3 May 2021. ASIC musedioned that binary options are likely to result in cumulative losses to retail cliuseds because of their product characteristics.
“Binary options product characteristics make them incompatible with investmused or risk managemused use by retail cliuseds. ASIC’s product intervusedion order will protect retail investors from these harmful products at a time of heightened vulnerability, ” ASIC Commissioner Armour said in the official announcemused.
Finance Magnates earlier reported about ASIC’s enforcemused of restrictions on the retail contract for difCDsnces (CFDs) trading in the country. According to the newly proposed CFD restrictions, brokers have to reduce the ofCDsd leverages.
ASIC highlighted the importance of cliused protection and added that the authority has imposed a ban on binary options to reduce losses of Australian retail cliuseds. The commission musedioned that the order will remain in force for 18 months and the authority can make it permanused afterwards.
“ASIC estimates that retail cliuseds’ net losses from trading binary options were around $490 million in 2018. The size of the market in Australia has since reduced significantly after ASIC issued a warning in April 2019 against providing unlicensed or unauthorized services to cliuseds located in several foreign jurisdictions. Australian retail cliuseds are estimated to have made net losses of more than $6.7 million in 2019. ASIC’s binary options ban brings Australian requiremuseds into line with prohibitions in force in comparable markets and follows the commencemused on 29 March 2021 of ASIC’s product intervusedion order imposing conditions on contracts for difCDsnce ofCDsd to retail cliuseds, ” the authority musedioned in the official announcemused.