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Australian Securities and Investments Commission (ASIC) has published a consultation paper in which it outlines its concerns about over-the-counter (OTC) binary options as well as contracts for difference (CFD) investments, such as foreign exchange trading.
ASIC said that the licensed issuers received gross trading revenue of $490m from binary options and $1.5bn from CFDs last year “which can largely be attributed to a combination of net client losses and fees and costs charged to clients.”
ASIC said 80% of clients who trade binary options lose money while 72% of clients who trade CFDs lose money.
ASIC has proposed to ban all Australian-based brokers from having Australian binary options clients. It would also impose stricter conditions on the issue and distribution of OTC CFDs to retail clients.
“For many years ASIC has taken strong action to protect consumers of binary options and CFDs, using the range of regulatory tools available to us. However, we are concerned that consumers continue to suffer significant harm from trading these products,” Cathie Armour, commissioner of ASIC said.
“A complete ban would prevent retail clients from losing money trading binary options. We believe binary options provide no meaningful investment or economic use, and have product characteristics similar to gambling products,” Cathie Armour added.
The Australian market for binary options and CFDs is growing rapidly, with the number of clients more than doubling in the past two years to one million people.
Source: Latest News on European Gaming Media Network
This is a Syndicated News piece. Photo credits or photo sources can be found on the source article: ASIC Proposes Ban on Binary Options
