Australian Securities and Investments Commission (ASIC)
ASIC bans the sale of binary options to retail clients (21-064MR)
ASIC made a product intervention order banning the issue and distribution of binary options to retail clients. It took effect 3 May 2021.
ASIC made a product intervention order banning the issue and distribution of binary options to retail clients, taking effect 3 May 2021. The order was to remain in force 18 months, and the order was later extended.
What the Rules Say
ASIC made a product intervention order banning the issue and distribution of binary options to retail clients, which took effect 3 May 2021.
The order was to remain in force 18 months, then could be extended or made permanent.
ASIC proposed extending the order until it is revoked or sunsets on 1 October 2031 (Consultation Paper 362, 26 May 2022). ASIC Corporations (Product Intervention Order Extension–Binary Options) Instrument 2022/779 declares that the 2021 product intervention order (Instrument 2021/240) remains in force until it is revoked. The explanatory statement says that, if not revoked, it will sunset on 1 October 2031.
ASIC's stated reasons: the 'all or nothing' payoff structure; short contract duration (the average contract duration of binary options traded with one provider was less than six minutes); and negative expected returns.
In the 13 months before the ban, between 74% and 77% of active retail clients lost money trading binary options (ASIC, 22-118MR, 26 May 2022).
Scope and Exceptions
The ban applies to retail clients; wholesale clients are not covered.
Civil and criminal penalties apply to contraventions of the order.
How to Check a Firm
ASIC publishes registers, including a Professional registers search and a Public warning notices register.
If a firm does not appear on the relevant register, treat that as a reason to stop and check further before sending money.
Frequently Asked Questions
What restrictions did ASIC introduce on binary options?
ASIC made a product intervention order banning the issue and distribution of binary options to retail clients, taking effect 3 May 2021. ASIC Corporations (Product Intervention Order Extension–Binary Options) Instrument 2022/779 declares that the 2021 product intervention order (Instrument 2021/240) remains in force until it is revoked. The explanatory statement says that, if not revoked, it will sunset on 1 October 2031.
Does the Australian ban apply to wholesale clients?
The ban applies to retail clients; wholesale clients are not covered. Civil and criminal penalties apply to contraventions of the order.
What were ASIC's stated reasons for the product intervention order?
ASIC's stated reasons: the 'all or nothing' payoff structure; short contract duration (the average contract duration of binary options traded with one provider was less than six minutes); and negative expected returns.
Does this page address individual liability?
This page summarises what the regulators' published rules say. It does not address whether an individual could face liability. Seek independent legal advice.
Sources and Official References
- ASIC 21-064MR (1 Apr 2021): https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-064mr-asic-bans-the-sale-of-binary-options-to-retail-clients
- ASIC 22-118MR (26 May 2022): https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2022-releases/22-118mr-asic-proposes-extending-its-binary-options-product-intervention-order
- Explanatory Statement to Instrument 2022/779: https://legislation.gov.au/F2022L01169/asmade/2022-09-05/es/original/pdf
- Search ASIC Registers: https://asic.gov.au/online-services/search-asics-registers/
This page summarises what the regulators' published rules say. It does not address whether an individual could face liability. Seek independent legal advice.
This page is published for informational and legal transparency purposes only and does not constitute financial, legal, or tax advice. Regulations change frequently across jurisdictions. Always consult official financial regulatory circulars (e.g. Bangladesh Bank, BSEC, FCA, CySEC) or qualified legal counsel before engaging in foreign exchange or derivative trading.