Canadian Securities Administrators (CSA)
Multilateral Instrument 91-102 Prohibition of Binary Options
A CSA multilateral instrument, Multilateral Instrument 91-102 Prohibition of Binary Options, came into force on 12 December 2017. Section 2 prohibits trading binary options with an individual, and Section 3 prohibits trading them with a person or company that was created, or is used, solely to trade a binary option.
In Canada, Multilateral Instrument 91-102 Prohibition of Binary Options came into force on 12 December 2017. Section 2 prohibits trading binary options with an individual, and Section 3 covers an entity created or used solely to trade them. Section 4 provides that Sections 2 and 3 do not apply to contracts maturing in 30 days or longer.
What the Rules Say
A CSA multilateral instrument, Multilateral Instrument 91-102 Prohibition of Binary Options, came into force on 12 December 2017.
Section 2 states: "No person or company may advertise, offer, sell or otherwise trade a binary option with or to an individual."
Section 3 states: "No person or company may advertise, offer, sell or otherwise trade a binary option with or to a person or company that was created, or is used, solely to trade a binary option."
Binary option definition under Section 1: a contract or instrument providing only a predetermined fixed amount if the underlying meets predetermined conditions, and zero or another predetermined fixed amount if not.
CSA statement (26 Apr 2017, at proposal stage): "There are no registered individuals or firms permitted to trade binary options in Canada."
Scope and Exceptions
Section 4 specifies: "Sections 2 and 3 do not apply in respect of a binary option having a term to maturity of 30 days or longer."
How to Check a Firm
The CSA's "Are They Registered?" tool helps investors check whether securities industry professionals are required to register in each province or territory.
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 do Sections 2 and 3 of Multilateral Instrument 91-102 prohibit?
Section 2 prohibits trading binary options with an individual, and Section 3 prohibits trading with a person or company that was created, or is used, solely to trade a binary option.
What exemption does Section 4 provide?
Section 4 states that Sections 2 and 3 do not apply in respect of a binary option having a term to maturity of 30 days or longer.
Were any firms registered to trade binary options in Canada?
The CSA stated at the proposal stage (26 Apr 2017) that "There are no registered individuals or firms permitted to trade binary options in Canada."
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
- Multilateral Instrument 91-102 Document (12 Dec 2017): https://lautorite.qc.ca/en/professionals/regulations-and-obligations/derivatives/91-102-prohibition-of-binary-options
- OSC Notice and Multilateral Instrument 91-102: https://www.osc.ca/sites/default/files/2020-10/csa_20171212_91-102_ci_pro-binary-options.pdf
- CSA Statement (26 Apr 2017): https://www.securities-administrators.ca/?p=801
- CSA Are They Registered? Investor Tool: https://www.securities-administrators.ca/investor-tools/are-they-registered/
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.