With its recent ban on retail binary options proving effective, the Australian Securities and Investments Commission (ASIC) said it will extend the prohibition until 2031.
A report analyzing results of the regulator’s May 2021 order banning the issue and distribution of binary options to retail clients found that the ban has been “fully effective” in preventing retail investors from losing money.
Prior to the ban, ASIC found that between 74% and 77% of retail investors who traded binary options lost money, with net losses in the 13 months preceding the ban totalling A$14 million.
Given its findings that the intervention protected investors, ASIC decided to extend the ban until Oct. 1, 2031.
“Binary options are harmful, high-risk financial products resulting in millions of dollars in losses for retail investors before our ban,” said ASIC deputy chair Karen Chester in a release.
“Extending our binary options ban until 2031 ensures this important protection for retail investors will continue.”
In 2017, the Canadian Securities Administrators (CSA) banned binary options trading in Canada amid similar concerns about retail investor protection.