ASIC’s binary options ban extended until 2031

ASIC has extended its product intervention order banning the issue and distribution of binary options to retail clients until 1 October 2031.

Since it came into effect on 3 May 2021, ASIC’s ban has been fully effective in preventing retail clients from losing money trading binary options in Australia. ASIC’s extension of the product intervention order ensures binary option protections in Australia remain in line with those in force in comparable markets overseas.

This is a media release from Australian Securities & Investments Commission (ASIC). It was originally published on 5th September, 2022.

ASIC has today released Report 736 Response to submissions on CP 362 Extension of the binary options product intervention order. The report summarises ASIC’s analysis of the impact of the order, using data from five licensed binary option issuers. It highlights issues raised in submissions to Consultation Paper 362 Extension of the binary options product intervention order and details ASIC’s responses to those issues.

In the 13 months to 3 May 2021, before the ban took effect, ASIC found that retail clients incurred significant aggregate net losses trading binary options. For example:

  • 74–77% of active retail clients lost money trading binary options
  • retail client accounts made net losses of $14 million in aggregate
  • loss-making retail client accounts made net losses totalling $15.7 million, while profit-making retail client accounts only made net profits of $1.7 million.

ASIC Deputy Chair Karen Chester said, ‘Binary options are harmful, high-risk financial products resulting in millions of dollars in losses for retail investors before our ban. Extending our binary options ban until 2031 ensures this important protection for retail investors will continue.’

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