Today ASIC announced that it will be banning binary options trading in Australia. For now, the ban on binary trading concerns only retail investors. Institutional investors are not affected by these new changes, yet. The Australian Securities and Investments Commission reviews of both 2017 and 2019 disclose that some 80% of all Aussie binary options traders lost money doing it.
The watchdog stresses the importance of client safety and names the main reason for the ban to be a reduction of financial losses by the Australian retail investor community. The ban on distribution and issuance of binary options trading services (to retail users) will take full effect from the 3rd May.
The agency has estimated that around $490 million have been lost by retail traders in binary options in 2018 alone. Since then ASIC had taken action to reduce the binary trading market in the country, which produces enormous results. ASIC issued an official warning against the provision of unauthorized binary options trading services to Aussie users in foreign jurisdictions. The response was massive, and in 2019 the net losses had been reduced to $6.7 million.
The restriction will remain active for 18 months, however, ASIC has the power to make it permanent after the preliminary 18 months.
Meanwhile, ASIC recently introduced new retail CFD trading restrictions, that are sure to leave many smaller firms struggling in the market.