The British Columbia Securities Commission (BCSC), the regulatory body of the Canadian province of British Columbia, has issued a warning notice against binary options broker Redwood Options, a brand of Hampshire Capital Ventures. The entities offer financial services in the province without having the required authorization.
Neither of them is registered to trade in, or advise on, securities or exchange contracts in British Columbia.
Redwood Options operates via the website www.redwoodoptions.com, where it offers a web-based trading platform for binary options on forex currencies, commodities, stocks, and indices. It promises a profit of up to 81% on the investment.
The broker based in Norwich, England, according to the Canadian regulator. However, on its website the brokerage provides an address in Bulgaria.
The BCSC issued in May last year a warning against Hampshire Capital Ventures for operating under another one of its brands – Magnum Options. The brokerage is also included in the warning lists of several other regulators – Bulgaria’s Financial Supervision Commission (FSC) and Canada’s Nova Scotia Securities Commission (NSSC) and Manitoba Securities Commission (MSC), as well as Australia (ASIC).
In binary options trading, investors guess whether the price of a certain instrument would go upwards or downwards within a pre-determined time frame. Once the time is up, the option is deemed expired and the bet is settled. Depending on the outcome, a trader either collects a profit, or loses money. This is a very controversial instrument and an increasing number of countries, especially in Europe, are taking steps to ban it due to its risky nature.
In Canada, capital markets are supervised by provincial regulatory bodies. In British Columbia, binary options are treated as securities. Although this type of investment is not forbidden as in some other countries, there is not a single broker authorized to offer trading in binary options in Canada.
When engaging with unauthorized and non-regulated brokers, traders are putting their investments at higher risk. We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.
This article is for information purposes only.
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