ASIC has registered the ASIC Corporations (Product Intervention Order—Binary Options) Instrument 2021/240 which prohibits issuing and dealing in over-the-counter binary options in relation to retail clients and requires binary option issuers to take reasonable steps to notify their past retail clients of the terms of the instrument.

In making the instrument says it is satisfied that the financial product has resulted in, or will or is likely to result in, significant detriment to retail clients.

The instrument applies on and from 3 May 2021.

The order provides that:

• a binary option provider must not issue a binary option to a retail client;
• a person who carries on a business of arranging for the issue of binary options must not arrange for the issue of a binary option by a binary option provider to a retail client;
• a person who carries on a business of applying for, or acquiring, binary options as an agent, must not apply for, or acquire, a binary option from a binary option provider on behalf of a retail client;
• a person who carries on a business of arranging for persons to apply for, or acquire, binary options must not arrange for a retail client to apply for, or acquire, a binary option from a binary option provider;
• a binary option provider that has issued a binary option to a retail client in the period of 12 months before commencement of the instrument in circumstances which would be prohibited by the instrument (assuming that the issue occurred at a time when the prohibition was in force) must take reasonable steps to notify each such retail client of the terms of the instrument as soon as practicable and in any case within 15 business days after commencement of the instrument.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.