ASIC Corporations (Product Intervention Order—Binary Options) Instrument 2021/240 (Cth)

ASIC Corporations (Product Intervention Order—Binary Options) Instrument 2021/240 I, Oliver Harvey, delegate of the Australian Securities and Investments Commission, being satisfied that binary options (as defined in the following legislative instrument) are a class of financial products that: (a) is available for acquisition by issue to persons as retail clients; and (b) has resulted in and is likely to result in significant detriment to retail clients; make the following legislative instrument.

Date 1 April 2021

Oliver Harvey

Contents

Part 1—Preliminary 1 Name of legislative instrument 2 Commencement 3 Authority 4 Interpretation Part 2—Order 5 Prohibitions on dealing in binary options in relation to retail clients 6 Binary option providers to notify retail clients

Part 1—Preliminary

1 Name of legislative instrument This is the ASIC Corporations (Product Intervention Order—Binary Options) Instrument 2021/240.

2 Commencement This instrument commences on the day after it is registered on the Federal Register of Legislation. Note: The register may be accessed at www.legislation.gov.au.

3 Authority This instrument is made under subsection 1023D(3) of the Corporations Act 2001.

4 Interpretation (1) In this instrument: Act means the Corporations Act 2001. binary option means: (a) an arrangement that is an over-the-counter derivative in relation to which the following apply: (i) the parties to the arrangement are: (A) a person (binary option provider) who carries on a business of offering to issue, and issuing, derivatives of that type to other persons (holders); and (B) a holder; (ii) an amount is paid or payable by the holder to the binary option provider in consideration for the binary option provider entering into the arrangement; (iii) under the arrangement, a condition (condition) is specified in relation to the value or amount of any of the following at or before a specified time (expiry time): (A) an asset (including a financial product or a cryptoasset); (B) a rate (including an interest rate or an exchange rate); (C) an index; (D) a commodity; Note: For example, the condition may be that the value of a share exceeds a specified value at a specified time. Alternatively, the condition may be that the value of a share exceeds a specified value at or before a specified time. (iv) if the condition is satisfied and the arrangement has not been terminated earlier, a predetermined fixed amount, or no amount, is payable by the binary option provider to the holder; (v) if, at the expiry time, the condition has not been satisfied and the arrangement has not been terminated earlier, a predetermined fixed amount, or no amount, is payable by the binary option provider to the holder; and (b) without limiting the scope of paragraph (a), includes such an arrangement where: (i) the holder has, or may have, a right to terminate the arrangement before the expiry time; and (ii) if the arrangement is so terminated, the binary option provider must or may pay an amount to the holder (whether or not the amount is a predetermined fixed amount and whether or not the holder has a legally enforceable right to such a payment). binary option provider: see the definition of binary option. cryptoasset includes cryptocurrency. financial product means either of the following: (a) a financial product (within the meaning of section 761A of the Act); (b) an ASIC Act financial product (within the meaning of section 1023B of the Act). over-the-counter in relation to a derivative, means a derivative that is not able to be traded on a licensed market. terminated in relation to a derivative includes the derivative being closed out. Note: Unless a contrary intention appears, a term that is defined in section 761A of the Act has the same meaning in this instrument: see sections 761A and 761H of the Act. (2) For the purposes of this instrument, a reference to offering to issue a derivative includes a reference to inviting an application for the issue of the derivative.