SEC restriction against trading foreign options?

D

d0rian

None of the brokers I've asked appears to allow American customers to buy options that trade on foreign exchanges. E.g. Air Canada (AC) trades in Canada and has an option chain that trades on the Canadian (Montreal) exchange, but as far as I can tell, there's no way for me to trade those options.

I've been told there's some sort of SEC restriction against buying foreign options(?) Can someone here can point me in the right direction. Is there a hard and fast restriction against investing in foreign options and if so, where specifically is it enumerated?
 
I don't think there is such restriction, but SEC simply requires that any investment instruments issued/offered/promoted to US investors are registered with the SEC and go through an IPO-like process. AFAIK foreign options are issued by foreign option exchanges and they have no interest in going through SEC registration to promote their options to American investors. It's probably expensive, time-consuming, requires tons of paperwork, and possibly needs to be done for each option or each batch/expiration date, etc.
There may be some exceptions for investment firms, as well as exceptions by CFTC that allow Americans to trade options on foreign futures.
 
I thought you are living in the land of the free, the American dream, civil liberties? Must have gone away for some reason. Last time I checked citizens of most other industrialized countries can trade foreign options. And cash fx. When will ordinary citizens start to rise up and assassinate the elites who limit life for everyone?
 
GRULSTMRNN said:
I thought you are living in the land of the free, the American dream, civil liberties? Must have gone away for some reason. Last time I checked citizens of most other industrialized countries can trade foreign options. And cash fx. When will ordinary citizens start to rise up and assassinate the elites who limit life for everyone?
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Freedom is an illusion when dealing with governments. We’re being chased by the IRS wherever in the world we are, while being “protected” by our government from doing something stupid like buying a foreign option, or using too much leverage.
But not sure if Europe is doing better with their continually growing regulation and decreasing leverage. Same with Australia. Freedom doesn’t really seem winning anywhere at the moment.
At least we’ve got Mr Trump who is deregulating everything he can :)
 
Great - now we'll be singing Oh Canada. Serious answer - almost nothing is restricted on the Securities side for BDs and Institutions. Ain't really totally the SEC. For the options to be approved here the SEC would require a reciprocal regulatory agreement - we have one for equities, with some limits on small companies and many new issues. If the Canadian Securities Admins wanted them tradeable here all they would have to do is sign the agreement. They did it for stock and we did it for both stock and options. Same questions come on to forum every few weeks and the song remains the same. OP posted this a couple of years back - call the Canadian exchange and urge them. The ball is in their court and if enough people requested - they might get off their asses. Then again it might be a matter of $$.
 
Would love to hear one single reasonable argument why banning foreign listed/exchange traded options is putting an American more at risk than fantasy football bets, Las Vegas, or out of the money AMZN options.



guru said:
Freedom is an illusion when dealing with governments. We’re being chased by the IRS wherever in the world we are, while being “protected” by our government from doing something stupid like buying a foreign option, or using too much leverage.
But not sure if Europe is doing better with their continually growing regulation and decreasing leverage. Same with Australia. Freedom doesn’t really seem winning anywhere at the moment.
At least we’ve got Mr Trump who is deregulating everything he can :)
More...
 
And that is where things went wrong. SEC and CFTC should have never received the mandate to regulate US citizens, their one and only job ought to be to regulate products that are listed/traded domestically in the US. There also is no tourism police that tells us which country we are allowed to travel to and where not. Yet hotels and tourism is regulated inside the US.

Moral, as long as the lemmings take the bat up the ass nothing will change, it will rather get worse. It takes an uprising to fight off the locusts and parasites that have become middle men and bite a small percentage out of every transaction we make with the rational that it costs money to regulate us, something we never asked for in the first place.

IB_CAM said:
Some firms allow large institutions and/or those with QIB status to trade foreign options, as the thread above suggests. Here is a previous thread which touches on the same subject.

https://www.elitetrader.com/et/thre...-trade-foreign-equity-or-index-options.99451/
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All they have to do is ask for the date - agree to the surveillance agreement - and they probably get it approved.
 
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