Binary Options Broker News And Industry Updates

Regulators And Regulation Alters Binary Options Landscape

All traders should deal only with trusted binary options brokers that are regulated, but regulation has long been a sticking point for binary options. The industry came to life in the nether regions of the internet where classification and jurisdiction were iffy and brokers were able to operate with impunity. Thankfully that has been changing over the past few years as global regulators take up the mantle of oversight but problems still exist. Many brokers continue to operate outside the bounds of regulation, some legit and some not, making it hard for the average trader to know who to trade with. To combat these issues regulators have created watch lists and issue warnings on a regular basis.

Regulator Watch Lists Get Longer

The two most prolific issuers of warnings are the British Columbia Securities Commission, BCSC, and France’s AMF, Autorite des Marches Financiers. Between the two they have issued hundreds of warnings, the only problem is that they are only aimed at brokers operating in their respective countries illegally and often times list brokers regulated in other parts of the world. The most recent warning from the BCSC, one of Canada’s 13 provincial regulators, was against CentralOption, a SpotOption based broker that is not regulated in any jurisdiction.

According to the CSA, the Canadian Securities Commission, no binary options broker is licensed to offer services in the country but that is not stopping a host of off-shore brokers from accepting Canadian clients. The caveat is that many of the brokers accepting Canadian clients are in fact trustworthy brokers, they just aren’t regulated in Canada.

The French AMF’s Black List is the longest watch list of any, adding 16 new names in June. Along with the warnings is an additional statement which says that the list is not comprehensive, new unauthorized brokers pop up regularly and even those who have been warned against may change their names and websites in order to evade the warnings. The focus of the AMF black list is a bit different from that of the one in Canada as there are regulated brokers operating in the EU and France. This list is targeted at the non-CySEC regulated brokers.

A similar situation is arising in Australia. The Australian regulator ASIC has recently taken up oversight of binary options, legal in the country, with the intention of blocking unregulated brokers from operating there. According to ASIC binary options are classified as a derivative trading vehicle, just like CySEC, and must hold an AFS (Australian Financial Services) license. In their latest warning 8 brokers were added to the watch-list including BossCapital, OptionsXO and other brokers not recommended by BinaryOptions.net. Click here for our list of recommended brokers.

CySEC Suspends License

In other news CySEC has been proactively addressing issues from brokers who fall under their sphere of influence. The latest action is against Air Finance Pro, operator of several popular binary options brands including BuzzTrade. The suspension is due to alleged infractions and non-compliance with reporting requirements that are seen as harmful or potentially harmful to the interests of its clients. Other brands affected include Uptrade7, CFD Royal and Investing Area. The initial suspension is for one month pending further action by the regulator should Air Finance Pro not comply with existing regulation. What this means for Air Finance Pro is that it cannot accept new clients, cannot engage in new trades from existing clients and it may have to return all funds and profits currently held in accounts for existing clients.

In the statement CySEC said this; “The aforementioned alleged violations may possibly endanger the Company’s clients’ interests or the investor interests or generally the regular operation of the capital market as the Company has not been compliant with its reporting/filing obligation towards CySEC.”

Potential fall-out from the decision, aside from a loss of business and damage to the reputation is a sponsorship deal with Portuguese football club Porto. There is no comment yet from Porto.

What This Means For Traders

Binary options will continue to be available over the internet so the responsibility of choosing a good broker lies where it always has, with the traders. What this means for traders is that they must stay abreast of regulation in their own countries as well as in other parts of the world. The best course of action is to find a broker regulated in your country or in a country friendly with yours, if that is not possible then choosing a respected and trusted broker comes down to research and recommendations from other traders. The best place to find these is in a forum dedicated to the subject such as the one here on BinaryOptions.net. Read posts, ask questions and never ever blindly trust what a broker or their salesmen may tell you.

Click here to go directly to the Binary Options Broker Discussions in our forum.