The Binary Options Guru: Your Reviews of signals, brokers & robots

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It was a major announcement for the binary options industry, especially coming from the most popular regulator in the world. Over the past year, CySEC along with other financial regulators have toughened laws governing the Forex and binary options industries. This was a response to the binary options basics what are regulated by cysec claims of frauds in the industries by aggrieved clients, especially in the binary options industry.

We have already seen changes in the Forex industry that have limited the amount of leverage offered to clients and the eradication of trading bonuses. MiFID II also proposes a lot more changes, all of which aim to make these over-the-counter industries a bit more centralized. If the Cyprus regulator were to impose a total ban on binary options, it certainly would affect the industry.

It also would not be the first regulator to put a ban on binary options. Belgium and France have already banned all over-the-counter markets including the Forex market. Netherlands have banned all forms of advertisement on binary options and Forex. These are all part of a global war on binary options that CySEC has suggested it may join. Being the most popular regulator of binary options, a ban on the financial instrument can cripple the entire industry.

However, it will certainly not kill the industry. When Netherlands banned the advertisement of binary options and Forex, the action only drove the brokers underground. Despite the ban, brokers can still sign up clients based in Netherlands. Since the industry is decentralized, it is virtually impossible to completely shut it down.

Moreover, a ban could have a negative effect in that unregulated brokers take the opportunity to fill the gap left by the regulated brokers. Therefore, a ban on binary options by Binary options basics what are regulated by cysec may leave the traders open binary options basics what are regulated by cysec solicitation by unscrupulous, unregulated brokers.

A better approach would be through stricter regulation, as the CFTC did. Following an overhaul on laws governing over-the-counter financial instruments through Dodd-Frank, the CFTC and SEC imposed tougher laws on the industries that scared most brokers away. Through keen supervision and tough penalties, cases of fraud were reduced, leaving only the most trustworthy brokers in operation.

Right now, there are only 2 regulated binary options brokers licensed in the US, and there are few cases of fraud.

The good news is that they have not determined to ban the industry, yet. As the chairperson of CySEC said, they are still in consultation, probably even with some of the largest binary options brokers. If these brokers and the regulator can agree on more favorable terms, the industry may remain active, possibly even thrive, while still protecting the traders.

Stay up to date with the financial markets everywhere you go. CySEC cracking down on the industry Over the past year, CySEC along with other financial regulators have toughened laws governing the Forex and binary options industries. How could a complete ban on binary options affect the industry? Cyprus has become It also would not be the first regulator to put a ban on binary options.

Comments 1 comment s Click here to cancel reply. Leave a comment jesusrcc. Banning binary options instead of looking for ways to force brokers to comply with regulations and to spread information about unregulated brokers to future traders, looks to me the way to avoid the consequences of their own incompetence. Get the most recent news at your inbox Stay up to date with the financial markets everywhere you go.

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CySEC has long been the leader in binary options regulation. They were the first to take up regulation of spot style European binary options and continue to lead the field. While regulation is a good thing, the agency has long been criticized for how they handle the industry, the requirements for regulation and the myriad gray areas in which brokers, marketers and service providers continue to operate.

In response they have taken on hard line approach that many see as a good thing for the industry. One of the many issues impeding the advancement of binary options trading is the method in which call-centers operate.

For the most part, regulated brokers use third party marketing agencies to handle advertising and client acquisition. These centers can be but are not always located outside of Cyprus and the EU and use untrained, unlicensed employees to reach out to clients. Complaints include misleading clients to the risks of trading and high-pressure tactics used to compel deposits. Countries such as Israel have outright banned the operation of brokers in their jurisdiction because of this, others like France and Canada actively warn against unregulated and fraudulent brokers.

This is when a CySEC regulated broker uses a broker registered, headquartered or regulated in another country to draw clientele, trade and provide liquidity for trading. The practice is allowed by CySEC and EU law and only causes problems when the 3 rd party broker in question is regulated in a manner not consistent with the CySEC framework or is not regulated at all.

The thing to remember is that binary options are legal in the EU. Brokers now face fines up to 1 million Euros for non-compliance. Similar requirements have also been proposed for the use of market makers. Earlier this year CySEC revealed some changes brokers will have to make in order to remain compliant. For the most part, the brokers are pleased with the new rules and, in fact, some brokers were already moving in that direction.

The IQ Option spokesperson went on to say that the new rules will force a consolidation in the industry. The smaller brokers and the scams will not be able to keep up with the changes leaving only the larger, more established and more trustworthy brokers behind. Technology providers are not immune to the changes either. Most brokers are white labels of top platforms like Tech Financials, SpotOption and Tradologic who will also have to comply with the changes.

Tech Financials, the first publicly traded binary options platform provider, executive director Jeremy Lang believes the changes are good for the traders and the industry.