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Binary options regulators have had a busy year; warnings, new regulators, expanding US markets and more. Are you up to date with the latest new?
Read on to be sure! It has been a busy year for binary options regulators. Not only have we seen an upsurge in warnings there are new regulators on the scene with expanded focus and, in some cases, increased cooperation. This is at once a good and bad thing for binary options and traders like us. On the one hand the industry is getting safer. Your deposits as well as your profits are more protected than ever; segregated accounts and third party oversight account for that.
On the other it means that some jurisdictions are clamping down on trading in general, making it harder for some of us to access the best platforms and brokers, or any brokers at all. The litany of warnings we saw in did not end with the start of the new year. The thing to remember about each of these warning lists are that they are location specific, as in, they really only pertain to the exact jurisdiction from which it was issued.
Many of them are in fact CySEC regulated. The complaint, they are not regulated in Canada, is an echoe of what other regulators are saying; these brokers are not regulated to operate here. Other infractions that regulators are responding to are aggressive marketing tactics, cloning and false claims of regulation.
Marketing tactics include high pressure sales pitches along with guaranteed trading tips and broker managed accounts, the first pushes clients into investments before they understand their true nature, the second two presenting serious conflicts of interest. Cloning is another practice regulators find misleads traders; it is when a shady broker uses a name like JPMBinary Options to imply it is associated with the international investment bank JP Morgan.
The most serious infractions though are when brokers claims to be regulated when in fact they are not, or claims to be regulated by shadow regulators created solely for the sake of misleading the public. The regulator launced a new website in to help spread the word.
Remember, in the US it is against the law for unregistered brokers to advertise to and solicit clients but not against the law for citizens to join a broker and trade, a gray area of regulation and source of much confusion.
I applaud their effort but must say it falls far short of the mark. In addition to the RED list another US regulator has recently joined the regulatory fray, issuing warnings of its own.
The interesting thing about the warning is that FINRA accepts binary options trading , the point is to caution investors about the risk, and the chances for fraud. The urge US traders to be wary of off-shore providers, not to avoid them, implying their acceptance of the burgeoning international trade. You may have already noticed but SpotOption powered brokers accepting US traders have been closing their doors.
This trend came to a head over the summer as the last of them finally quit accepting them. Regardless, a message received from CherryTrade clearly stated they were closing their doors due to compliance with SpotOption. SpotOption trading is already available on the Cantor Exchange trading website , more brokers are expected to follow in the 4 th quarter of or early Regulators are beginning to cooperate more, especially in the EU.
Agencies in member countries are now accepting registration of binary options brokers regulated by CySEC. CySEC regulation was the first and most prominent regulatory body, undertaking the task in , but its jurisdiction has been heavily questioned. The stipulation is that the businesses must register in each of those nations as required. The catch is that not all EU nations were willing to accept to binary options as financial tools, and some did not even take notice until recently.
If simply regulating brokers was not enough, regulators in the UK are still on a manhunt begun earlier in the year. Several FXWorld employees, including Canning and trader Gary Andrews, had already been suspended from Rabobank for forex fraud and price fixing. Canning is suspected of residing in Dubai and has yet to apprehended by police.