Binary options are gaining acceptance around the world yet the fractured nature of the regulatory scene is causing confusions and headaches.
Change Is Afoot In The Realm Of Binary Options Regulation
Change is in the air. Regulators around the world are standing up to take notice of binary options. There are warnings, new regulators and a new look at some of the laws governing the way binary options are treated. Some of the attention is bad, some unwarranted but all leading to one thing... the growing potential for a global standard in binary options trading similar to what we have with forex and futures trading. The trouble with the regulatory framework we have today is that it is very localized. Not all countries treat these options the same, some call them bets, others call them speculations with the result a jumble of brokers, platforms and countries with a vegetable soup of regulatory agencies ranging from the CFTC to the FCA, FSA and CySEC.
The most visible facet of the regulations picture are the growing number of warnings and crackdowns. Not a week goes by without some new broker getting banned or receiving a warning in a country it is not welcome. The first date back to 2008 and before, stemming from the US CFTC and SEC, the first to create a legal framework for binary trading. Since then other countries including Canada, Australia, New Zealand, Japan, France, The Netherlands and England have all gotten on board with binary options regulation. Many warnings come from Canada, where binary options are legal so long as the company is registered with the appropriate authority. Most recently France, in cooperation with the Netherlands and Belgium, has been on a rampage. The bloc are actively rooting out bad brokers, scam brokers, white labels and clones of all variety with little regard to international regulations as the exist today.
CySEC Regulation In The European Union
According to the EU charter and the MiFID (markets in financial instruments directive) financial services regulated in one EU nation have access to financial markets and services in the other EU nations. This is done through the EU financial passport; it outlines the process for operating financial services across borders, what's good for one country is good for another. CySEC based its own regulatory standards on these laws so approved brokers should be able to provide services throughout the EU. There are some requirements for the brokers, it's not as simple as accepting a trader, but it's not much more complicated than registering in each member country once the original license is granted.
The problem is that countries like England, France and the Netherlands are still at odds over how to classify binary options and how to regulate them. Many brokers, most notably CySEC regulated brokers, are getting the stink eye from countries that do not recognize them as legitimate financial tools. In England the FCA is only now taking over regulation of the industry, 3 years after CySEC, and their only accepting the responsibility under duress. Their claims is that binary options are closer to a fixed bet rather than a trading vehicle so are the responsibility of the GSC, AKA Gambling Supervision Commission, who have been supervising them until now. The UK Department for Culture Media and Sports thinks otherwise. It is their belief that binary options can help expand the UK's financial sector and drive revenues for the nation.
Changing The Face Of Binary Options
The Dutch courts have made a bold move that is changing the way binary options are being viewed in the EU. The court set a precedent by forcing Dutch regulators to grant a license to a binary options broker. The Dutch regulators, holding the same position as those in the UK, refused to grant a license to a binary options broker. The courts upheld CySEC, the MiFID and the financial Passport by fining the regulator. The regulator has since complied with the courts wishes and granted the license, creating the first regulated Dutch binary options broker with access to the full EU through the Passport.
While the British FCA does not enjoy its new role they have taken on the chore and along with the Dutch ruling firmly establishes CySEC binary options in the EU. Together with the financial community plans are being laid that may entrench London as a hub for binary options. This would create the second such in the EU next to Cyrprus and may lead to further globalization in the future. As of now Australia, New Zealand and Japan are each standing alone as is the US, however the US market is also on the verge of expanding. Cantor Exchange, a subsidiary of Cantor Fitzgerald, has partnered with three of the top CySEC regulated technology providers to create a CFTC trading environment as easy and friendly to use as those in off-shore markets.
Change Is Afoot In The Realm Of Binary Options Regulation
Change is in the air. Regulators around the world are standing up to take notice of binary options. There are warnings, new regulators and a new look at some of the laws governing the way binary options are treated. Some of the attention is bad, some unwarranted but all leading to one thing... the growing potential for a global standard in binary options trading similar to what we have with forex and futures trading. The trouble with the regulatory framework we have today is that it is very localized. Not all countries treat these options the same, some call them bets, others call them speculations with the result a jumble of brokers, platforms and countries with a vegetable soup of regulatory agencies ranging from the CFTC to the FCA, FSA and CySEC.
The most visible facet of the regulations picture are the growing number of warnings and crackdowns. Not a week goes by without some new broker getting banned or receiving a warning in a country it is not welcome. The first date back to 2008 and before, stemming from the US CFTC and SEC, the first to create a legal framework for binary trading. Since then other countries including Canada, Australia, New Zealand, Japan, France, The Netherlands and England have all gotten on board with binary options regulation. Many warnings come from Canada, where binary options are legal so long as the company is registered with the appropriate authority. Most recently France, in cooperation with the Netherlands and Belgium, has been on a rampage. The bloc are actively rooting out bad brokers, scam brokers, white labels and clones of all variety with little regard to international regulations as the exist today.
CySEC Regulation In The European Union
According to the EU charter and the MiFID (markets in financial instruments directive) financial services regulated in one EU nation have access to financial markets and services in the other EU nations. This is done through the EU financial passport; it outlines the process for operating financial services across borders, what's good for one country is good for another. CySEC based its own regulatory standards on these laws so approved brokers should be able to provide services throughout the EU. There are some requirements for the brokers, it's not as simple as accepting a trader, but it's not much more complicated than registering in each member country once the original license is granted.
The problem is that countries like England, France and the Netherlands are still at odds over how to classify binary options and how to regulate them. Many brokers, most notably CySEC regulated brokers, are getting the stink eye from countries that do not recognize them as legitimate financial tools. In England the FCA is only now taking over regulation of the industry, 3 years after CySEC, and their only accepting the responsibility under duress. Their claims is that binary options are closer to a fixed bet rather than a trading vehicle so are the responsibility of the GSC, AKA Gambling Supervision Commission, who have been supervising them until now. The UK Department for Culture Media and Sports thinks otherwise. It is their belief that binary options can help expand the UK's financial sector and drive revenues for the nation.
Changing The Face Of Binary Options
The Dutch courts have made a bold move that is changing the way binary options are being viewed in the EU. The court set a precedent by forcing Dutch regulators to grant a license to a binary options broker. The Dutch regulators, holding the same position as those in the UK, refused to grant a license to a binary options broker. The courts upheld CySEC, the MiFID and the financial Passport by fining the regulator. The regulator has since complied with the courts wishes and granted the license, creating the first regulated Dutch binary options broker with access to the full EU through the Passport.
While the British FCA does not enjoy its new role they have taken on the chore and along with the Dutch ruling firmly establishes CySEC binary options in the EU. Together with the financial community plans are being laid that may entrench London as a hub for binary options. This would create the second such in the EU next to Cyrprus and may lead to further globalization in the future. As of now Australia, New Zealand and Japan are each standing alone as is the US, however the US market is also on the verge of expanding. Cantor Exchange, a subsidiary of Cantor Fitzgerald, has partnered with three of the top CySEC regulated technology providers to create a CFTC trading environment as easy and friendly to use as those in off-shore markets.