If simply regulating brokers was not enough, regulators in the UK are still on a manhunt begun earlier in the year. 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. 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. The FINRA, Financial Industry Regulatory Authority, says that binary options are all to often a fraud, something we’ve known for quite some time. Agencies in member countries are now accepting registration of binary options brokers regulated by CySEC.
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 website hosts what they call the “RED” list, an acronym for regulation defecient, a list of all binary options brokers that illegally solicit clients in the US. 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. CySEC regulation was the first and most prominent regulatory body, undertaking the task in 2012, but its jurisdiction has been heavily questioned.
The company’s, one a forex managed account brokerage, the other a binay options trading website, took in millions of investor dollars, all of which have since dissappeared. Articles and other publications on this site are current as of their date of publication and do not necessarily reflect the present law or regulations.
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. 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.
Under the EU’s financial charter, MiFID and financial passport a financial business regulated and registered in one country can do business in other member nations.
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 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. 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.
SpotOption trading is already available on the Cantor Exchange trading website, more brokers are expected to follow in the 4th quarter of 2015 or early 2016.
Now, following a land mark case in the Dutch courts earlier this year, more and more nations are accepting registrations from regulated brokers and further cementing CySEC’s role as top watchdog in Europe. These companies are not supervised, connected or affiliated with any of the regulatory agencies such as the Commodity Futures Trading Commission (CFTC), National Futures Association (NFA), Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA).
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