EU Binary Options Regulations Advances – More Countries Adopt Regulation
Rumors abound over whether or not the FCA plans to regulate binary options in the UK. Based on reports from FinanceMagnates and other top industry websites it appears the the FCA may be forced to adopt regulation. According to them binary options are more akin to fixed odds betting and not a financial instrument at all. The agency stands firm in its belief the they are not covered under the EU’s financial structure, the Financial Services And Markets Act of 2000 or the MiFID (Markets in Financial Instruments Directive), both of which play key roles in CySEC’s adoption of regulation.
However, since their inception, binary options have been gaining popularity among United Kingdom financial circles leading to a letter from the Department for Culture Media and Sport to the GSC. In the letter the department discusses the possibility of alternative methods for regulating binary and its potential to boost the already burgeoning UK financial sector. The GSC, Gambling Supervision Commission, has to date been in charge of regulating binary options in the UK although some brokers have chosen to go it alone. ETXCapital is one such. ETXCapital is a prominent financial services firm in the UK and added binary options to its array of tools early in 2015. The company reports that since first launched they have seen demand for them rise to the point binary options have become an “integral part of our financial offering.
Binary Options Warnings? Dutch Court doesn’t Think So
Other countries such as France, the Netherlands and Italy are also of the opinion that binary options are not covered under the EU financial services passport. The passport allows financial companies regulated in one country of the EU to operate throughout the EU. France is only the most recent of these countries to issue dire warnings against brokers whether CySEC regulated or not. Now the tables are turned, a ruling by a Dutch court could change the face of binary options forever.
Dutch regulators were Dutch Court Binary Rulling to grant the first license to a Dutch binary options provider. The license was issued under protest as the Dutch regulatory body holds the same views as those of the British FCA. However, the courts disagreed with their opinion forcing the AFM to grant the license the confirming binary options under the MiFID. The AFM will now be granting to licenses to new brokers as they apply and meet the basic requirements, granting them access to the greater European market through the passport.
The Bottom Line
It is clear that EU binary options regulators are going to have to get in line with CySEC. These new developments are surely not the last we will hear on this subject as binary options move further into the mainstream. In related news many of the top CySEC regulated technology providers are working with Cantor Exchange to provide access to the US markets. Once complete, along with the expaning EU regulatory picture, the framework will be set for an international trading arena spanning the North American and European continents.