Global Regulatory Crackdown Continues – Warnings from CySec and AMF
The global crackdown on unregulated binary options brokers continues to gain momentum. A host of new warnings have been recently announced and are putting pressure on brokers operating outside of their respective venues. Remember, not all brokers mentioned in this report are unregulated. Many of these warnings are focused on brokers regulated in one country or region that do not have license to operate in another. The most obvious example being CySEC regulated brokers who are not permitted to operate in the United States. On top of the warnings there are new signs that CySEC itself is moving to make it tougher than ever for shady brokers to operate.
The French AMF, along with actions from the Swiss FINMA and Luxembourg CSSF, have managed to shut down two notorious binary options brokers; Royal De Bank and FutureMarket. The two white labels, which have both been pulled off of the internet, have been using wild bonuses and aggressive sales tactics to target citizens of these countries and others in the European Economic Arena. The French are only the latest to raise alarms but went to some lengths to ensure the public was properly informed about these two white labels. Aside from offering bonuses of up to 100X deposit, yes that is 100X and not 100%, the websites employees massive amounts of slippage to snare traders into losses.
Canadian regulators remain at the forefront of binary options regulation. In two separate moves Ontario and Quebec have both issued warnings of unregulated brokers offering binary options in their respective territories. At this time Canada leaves financial, specifically binary options, regulation to the individual territories rather than tackle it on a national level. The most prominent broker appearing on the warning issued is MarketsWorld.com which presents some interesting issues. First, binary options trading is legal in Canada but each broker must be licensed/regulated by the securities commission of each respective territory. The warning against MarketsWorld arises from the fact that it is not regulated in Canada, or Quebec. MarketsWorld is regulated though, licensed in the Isle of Mann by Gaming Supervisory Commission, which in itself poses an issue. MarketsWorld is regulated, but not in Canada, and not as a financial services company. MarketsWorld is regulated as a casino.
CySEC Under Pressure From EU Regulators
CySEC itself is issuing more and more warnings as it comes under fire for being “too strict”. The regulatory agency that first embraced binary options has reassured traders that it is indeed more than just a website. The agency has issued a warning against BinaryFloor.com. The broker tried to fly under the radar by claiming to be located in Cypress and implying it is regulated by CySEC. In the warning CySEC states the broker is not a Cyprus registered firm, is not located in or on Cyprus, has not received or even applied for regulatory approval. The actions taken by BinaryFloor.com and its owners is nothing new, there are several examples of brokers claiming regulation and even going so far as to create fake websites to support their claims.
Of course stronger measures taken by CySEC mean that brokers, both regulated and not, are starting to complain. New moves, likely spurred by increasing pressures from other EU arena regulators, have increased capital requirements and made reporting for firms seeking regulation more transparent. A result of the new regulations has created a sharp decline in new firms getting approved. Only 8 new companies received approval in the second quarter of 2014, down more than 27% from last year at the same time. New firms are now required to have at least 200,000 Euros in reserve capital, a small sum in my opinion. Expect to see more, stricter regulation from CySEC and others in the future and be sure to get you binary options regulatory updates here at ThatSucks.com (former BinaryOptionsThatSuck.com).