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Binary Options Regulation Gets Stronger

Binary options regulation, and CySEC regulation in particular, is getting stronger and stronger. By this I mean that the quality of the regulation and effectiveness are both improving. On the one hand CySEC is standing tall, on the other regulators in EU and EU Economic Arena member nations are getting on board. The situation is one in which one leads the other, both making steps that ultimately are benefiting us, the traders.

CySEC Regulation Leads The Way

CySEC was the first to regulate binary as financial, breaking the industry wide open. EU member nations were at first hesitant to follow suit, casting doubts on CySEC and its jurisdiction as well binary options and the entire industry. CySEC regulation, because of Cyprus membership in the EU, is supposed to be valid in any EU member nation because of legislation in the EU charter, the MiFID and the EU Economic Passport. Member nations however tried to block the expansion of binary options into their countries but have so far not succeeded.

What they have done is raise awareness of binary options scams, enhanced the value of CySEC regulation and made the entire industry safer for EU traders. Instead of banning all binary options trading, or creating their own regulation for binary options brokers, member nations have chosen to allow CySEC regulated to brokers to register with them thereby validating CySEC regulation.

A few of the member nations made it easy, all that was required was a simple application process and compliance with CySEC. A few made it tough with one case standing out and setting the precedent that cements CySEC in its place. In this case Dutch regulators refused to grant a license/registration to a broker and the case made to the Dutch Supreme Court. The Dutch court ruled in favor of the broker, upholding CySEC and the MiFID, and forced regulators to grant licenses.

Today there at least 29 EU member nations registering binary options brokers. These include England’s FCA, France’s AMF and Italy’s CONSOB. I point out the AMF and CONSOB because they stand at the forefront of EU regulators issuing warnings against unregulated, unregistered and scam brokers. This move has benefited more than just the brokers and the traders, the move has also helped to legitimize binary trading and allowed access to opportunities not previously available.

New Opportunities For Binary Options Brokers

One such opportunity is TechFinancial’s IPO in 2015. It is the first platform/technology provider to go public and shows not only the viability of binary options as a business model but the public’s acceptance of these businesses. Another opportunity is in advertising. A trend developed in 2015, led by 24Options a TechFinancials broker, where binary brands teamed up with high profile sports teams like Juventus, Olympique Lyonaise, OGC Nice and Tottenham Hotspur.

These opportunities do not come without cost to the brokers. Regulation means transparency, segregated accounts and third party oversight. Compliance is not easy and if not maintained comes with consequences. CySEC will issue warnings for first and/or minor infractions with penalties increasing from there. Over the past 3 years the regulator has issued many warnings and fines and has even shut brokers down.

What this means for traders in the EU is that you have a regulated binary options industry that is only getting stronger and stronger. There are plenty of brokers for you to chose from, many of them not only CySEC regulated but also registered in your own local jurisdiction. Now you can trade and trade safely knowing that the brokers are legit and that someone has your back if problems arise.

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