There have been quite a few developments in the binary options industry in the recent months. None of them are necessarily good for the industry itself, but there cannot be definitive answers until the changes, which are now in action, are finished.
Cyprus is definitely the central point for the online investment industry and the changes that happen there is and will, undoubtedly affect the industry on a global level.
The binary options industry is taking ongoing hits
When it comes to Cyprus, this was the first country to raise binary options to the level where they were considered financial instruments and gave the broker companies the possibility of acquiring a license to conduct their business.
However, as of recently, the industry has been taking severe hits due to an increase in fraudulent activities which started an international battle against binary options. The Cyprus Securities and Exchange Commission (CySEC) is trying to remedy the damages by announcing strict changes in regulations in order to raise the requirements bar and act in the best interest of prospective and current clients.
There have been a large number of complaints that are being filed against various different binary options companies. CySEC, as the regulator on Cyprus, is investigating all the complaints that were received regarding fraudulent behavior. In fact, during the last iFX EXPO, which is one of the best forex expo’s, on the account of all the turmoil that the binary options industry is going through, the head of CySEC,DemetraKalogerou said “We are considering banning binary options, but we are still consulting about it”.
Israel and Canada’s war against binary options
Israel has already made it impossible for binary options firms to offer their services and recruit clients that live within the borders of Israel. This ban was brought by the Israeli Securities Authority (ISA) approximately one year ago. However, this is just the beginning it seems, as the government is now planning on passing a law that would forbid Israeli online financial businesses to offer their services to clients living outside of Israel also. The new law is now being passed on to the parliament for the next step.
It seems important to mention that not all of the firms that will be banned from doing business are unregulated. Quite the contrary, the regulated ones mostly have the CySEC (Cyprus Securities and Exchange Commission) license. What this is implying to Cypriot regulator, and by extension all other european regulators, is basically that their regulatory requirements are simply not good enough and that they are indirectly responsible for the scams and fraudulent behavior of all binary options brokerages. The ISA does, however, highlight how the proposed bill was initiated on the account of fraudulent platforms operating out of Israel itself.
Israel is not the only one currently battling the effects of unethical and fraudulent activity by certain binary options firms. Canada has also had its fair share of issues with the online trading industry. It has piled up several new brokers to the list that requires their legal attention and there will certainly be more. One of those brokerages was the Icon Markets Limited that own the Hedgestone Group brand. They have now announced that they are no longer accepting Canadian and South African clients.
South African broker regulations
When it comes to binary options in other parts of the world, South Africa needs to be mentioned without a doubt. Their regulation standards came into existence in 2012, before which the binary options brokers in South Africa would either work unlicensed or they would acquire a license from the South African government.
There are two financial supervising bodies that are in charge of regulating the binary options industry in South Africa which includes binary options providers. The main goal of these organizations is to provide strict and enforced rules and regulations so that the general public can safely choose and do business with binary options brokers.
Those organizations are the Financial Services Board (FSB) which is tied directly to the South African government and the Financial Advisory and Intermediary Services (FAIS) which operates directly under FSB. Their main goal is to provide a stable and ethically relevant trading environment and the upholding of the provided regulations on South African soil.
The future is still uncertain
It seems that there is still no way of knowing what the future hold for binary options industry. Considering all the recent events and heavy blows that were dealt towards the options providers, it appears that the next few months might be crucial for this industry’s development, progress and possibly its very existence.