Cyprus Watchdog Takes a Bite Out of Short Term Binary Options
- Among the new legal practices that CySEC says are intended to help binary options traders, there are some that the industry might find hard to swallow.
In recent years many binary options brands have established themselves in Cyprus because of the country's status as an Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term hub, offering easy access to all European Union markets through the continent's license passporting agreement. Now that whole business ecosystem might be shaken as local regulators appear to have suddenly become much less welcoming.
The Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) today sent out a letter to investments firms under its jurisdiction with proposed changes in the regulatory framework. The watchdog says that the document was sent to binary options trading providers in order to let them know that they must offer full transparency and operate in a way that is fair to clients. However, some of new legal practices included will outright interfere with the popular fast paced action many traders like the most about the instrument.
With the aim of increasing transparency, always a good thing for clients, CySEC lists a number of new requirements. Among those: brokers will be required to provide identification of the underlying asset, including the trading venue and bid and ask or last prices of the underlying assets; bid/ask, and/or last, prices at the expiry of the binary option, as well as an "adequate explanation" of the expiry price and the methodology used to determine it.
Hurting the business model that makes short term binary options possible, CySEC also requires brokers to provide clients with an option to cancel a transaction a "reasonable time" after execution, which it defines as not less than five seconds after the purchase of the binary option. Taking the next logical step, CySEC writes plainly that binary options with durations of 30 and 60 seconds are not considered to fall under the law regarding investing services.
The regulator tells firms to immediately review their procedures in the trading platforms and ensure that these are in line with the law. Where they consider that additional arrangements are necessary, brokers are requested to do so immediately and not later than three months from today.
In recent years many binary options brands have established themselves in Cyprus because of the country's status as an Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term hub, offering easy access to all European Union markets through the continent's license passporting agreement. Now that whole business ecosystem might be shaken as local regulators appear to have suddenly become much less welcoming.
The Cyprus Securities and Exchange Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) today sent out a letter to investments firms under its jurisdiction with proposed changes in the regulatory framework. The watchdog says that the document was sent to binary options trading providers in order to let them know that they must offer full transparency and operate in a way that is fair to clients. However, some of new legal practices included will outright interfere with the popular fast paced action many traders like the most about the instrument.
With the aim of increasing transparency, always a good thing for clients, CySEC lists a number of new requirements. Among those: brokers will be required to provide identification of the underlying asset, including the trading venue and bid and ask or last prices of the underlying assets; bid/ask, and/or last, prices at the expiry of the binary option, as well as an "adequate explanation" of the expiry price and the methodology used to determine it.
Hurting the business model that makes short term binary options possible, CySEC also requires brokers to provide clients with an option to cancel a transaction a "reasonable time" after execution, which it defines as not less than five seconds after the purchase of the binary option. Taking the next logical step, CySEC writes plainly that binary options with durations of 30 and 60 seconds are not considered to fall under the law regarding investing services.
The regulator tells firms to immediately review their procedures in the trading platforms and ensure that these are in line with the law. Where they consider that additional arrangements are necessary, brokers are requested to do so immediately and not later than three months from today.