Exclusive: CySEC Head Meets Israeli Watchdog Chairman in Cyprus
Israel's efforts to stamp out binary options providers in the country is likely the background to the meeting.
An interesting meeting occurred today in Cyprus. The Cyprus Securities and Exchange Commission (CySEC) head Ms. Demetra Kalgerou met her Israeli counterpart Prof. Shmuel Hauser, the Israeli Securities Authority (ISA) chairman. Finance Magnates has learned about the meeting from multiple sources close to the matter.
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The ISA has confirmed that Prof. Hauser flew this morning (Wednesday) to meet Kalgerou. Finance Magnates reached out to CySEC for comment but it has yet to respond. Details of the subject of discussion between the two are yet to be disclosed. We will update our readership once more information is brought to our knowledge.
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Prof. Hauser and Ms. Kalgerou have similar responsibilities in their respective jurisdictions, and their actions could dramatically affect the online trading industry. One is attempting to smoke out binary options providers from his country, the other is trying to tame and regulate the firms.
Recently the ISA has heightened pressure on binary options providers targeting foreign citizens after banning the practice for Israeli firms last March. Last week Prof. Hauser revealed in the Israeli parliament that a draft for a ban on marketing binary options abroad is expected soon. We can reasonably assume that this topic is one of the reasons for the meeting, since many of the companies that the ISA is dealing with are licensed by CySEC.
In an exclusive interview that Finance Magnates published last May, the CySEC head hinted that she’s on board with the ISA’s tougher approach: “Based on CySEC’s experience so far and having identified deficiencies in the monitoring of these call centers, CySEC is considering to require the CIFs to only perform these activities internally from their offices in Cyprus or only through a branch, tied agent or regulated entity based in another jurisdiction. It is provided that all sales people will be well trained and pass CySEC’s exams.”
Binary operators may have to move away friendlier countries. Larger setups like Banc de Binary could probably afford to relocate their staff, but it does mean a fresh recruitment drive would be needed if Israel does end up banning Binary options.
Binary options are very Israel-specific, which makes it very vulnerable to government intervention. The next reasonable outlook only seems to be a strategic expansion in to countries that welcome this industry with open arms.
And the larger players need to move quickly on this.
Hauser is making a mistake that will impact the Israeli economy directly.
The Binary options industry in Israel generates income for almost $1.5B (directly and indirectly)
Did anybody think on how is he planing to replace that significant source of income into the economy?