Starting from the 3rd of January 2018, the UK FCA officially took over the regulation of binary options products in the country. The watchdog today issued a list of companies that are not conforming with regulatory requirements in the UK. Most notably, the FCA doesn’t stop with binary options brokers – its warning is directed towards affiliates as well.
The financial regulator has inherited the regulatory responsibility from the UK Gambling Commission that previously oversaw the binary options industry. A number of brokers in the industry have been claiming to have a physical presence in the UK. The action follows a police raid which the was executed late last year.
The FCA has said that, since the start of January, all companies offering binary options trading in the UK without authorization are committing a criminal offence. Brokers operating without regulatory oversight will be acting in breach of section 19 of the Financial Services and Markets Act 2000 (FSMA).
Q8 Trade Gains Recognition for ‘Most Trusted Trading Platform in MENA’Go to article >>
Affiliates Not Spared
As part of its new responsibilities, when regulating binary options, the FCA is publishing a list of brokers that are in violation of UK laws. The watchdog has listed a total of 94 companies, including names such as Ayrex, Binary Tilt, CT Option, Investoo.com, Option888, and many others.
The list is based on complaints that the regulator has received from consumers in the UK. The regulator is also actively monitoring the binary options market and gathering information from partner agencies.
“Many of these firms claim to be based in the UK but the FCA believes that most of the addresses they provide are false and that the firms are actually based overseas. The FCA is examining each of these firms to determine whether any are genuinely operating from within the UK. If they are, the FCA will consider taking enforcement action through the courts to stop their illegal activity,” the regulator said.
The FCA highlighted in its announcement that customers of binary options brokers typically lose money, and that these losses can be significant. Clients that have accounts to trade in the speculative instrument are not covered by any compensation and cannot complain to the Financial Ombudsman Service or the Financial Services Compensation Scheme in case of an adverse outcome.