The United Kingdom’s financial markets watchdog, the Financial Conduct Authority (FCA), today published an updated list of unauthorized binary options firms which includes companies that are illegally providing services to domestic clients.
The FCA has been quite active in policing binary options and in addition to regular warnings, it published in January a list of 94 firms that offer trading to UK consumers without authorisation.
In line with practices across most of the EU, the FCA has brought certain types of binary options within its regulatory perimeter alongside the implementation of the MiFID II, which came into force since January 3, 2018.
In a statement the FCA said its updated blacklist of binary option brokers is based upon information it received from consumers, partner agencies and from monitoring the online market
TrustedBrokerz: The Source More Traders Are TrustingGo to article >>
The regulator added: “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 not the only government agency to move against binary options. In what the UK police have described as the biggest operation of its kind, officers swooped on the offices of 20 binary options brokers in order to review their compliance documents and gather intelligence on different types of investment fraud.
The City watchdog’s research on this area found the majority of consumers who invest in binary options lose money and that investors lost an average of £87,410 per day, over the course of 2017.
Binary options products were the most enquired-about category for the FCA centre in the last year. Consumers contacted the UK watchdog about several product types, including shares (14%), forex (13%) and bonds (10%). In addition, regulatory status amounted to 55% of total inquires. Typically, consumers were checking to see if firms are authorised to sell their products.
The watchdog attributes the increasing popularity of binary options to the current low interest rate environment.