Binary options are under the spotlight of Israeli authorities once more. On Sunday, June 18th 2017, the Minister of Finance, Moshe Kachlon, will present an amendment to the securities law in the upcoming government meeting. The governmental bodies that have worked on the proposition are the Ministry of Finance, the government’s legal advisor, the Israeli Securities Authority (ISA), and the consultation and legislation department in the Ministry of Law.
If the law passes the first and second reading in the Israeli parliament, online trading companies from Israel will be forbidden from offering their services to clients living abroad. Binary options operations within Israel were banned by the ISA about a year ago, as the regulatory body’s stance on the matter equates this type of online trading to gambling.
Until now, binary options brokers dealing with clients living outside of Israel have been legally able to operate without any sort of authorization or regulation. Recently, the ISA, among other local authorities, received numerous complaints regarding the financial losses of clients from countries around the world who have traded with Israeli companies. A large number of these companies were offering binary options trading.
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According to the ISA, the phenomenon has had a tremendously negative effect both on individual clients and the image of the country of Israel and its financial market. Assuming the law passes, any breach will be equated to money laundering, as criminals might be using the platforms for illegal activities.
After the expected approval, companies or individuals found in violation of the law will face various sanctions, including a one year prison sentence.
Recently, Finance Magnates reported that Professor Shmuel Hauser, Head of the Israeli Securities Authority (ISA), had compared the binary options industry to blood diamonds, due to the high number of clients falling victim to scams.
The announcement regarding the grim future of binary options was released back in February earlier this year.