Israeli regulators have come down hard on over-the-counter online trading, placing severe restrictions on FX and CFDs and completely banning binary options. However as exemplified many times before and in many markets around the world, wherever there is a great demand from consumers, entrepreneurs are bound to try and fill that niche.
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A new peer-to-peer (P2P) platform that was launched in Israel over a week ago, Fairtrade.co.il, is now offering a model that is not covered by the restrictive Trading Arena Licence of the Israeli Security Authority (ISA).
The co-founders and co-CEOs of Fairtrade are accountant Avi Gal and lawyer Yaniv Genzer. They explained the model to Finance Magnates: “We offer a system of trade between people and don’t need a license in Israel as its P2P. The ISA is familiar with our activity and we operate according to a legal framework. The website operates only in Israel and is meant for Israelis only. The vision is to implement the P2P model at the expanse of the traditional broker model, on all finance products.”
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“With our separate company that is developing the platform, Peers.Tech, we will look for international cooperations in the future. The Belgian ban for example makes it clear that this type of trading is allowed.”
“We come from the place of the traders. We experienced the capital markets and know that these instruments have problems that emanate from the fact that the broker is the over side of the trade – P2P will fix this. We see this in loans and other fields, this is how you create an alternative offering fair market prices. P2P is a strong trend in the business world and even much more so in forex and binary options – we welcome our competitors in the field.”
“Once you enter the system and understands that you can write an option and not just choose one, and any client can see your order, that you will see that it’s real. The commissions model will be smart and flexible to the benefit of clients, small percentages and a fixed commission. Right now there are no commissions at all because of the launch.”
“There is no call center, we won’t advice or market or tell people what to do. Marketing will rely on digital, social and just giving a good service.”