Despite CySec denying its intention or even interest to regulate binary options in the past, today we receive news that this has changed. According to Map S.Platis, and following its extensive lobbying, CySec has made the decision to start regulating this activity.
This is no less than a revolution in the binary options market which was completely unregulated in EU up until now. According to Map S.Platis they are already working on 3 binary broker applications. CySec just published its decision online found here. The translation is found under the Map S.Platis notice below.
MAP S.Platis is proud to announce a unique European regulatory success in the fast-growing industry of online Binary Options trading! A success which will undoubtedly contribute radically to the development and further growth of the industry! Specifically, MAP S.Platis through its nearly 2-year efforts have secured an official announcement by the Cyprus Securities and Exchange Commission (CySEC) to confirm the regulatory coverage of on-line Binary Options Brokerages who operate from the Republic of Cyprus.
As part of the continuing efforts of MAP S.Platis to develop, support and assist with the better interpretation of the regulatory framework in which EU Investment Firms operate, our firm’s compliance teams in October 2010 initialised research, consultation and discussions with the relevant European regulatory bodies as well as with the European Commission with respect to the regulatory treatment of Over-The-Counter Binary Options.
Following our consistent and persistent efforts, our teams have secured an official response by the European Commission in December 2011 which confirms that online Binary Options Brokerages should be fully regulated under MiFID in their respective jurisdictions. In light of this, our teams have promoted and supported this matter over the last 5 months through communication with, as well as publications and distribution of technical reports to, EU regulatory authorities.
As a result of the above, CySEC has officially announced today, 03/05/2012, that Investment Services with respect to Binary Options fall within MiFID and are supervised by CySEC.
In this respect, we confirm that our specialised teams are ready and available to welcome requests for the licensing of on-line Binary Options Brokerage Firms under CySEC, whilst we also confirm that we have 3 CySEC licence applications in progress.
Unofficial Translation of CySec’s decision provided by prepared by 360 consulting www.binarylicense.com
Regarding the supervision of Binary Options
The Cyprus Securities and Exchange Commission (Cysec) announces that, after having investigated at European level of what applies in other member states and having taken into consideration the relevant position of the European Commission, has decided to include the trading/activity in Binary Options within the scope of the Investment Services and Related Activities Law of 2007-2009 (Law).
The Participants in Forex Trading and their Role in the MarketGo to article >>
With view on the European legislative framework, the Cysec has decided that Binary Options are financial instruments as per paragraphs 4 OR 5 OR 6 OR 7 of Part III of Appendix 3 of the Law. Therefore, the entities which offer investment services, as per Part I of Appendix 3 of the Law, in relation to Binary Options, have to submit their application to the Cysec to obtain license to operate as a Cyprus Investment Firm (CIF).
Each company that will submit an application to Cysec for obtaining CIF authorization, shall decide, on the basis of the characteristics of the financial instrument/product, whether it will categorize the said instrument into paragraph 4 OR 5 OR 6 OR 7 of Part III of Appendix 3 of the Law.
With reference to the CIFs that already have a license for offering investment services in relation to financial instruments of paragraphs 4 OR 5 OR 6 OR 7 of Part III of Appendix 3 of the Law, these can continue to offer the said services, but need to immediately inform Cysec in writing on whether they intend to or are already performing activities in relation to binary options.
The CIFs that, presently offer the said service, as an “other service”, or intend to perform activities in relation to binary options, have to immediately apply for modification of their CIF license.
The Cysec informs all the involved parties that the entities, aside the CIFs mentioned above, which are presently performing activities in relation to binary options, have to:
1. Within 15 days from date of this announcement, inform Cysec in writing of their intention, or lack thereof, to submit an application for CIF license/authorization as per the Law, and
2. Within 6 months, the latest, from date of this announcement, submit an application for CIF license/authorization.
Entities which will not submit their intention in writing (as per paragraph 1 above) have to stop (the soonest this is possible, and not later than 30 days from date of this announcement) their activities in relation to binary options.
Entities that will not comply with the aforementioned deadlines will violate the provisions of article 4 of the Law.
Entities that wish to commence activities in relation to binary options from this present date and onwards, may do so only after having received the relevant CIF license/authorization from the Cysec.
The Cysec asks for the attention of the investor public that the said entities active in binary options, aside the aforementioned CIFs, are NOT considered to be under the supervision of the Cysec up until they obtain their CIF license/authorization. The investor public is advised to be careful in its choice of entities to trade/collaborate with.