FFAJ Publishes Final Proposed Binary Options Guidelines

Following reports that Japanese binary options regulations is forthcoming, the Financial Futures Association of Japan (FFAJ) has published the Final Report of the proposed rules. To analyze the product, a Binary Options Working Group was created, that was administrated by the FFAJ, with input from leading Japanese retail Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term brokers, and oversight from the JFSA and local exchanges. As a self-regulating entity, the FFAJ’s initiation of the working group is a means of providing an agreed upon framework of proposals that can be sent to the JFSA to become adopted rules.

Proposals include:

• Minimum trading period of two hours (possibly the greatest disruptor, as it nullifies the entire slate of short term products currently being marketed)
• Clear information explaining the product with warnings that include “principal will be zero if the projection went wrong” and “The difference of the amount paid and amount received by all customers is the source of profits of a firm”
• Disclosure of customer profit and loss which includes both the ratio of total profit and losses, and the percentage of traders losing money
• Rules for advertising which prohibit the use of Marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in the financial services space. Well-funded marketing campaigns are instrumental to the survival and longevity of these companies in an increasingly competitive industry.Within the forex space, marketers perform a wide range of functions to help procure, secure, or retain clients.In particular, newer forex brokers also have t Read this Term the product as an “easy investment”
• Enforcement of “Know Your Customer” answers to questions such as whether the client has sufficient knowledge to invest in binary options and upper limit of losses they are willing to take
• Setting of common strike prices for each contract (this bans the using of present prices to set the strike price)
• Fixed payouts are set throughout the lifetime of the option, with only the value of the option changing value
• Brokers are prohibited to suspend or delay trading without reasonable cause, and in such a case that a suspension in made, explanations to customers need to be published on the firm’s website
• Rules for data collection and monitoring of how products are priced

With the FFAJ finishing its report, the proposal now goes to the JFSA for final review with expectations of a summer implementation

FFAJ Binary Options Working Group Report

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