According to a letter sent out by the Head of Gambling, Licensing and Lottery in the UK, Alison Pritchard, to the Commissioner and Chief Executive of the Gambling Commission, the UK Government is looking into revising its stance towards the regulation of binary options.
The letter states that the government will propose a consultation for regulating binary options as financial products. This will remove the binary options financial betting category from the reach of the Gambling Act of 2005, instead putting it under the supervision of the Financial Conduct Authority (FCA).
The UK government is effectively addressing binary options as a financial markets derivative product stating that it is “a form of fixed-odds bets on financial markets.” According to the letter, the UK government intends to propose an amendment to the Regulated Activities Order from 2001 and bring binary options in line with the “standard European practice” under FCA regulation.
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The UK government is expected to publish its consultation on the matter in January 2015. Meanwhile, the enactment of the Gambling (Licensing and Advertising) Act of 2014 will not be applied to companies providing binary options, in order to save them regulatory fees and applications which will become obsolete in a couple of months.
According to the letter, providers of binary options services in the UK will not be required to hold nor apply for a UK Gambling Commission operating license until further notice.