Italian Regulator Explains Issuing Warning Against Binary Options Brokers

The Italian National Commission for Companies and the Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term (Commissione Nazionale per le Società e la Borsa - Consob), issued a very short report two days ago that the companies B.H.N.V. Online Ltd/Bnet on-line Ltd, Bo Investments Ltd, BFM Markets, Seaside Payment Services Ltd, BFXoption and Chronoption are not authorized to provide investment services in Italy in any way.

The warning also listed their respective websites which Italians should not use: www.opteck.com, www.banqueoption.com, www.bfmmarkets.com, www.tradersleader.com, www.bfxoption.com and www.chronoption.com.

There was no explanation as to why these specific binary options brokers were targeted from the hundreds of similar ones, but they all do seem to have Italian support on their website without an Italian license. Last year, Consob banned six other binary options brokers and blocked their websites from being accessible to Italians.

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 Magnates made contact with the regulator to try and find out if this is part of a larger European move against the industry which has been put into motion, and why those brokers were specifically mentioned and what further steps are being planned by the regulator. Here is the official response in full:

"In order to clarify the subject of binary options and prevent phenomena

of unauthorised provision to the Italian public of investment services

involving the said options, the Commission has considered it opportune to

formulate a communication of a general nature which reflects the

pronouncement adopted recently by the European Commission.

Such operations ("binary options" or "digital options") have, in fact,

become common on the market. They have a structure similar to that of a bet

because they assure payment of a pre-set amount if the event occurs (the

security, index or other underlying factor reaches a certain price), before

or within a certain deadline; if the event does not occur, the "buyer" of

the option loses the entire amount invested.

In Communication No. 12055030 of 2 July 2012, as already clarified by the

Services of the European Commission, Consob specified that binary options,

contracts settled in cash, fall within the category of financial

instruments pursuant to Annex 1, Sect. C of Directive 2004/39/EC ("MiFID"):

Consequently all subjects intending to provide investment services

involving binary options to the (Italian) public must possess the necessary

authorisation issued by the competent Authorities.

Consob has issued warnings about unauthorised companies providing binary

options services without being authorised. Not only Consob has published this kind of warnings; see also Esma and the French AMF."

From the regulator's response it seems clear that Consob regards certain types of binary options as gambling and requires brokers offering them to get licensed accordingly. The regulator did not specify what it's planning next, like banning IPs or filing legal suits, but it is evident it considers its actions as part of a larger European level approach.