EU regulators are making it harder than ever for brokers to rip you off, it’s about time.
Is CySEC Losing Control?
A wave of new regulations is taking effect in the EU. Binary options brokers are going to find it harder than ever to operate without a license and to use loopholes in the laws to prevent traders from making withdrawals. Does this mean that CySEC is losing control? No, only that the effort to regulate a once unregulated industry has taken root and now been brought to a multi-national, pan EU level. The first such development was the addition of laws specifically pertaining to binary options and forex trading in the newest update to the MiFID. The latest is an announcement from the ESMA, the European Securities Markets Authority (a body overseeing trading markets throughout the EU), that all regulated brokers must stop offering any bonuses tied to extra trading.
What this means is that bonuses tied to trading volume are to be suspended. This includes any and all forms of deposit bonuses that come with turnover requirements. The reason is because of the psychological effect such bonuses have on traders, encouraging them to trade more, which is the very reason the brokers use them. Bonuses have long been the top tool for attracting, onboarding and retaining clients so the new law will surely have an impact on the brokers. Enforcement of the law will come down to the local regulators in each jurisdiction.
In response to mounting regulatory pressure the European Brokers Association, EUROBOA, has met for the second time to hammer out details of its agenda. At this meeting members unanimously agreed that there was need for brokers and platform providers to conform to a basic set of guidelines to avoid malpractices within the industry that are harmful to the customers, give binary options a bad name and to encourage cooperation with the regulators. At the meeting an industry code of conduct was also begun. The next step is to continue meeting with the regulators, both EU and local, to promote open lines of communication and foster good relations.
Anyoption has once again proven itself to be the leading broker in the EU. The company, through its parent Ourobouros Derivative Trading, has received a license from CySEC to offer portfolio management and investment advice to its clients. This is a huge step forward in binary trading as it is the first legal, and supposedly reliable, portfolio and investment services ever offered by a binary options brokers. Anyoption CEO Shay Datika says they are excited about the license and the new range of products they will be able to bring to the market. They will be different than the traditional binary trading and likely to spark a trend in the industry. Anyoption has also recently received regulation in South Africa making it the top choice for traders in that country.
The bonus is that once again binary options have become a little safer so that we can continue to trade without fear of losing our deposits, our profits and our sanity. The best part is that bonuses will likely not disappear completely. Bonuses not tied to trading volume, bonuses that do not require turnover before making withdrawals already exist at brokers like Marketsworld and elsewhere, all you have to do is look for them. They are a reward for trading volume, are paid only after you trade a certain amount and offered as a reward to clients instead of an incentive. I have no doubt we will be seeing more of these in the future.