Binary options regulation is a hot issue today for traders and brokers alike. The wild west atmosphere of the online digital binary options industry is starting to calm down and now there is a new sheriff in town. Regulation first started with the CFTC in the U.S. and was later followed by regulatory action by CySEC in the EU and the FSA in Japan. Now, the South American nation of Uruguay has stepped onto the scene as well. Brokers, regulators and government officials have come together under Law 15921 to provide a safe environment for both traders and brokers alike. The law is broad and intended for the set-up of Free Trade Zones in order to stimulate international trade, trade that includes financial and other trading services.
Uruguay Free Trade Zones
The Uruguay Free Trade Zones were set up in the late 80’s after the passing of Law 15921. The senate and House of Representatives of the Oriental Republic of Uruguay, a meeting of the general assembly, passed the legislation as a “matter of national interest”, as the statute itself states. The zones are intended for the promotion and development of Uruguay businesses in order to make them more attractive and competitive on the world market. The zones are also used to attract foreign investment in Uruguay business. Within the law there are a few areas of particular interest to binary traders and the industry at large. For one, Article 2 defines how the zones are to be used. Trading of financial and material goods are one use, also included are “all types of services not restricted by national law” and “other activities that may prove beneficial to the economy”.
Article 5 is where is it really starts to get interesting in the perspective of regulation. It’s one thing to set up a place where a broker can open shop, it’s another to provide an actual framework of regulation and oversight. The Uruguay Free Trade Zones are regulated by the Ministry of Finance through the Free Trade Zone Bureau, an agency set up to operate the zones, approve applications and enforce sanctions. The bureau is assisted by an advisory committee consisting of five people both elected and appointed. The job of the bureau and the advisory committee is to ensure that zones and businesses within them are operated in the best interests of Uruguay.
In article 10 the application process is laid out. All private businesses must prove through an application process that their business is feasible. They must also show that it is a benefit to the economy as well as in the best interests of Uruguay. Those not complying with the application process or with regulations following approval are subject to fines up to 12.5 million Uruguayan Pesos, a hefty sum in any currency. Further on in the legislation, Article 16, contract specifications are laid out in such a manner that all contracts between users of the FTZ are void unless approved by the FTZ Bureau.
Financial Services In the Uruguay FTZ
The part of Law 15921 that really packs a punch when it comes to binary options is article 38. “There shall be total freedom for entry and exit for all securities, local or foreign currencies, precious metals, for any reason including but limited to holding, trading, circulating, converting and transferring. An article that neatly encompasses the myriad aspects of binary options trading. Uruguay has made binary options a matter of national interest because the country’s legislators think they are of benefit to the economy. They have provided a safe place for brokers to open their doors and made it unequivocally legal to trade the financial security we know and love as digital binary options.
EmpireOptions is the first broker to open shop in the FTZ. The broker has been around for a year or two but has recently undergone some great changes. First they changed the way they handle your accounts. No longer are your accounts rewarded with bonuses that make withdrawals impossible. They now reward larger account holders with benefits such as free unlimited withdrawals and/or immediate withdrawals. EmpireOption is built on the SpotOption trading platform so it has all the great features of the best SpotOption brokers. Unlike all other SpotOption brokers EmpireOption has remained a stand alone company under the law and regulation of Uruguay which means they are not tied into the SpotOption banking and cashier system. Click here for more on Uruguay Binary Options Regulation.