Hawk-Eyed Regulators Are Cleaning Up The Industry
If you didn’t already know, regulators are cracking down on unregulated binary options brokers, fraudulent scams and misleading marketing tactics. This month the latest round of actions include warnings, fines and more.
First up is a shout out from the Danish regulatory authority, the Financial Supervisory Authority (FSA). This regulator has issued two warnings for brokers; TitanTrade and 23Traders. TitanTrade is a well know off-shore broker operating out of Belize. This broker has received numerous warnings ranging from countries within the EU to Australia, New Zealand and Canada. While not well known as a scam it is operating without proper regulation in those countries. The Danish FSA says the broker is no longer allowed to do business in their country. 23Traders is an unknown, offshore broker regulated in Vanuatu but nowhere else.
The British Columbia Securities Commission, well known in the world of binary options regulation, has issued yet another warning. This time they are targeting Redwood Options, yet another offshore unregulated broker hiding behind virtual offices. The complaint is that the company is soliciting residents of Canada without the proper licensing or registration. Redwood Options is one of the older and less trusted of the many SpotOptions white label brokers in existence.
The Spanish CNMV, the Commission Nacional del Mercado de Valores, issued a number of warnings in January including AAOption and IB Inversiones. The two businesses are accused of offering, illegally, financial services to residents in Spain. AAOption is a brand owned by Pacific Sunrise LTD, know for operating other scam brands, and registered in the Grenadines. It is a SpotOption white label and has ceased to operate due to regulatory hurdles. IB Inversiones is a firm offering investment advisory services, ie binary options managed accounts, and operating illegally under Spanish and EU law.
IQOption received a warning and fine last September in a surprise move by CySEC. The firm, which has a solid reputation, was charged with failing to adhere to best execution practice and fined 20,000 euros. The fine, a mere slap on the wrist compared to the $11 million fined to now defunct Banc de Binary, has now been rescinded due to new evidence. CySEC, after reviewing the initial ruling has declared the broker free of charges. Now that this matter is cleared up IQOption’s reputation has been solidified as leading broker. Click here for our review of IQOption.
The Industry Matures
This latest round of warnings carries within it a sign of maturity within the industry. In the past, warnings from regulators were just as likely to be against a broker regulated elsewhere as they were to be about actual fraudulent brokers. Now that has changed. Regulators, CySEC and EU/MiFID in particular, require their brokers to refrain from engaging with clients in non-regulated jurisdictions as part of their compliance. This helps the industry in a number of ways, perhaps most importantly by focusing the worlds attention on the truly fraudulent brokers so that the legitimate industry and trading community can get on with business.