Eu regulated binary option brokers
One of the most powerful regulators in the world is known as CySEC; it is based in Cyprus and was specifically formed to deal with the financial markets. In fact, its main remit is regulating binary options trades. In turn, CySEC regulates all financial instruments in the market. Cyprus is a member of the European Union and, as such, the regulations proposed and strictly monitored by CySEC are underpinned by the financial legislation policies and controls instigated by the European Union.
It is this which provides the confidence and, in turn, the power to CySEC. Providing they are within the European Union they can apply and, if approved, will be regulated by the most important regulatory body for binary options trading in the world.
The greatest benefit of living in Europe is that you have complete freedom to choose your binary options broker. It can be a European one or one which is based anywhere in the world; there is no restriction on who you are able to trade with. It should be noted that any trader outside of Europe may not be regulated and this may make your investment more risky.
It is important to study the terms before you choose your broker; there may be other costs involved and the one that initially appears the best value may not be so.
All the above are able to trade within Europe and the UK; they are some of the best brokers currently available to traders in the European Union. In , the Cyprus commission implemented new rules, mostly concerning the advertising and marketing tactics that brokers can use in targeting new clients. The new regulations led to most binary companies shutting down.
Although brokerages regulated by CySEC can offer their services to most of Europe, the companies are also required to adhere to the regional laws enforced by the respective financial institutions. Despite the stiff regulations, there are still brokers that continue to offer binary options to EU retail traders.
Such brokerages need to follow not only the CySEC rules but also to adhere to the regulations in other European countries. AMF is the regional financial regulator for France. Working as an independent body, AMF regulates all financial businesses registered in its jurisdiction.
The French regulator also aims to safeguard the interests of the French residents through a series of measures, which include banning illegal financial products and conducting investigations. By , the AMF mandated changes to the retail brokerage business, including forex and binary options.
These mandated changes included banning all electronic advertisements targeting French citizens for forex, CFDs and binary options products. The AMF is also very active in issuing public warnings against binary options and forex brokers that continue to offer their services unregulated in France. BaFin is the Federal financial supervisory authority for Germany. As with most other financial supervisory institutions, the BaFin is tasked with ensuring market integrity and regulating the offer of financial products.
Among the series of measures taken, BaFin stated the above service providers must ensure negative balance protection. The rules were implemented in early August , and the regulator joins the ranks of other regional financial regulators in the EU that have come down strongly on the OTC trading industry.
Although the above conditions are restrictive for binary options brokers, the rules and regulations imposed by the financial regulators are in the best interest of the traders. There are numerous examples of how traders were not paid or were scammed. In most of these cases, the culprits were the unregulated or offshore companies. As a binary options trader, it is in your best interest to carefully scrutinize the broker that you want to trade with.
Choosing to trade with a CySEC regulated firm will ensure your money is protected in a segregated account and the broker cannot block your withdrawals for no reason.