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Binary Options Regulations Explained

Binary Options Regulations Explained

When it comes to investing, knowing the governmental regulations is an important part of being a successful investor. In the case of binary options regulations vary depending on where you are located, and since these investments are relatively new, regulations are constantly changing and being updated.

Binary Options Regulations In Europe

Binary options Regulations In Europe

Even though binary options trading were invented in the United States, this investment type has become extremely popular in Europe, with the majority of binary options trading brokers operating today within the European Union. Regulation and legality on binary options is murky at best. While binary options themselves are not illegal in any European country, there is also very little regulation on the marketplace as well, making the marketplace very much a grey area. Many countries within Europe don’t have much financial regulations and restrictions at all, so it is important to trust a broker within a nation that is regulating such investments.

Binary Options Regulations In The United Kingdom

Binary Options Regulations In The United Kingdom

Financial trading is legal and regulated within the UK by the Financial Policy Committee and the Financial Conduct Authority. Brokers wishing to sell binary options must apply for a license to do so with these government agencies. This makes the UK a solid route to go for a binary options broker. Check out the best binary options trading brokers to make sure to pick the broker best fit for your needs.

Binary Options Regulations In Cyprus

Binary Options Regulations In Cyprus

Being the first country to legalize and regulate financial betting in Europe, Cyprus is another option for binary options trading. Even though it isn’t a large country, all of Cyprus’s binary investing trading laws and regulations are up to the standards of the European Union and on par with the laws in the UK. Additionally, many brokers house themselves in Cyprus due to significant tax benefits.

Binary Options Regulations In Malta

Binary Options Regulations In Malta

As another small, emerging European country, Malta has followed Cyprus in upping their financial regulation standards to satisfy the European Union. It has become a full member of the European Union and as such is forced by law to follow all strict financial regulations set forth by the EU.

Countries with no regulation

Most European countries at the moment do not have any online investing laws. This means that although trading financial assets over the internet is not illegal, it is not necessarily regulated and therefore safe. However, it is perfectly fine for a trader to live in one of these countries and use a broker from a country (such as the UK) with adequate laws and regulations.

Binary Options Regulations In United States

Binary Options Regulations In United States

Since binary options trading became legal in 2008, the United States has adopted some regulations and procedures to ensure regularity in the newly developed binary options marketplace. The Commodity Futures Trading Commission (CFTC) has put in place rules that brokers must follow that sanction brokers with penalties for fraudulent action, manipulation, and abusive events. However, the US government is still leery of binary options trading, and the Securities and Exchange Commission (SEC) even released a public investor alert warning against binary options fraud. The statement warns”

“THE SEC and CFTC have received numerous complaints of fraud associated with websites that offer an opportunity to buy or trade binary options through Internet-based trading platforms. The complaints fall into at least three categories: refusal to credit customer accounts or reimburse funds to customers; identity theft; and manipulation of software to generate losing trades. ”
It appears as though even the US government has their eyes peeled for fraud within the binary options market. Because of this, it is important to decide on a broker that is being regulated and monitored by the SEC and CFTC. When it comes to binary options, there is one obvious choice that fits this bill.

Binary Options Regulations In NADEX

The NADEX (North American Derivatives Exchange) is the most heavily regulated marketplace for binary options trading. Trading on the NADEX is like trading through the actual exchange, and not through a third-party broker. The benefits of trading through the exchange directly come in the form of the highest regulation from the CFTC, which ensures there is fair and orderly practice at all times. Additionally, funds deposited at the NADEX are held in segregated bank accounts within the US at BMO Harris Bank and Fifth Third Bank, not to be co-mingled with the exchanges operational funds. Trading directly through the exchange located in the US means no need for a broker or worry about tight regulation.

About Satish Oraon

I'm a good computer programmer & head of forex and crypto analyst, after finishing my programming like to trade & analyze forex, crypto and different trading assets.

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