Are Binary Options Regulated?

Binary options trading would be the newest kid on the block, so getting the interest of authorities just lately because it’s presently being supplied by several brokers, both new and old to the business.
Unlike forex trading, that will be governed by the CFTC, NFA, along with other overseas regulatory agencies, there aren’t a lot of regulators overseeing binary options trading at the moment.
Of course, with binary options gaining popularity, the ball is starting to roll on creating regulations for this relatively new way to trade.
Cyprus Securities and Exchange Commission (CySEC) was the first regulatory body to consider binary options trading as a financial instrument back in May 2012.
In the U.S., one of the top binary options broker, Banc de Binary, made an initiative to seek regulation from the CFTC for its operations. Other binary options brokers are expected to follow suit.
Across the globe, other regulatory agencies are also starting to keep a closer eye on binary options trading. The Japanese Financial Services Authority is drafting its regulations for Japan, the largest market for the product.
Over in Malta, the Maltese Financial Services Authority (MFSA) is making arrangements to take charge of regulating binary options brokers in the country.
In line with this, brokers will undergo an application procedure and a strict due diligence process to secure its license to operate.
Among the possible application requirements are that binary options brokers fall under the Investment Services Category 3 license and will be subject to a minimum capital requirement of 730,000.
If you’re planning to open a binary options account, make sure you do so with a regulated broker.
Regulated brokers are usually held to higher operating standards, and if you do have issues (e.g., trade execution, withdrawing funds, etc.), you have a higher power to help you resolve those issues with the broker.
Although unregulated brokers shouldn’t be seen as scammers, trading together could involve dangers like a lack of promises which the company ‘s working funds are kept separate in customer funds.
Additionally, there’ll be no one to listen to your situation and do it on your behalf when you’ve got an problem.