Written by: Sophie May
When opening any type of financial account, from a savings bank account to a live trading account, it is essential that you can trust the firm holding your money. The binary options industry has grown so quickly over the past years that a huge range of firms have starting offering this type of trading. The reputation of these firms naturally varies, and it is your job as a potential investor to pick out the most trustworthy and secure brokerages. Please keep your money safe by checking for the following:
Insurance
It will give you greater financial security, and of course peace of mind, to know that the money in your account is insured. A broker protecting its clients’ interest must ensure that the funds are safeguarded in accordance with the applicable legislation. This means that the client’s money must be segregated from the Company’s own money and cannot be used in the course of its business. Before investing, make sure that the Company is also a member of the Investors Compensation Fund (ICF). Depending on the classification, the Client may be entitled to compensation from the ICF in the event that the Company is unable to meet its obligations.
License
CySEC has recently introduced new legislation in Europe, and you should check that your brokerage is working with them and complying with the law. Has the firm submitted to CySEC, the regulatory body, their intent to apply for a license? Are they currently in the process of obtaining that license? You can find more information about binary options regulation here.
Security Encryption
Make sure that your personal and financial data will be securely transferred over the Internet when you deposit funds. Is the data on the platform security encrypted? Is the firm able to tell you what security software they use? Banc De Binary for example uses EV SSL with 256 BIT Encryption, the same software used by companies including PayPal and the Bank of America.
Privacy Policy
Does the brokerage guarantee the privacy of your personal data? Respectable firms will have a transparent privacy policy and implement measures to keep your financial information secure during their data processing and as long as they have access to it. Is this privacy policy clearly outlined on the website? A brokerage should promise to keep your data secure and not sell it to third parties.