Written by: Sophie May
The need for regulation
In the past, the lack of binary options regulation meant that brokerages were only obliged to abide by the laws of the countries in which they operated and to comply with tax regulations. There were no universal standards in the industry and it was harder to tell the trustworthy brokers from the scams.
Now that the binary options industry has expanded, new laws have come into place, which offer enhanced security and protection to traders. Top brokerages have welcomed the new legislation, in the belief that it will add to the legitimacy and reputation of the industry as a whole.
CySEC
Banc De Binary Limited is authorised and regulated by the Cyprus Securities and Exchange Commission (license number 188/13) with the right to offer services on a cross border basis within the EU. The Cyprus Securities and Exchange Commission (CySEC) is the supervisory and regulatory authority for Investment Services firms in Cyprus and is member of the Committee of the European Securities Regulators (CESR).Banc De Binary Limited complies with all applicable EU and local regulations including the European Markets in Financial Instruments Directive (MiFID) and the Cyprus Investment Services and Activities and Regulated Markets Law of 2007 (Law 144(I)/2007)
Positive impacts
The SEC do not actively regulate binary options brokers at the present time, but is very possible that they will follow suit, as the market for binary trading in the US continues to grow.
The costs associated with receiving a full binary options license from CySEC will wipe the smaller firms from the market, along with those who do not meet the security and legal criteria. This will certainly add to the credibility of the industry and give investors the confidence to trade with firms who obtain the required license.