European Crackdown on Binary Options Brokers Continues
Regulatory agencies in the European Union (EU) are continuing their crackdown on binary options brokers. The French Autorité des Marchés Financiers (AMF) and the Cyprus Securities and Exchange Commission (CySEC) have both recently moved ahead in increasing regulatory pressure on binary options brokers.
In France, the AMF added five binary options brokerage firms to its warning list. The five additions are ToroNext, EasyGestions, CBF Financial, Luxembourg Capital Finance, and 4U Groups. All of the added brokerage firms are fairly new appearances on the binary options trading landscape.
Similarities in website design suggest the possibility that ToroNext, EasyGestions, and CBF Financial may all be owned and operated by the same company.
Forex Brokers Also Added to Warning List
In addition to the binary options firms, five forex brokers were also added to the AMF’s warning list. Two of the firms, X90 and MT4Invest, have had numerous customer complaints made against them. The other three firms, Boom Forex, PromFX, and GSS Financial, are all fairly new entrants to the forex broker marketplace.
The AMF’s primary reason for adding all of these brokerage firms to its warning list is that none of them are properly licensed for offering investment services in France.
On a more positive note, the AMF announced that, as of July 3rd, it will be lifting the ban on 24Option, allowing the firm to once again offer trading services in France. The company had been banned since last August for failure to adequately fulfill “professional obligations” – the first time a Cyprus-headquartered trading firm had suffered a ban in the EU.
In case an Affiliate is acting outside the scope of the signed agreement, the CIF should cease the cooperation and take appropriate measures against the Affiliate.
CySEC Moves Against Broker Affiliates
In a related story, in Cyprus, CySEC is increasing scrutiny on affiliates of forex, CFD, and binary options brokerage firms. CySEC issued a circular laying out rules for how licensed Cyprus Investment Firms (CIFs) are allowed to operate through third party affiliates.
This action follows earlier moves by CySEC such as fining and suspending brokers as a result of actions by third party affiliates of the brokers. Affiliates have been known to market much more aggressively than the actual brokerage firms and have much more often been found guilty of making false or exaggerated claims in attempts to lure retail clients.
CySEC has stated its intention to publish a warning list of broker affiliates that it deems are operating illegally, as well as the names of persons representing such affiliates. The publicly available warning list will serve as an implicit directive to all licensed CIFs to sever any ties with affiliate firms that appear on the list. The circular states, in part, “In case an Affiliate is acting outside the scope of the signed agreement, the CIF should cease the cooperation and take appropriate measures against the Affiliate, informing, at the same time, its clientele through its website, for this termination.”
The actions by the French AMF and CySEC signal that the increase in regulation of binary options brokers has not yet peaked, and appears to be spilling over in the form of increased regulation of forex brokers as well.
Robert has consulted for Binary Options Expert for five years and is a well-established member of the team. While he is passionate about the site, most of Robert’s time is focused on his current position as CEO of a professional coaching company. Learn more.