Trouble ahead! Binary Options brokers rebrand as Forex and CFDs brokers. Opteck next


Binary Options brokers rebrand as Forex and CFDs brokers as a consequence of stricter regulatory norms. Will the industry survive the regulatory crackdown?

27 March, AtoZForex Binary Options industry has faced a lot of challenges lately. Global regulators have been tightening up the rules and frameworks for operating a Binary Options brokerage. Some of the regulators have entirely banned the Binary Options trading. However, some agreed on the restrictions only of the certain type of Binary Options products. As a result of more stringent regulatory frameworks, some of the Binary Options brokers rebrand as Forex and CFDs brokers.

Binary Options brokers rebrand as Forex and CFDs brokers

Nevertheless, one fact is cannot be rejected – Binary Options industry is experiencing a series of regulatory changes all over the globe. How is this affecting Binary Options brokers?

Let’s have a look on one of the latest examples of regulatory change impact on Binary Options industry players. One of the CySEC regulated brokers, namely Opteck, has discontinued the Binary Options offering on its official website. Previously, Opteck has been operating for some years as Binary Options broker. Moreover, the firm, which is a brand of CIF license holder Centralspot Trading Ltd, has been actively promoting itself in the Binary Options industry.

Additionally, as a regulated brokerage, Opteck could have continued the provision of the Binary Options trading services. However, the big part of Opteck’s operations is taking place in Israel. As a fact, Binary Options marketing to retails clients overseas is prohibited by ISA. The combination of stricter regulations and bad image of Binary Options might have forced Opteck to rebrand itself as a Forex and CFDs broker.

A big number of Binary Options brokers now have to keep their operations alive in a very strict environment. The regulatory authorities in some countries are opposing Binary Options businesses. Apparently, the latest developments in the regulations for Binary Options industry have significantly complicated the overall situation for the brokerages.

Regulators versus Binary Options industry

As of now, we have already witnessed a crash of one of the biggest Binary Options brokerages – Banc de Binary. On the 11th of January, the CySEC informed public that the Binary Options broker and Cyprus Investment Firm (CIF) Banc de Binary Ltd (BDB) has renounced its license. The Official announcement from the Cypriot watchdog states:

“As stated in the renouncement letter of the Company, which provided investment services via the domain eu.bancdebinary.com, its authorization with Νumber 188/13 lapses as from 15th of January 2017.”

Other Binary Options brokers are also facing challenges. For instance, the CySEC has issued a €175,000 fine to the licensed Cyprus Investment Firm (CIF), namely Novox Capital Ltd. Specifically, the CIF company operates Binary Options, Forex and CFDs brokerage brands in Cyprus. These include OptionBit (at website optionbit.eu), ZoomTrader Global (at zoomtraderglobal.com), RoyalPip (at royalpip.com), and NGN Broker (at ngnbroker.com).

Consequently, a series of such events build a negative image around the Binary Options industry and some of the brokers are seeking for the plan B. What can they do?

What now for Binary Options brokers?

Reportedly, Binary Options brokers can switch to Forex trading. Forex sector is also a risky and sometimes vulnerable industry. Nevertheless, the sector is well-regulated and also stable to some extent.

Due to the peculiarities of the sector, Forex market players see less regulatory obstacles. The industry has already existed for a long time and has established norms and checked frameworks. However, one may argue that Binary Options and Forex are entirely different financial instruments. Yes, there is no doubt in that.

However, the business operations in both are almost the same. Moreover, the technology side of the businesses is similar. Thus, some of the Binary Options brokers rebrand as Forex and CFDs brokers.

How to switch from Binary Options to Forex?

On practice, the switch from Binary Options business to a Forex one will require certain effort. Nevertheless, industry experts believe that such a transition can be executed in 1.5 to 2 months. The first step of such plan would imply an establishment of the new website and new company. Additionally, it will require the signing of the agreements with the service providers.

Yet, the main step is to choose the right trading platforms and the CRM technology. Thus, it is vital to cooperate with reliable providers who administer a complete list of services. Moreover, they should guarantee full support.

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