Trading Binary Options in Sweden? Finansinspektionen has published financial markets consumer protection report, outlining potential risks of Binary Options products. Will Sweden join forces with other regulators that already adopted strict stance in regards to the Binary Options sector? One of the latest drastic measures involves AMF Forex Advertising Ban confirmed.
24 May, AtoZForex – Binary Options market has been under the diligent observation by a number of financial regulators all over the world. Some of the watchdogs have restricted certain types of Binary Options trading in their jurisdiction, where others adopted full mode against the Binary Options fraud and banned this type of investment altogether.
Binary Options in Sweden also in trouble
Despite the regulatory attempts, Binary Options fraud is still on the rise in Europe. Just recently, the Financial Conduct Authority of the UK (FCA) has reported the rising number of enquiries and complaints about the Binary Options scams across the country. Moreover, the fraudsters now are utilizing sophisticated scam techniques, which involve the impersonation of genuine individuals and businesses.
Earlier this week, AtoZForex has reported one of the Binary Options fraud cases involving the impersonation of Sir Richard Branson. He has warned the public stating that criminals have been using his name or the name of his companies to appear genuine in order to mislead investors. He found out about this practice when the victims of such scam have contacted him. They were stating that they have lost money.
One of the latest European authorities to join the battle against the Binary Options fraud is Sweden’s Finansinspektionen. The organization is Swedish regulator of financial markets. The watchdog has recently published a a report on Consumer Protection on the Financial Markets.
The regulator reports that Binary Options appear amid top three risks for Swedish clients. Moreover, the authority highlights that in the last years, the Binary Options related enquiries and complaints have risen. The Swedish financial regulator states that Binary Options fraudsters tend to use aggressive marketing practices, involving social media.
Regulation of Binary Options in Sweden
As of now, Binary Options in Sweden are legal, according to the law that allows treating Binary Options as securities instruments and a type of gambling. The regulator stresses that most Binary Options are falling under the definition of financial instruments. However, there are some exceptions. The vast assortment of Binary Options products makes it difficult for the regulator to set the proper framework.
However, there are some norms:
- In case the Binary Options products are perceived as financial instruments, the provider is obliged to have a specific license from the authorities.
- In case a foreign entity is intending to offer its services to clients in Sweden, it must inform the regulator prior to starting any business. The Finansinspektionen reports that a number of UK and Cyprus-based Binary Options brokers are now targeting the Swedish investors.
Presently, the watchdog is working on spotting the unregulated and unknown Binary Options brokers across the country. The FI states that it intends to consult with other EEA states where the particular Binary Options firm is regulated in order to decide on further actions. Overall, Swedish regulator does not favor the Binary Options products. The authority believes that it is an inappropriate product for most of the clients.
Think we missed something? Let us know in the comments section below.