Binary Options trading activity is on the rise in New Zealand, according to the updated FMA Strategic Risks Outlook. How does regulator assess the sector?
15 February, AtoZForex – New Zealand’s Financial Markets Authority (FMA) has issued an updated version of its Strategic Risks Outlook. The fresh version of the document is including the issues around the Binary Options sector, too.
Rise in Binary Options trading activity
The New Zealand watchdog stated it has noticed the increase in Forex and Binary Options brokers targeting the New Zealand-based investors. The FMA does not come the first to notice the activity of the Binary Options providers.
Previously, a number of regulators have been warning about the potential risks of the Binary Options trading. Just yesterday, Italy’s regulator CONSOB issued a Binary Options trading warning. Aimed at the investor protection, CONSOB warning is about the risks associated with trading in binary options, rolling spot Forex, and contracts for difference (CFDs).
Now, the New Zealand investors are appearing as an aim for the Binary Options trading providers. The New Zealand regulator states that “In some cases, the businesses are just operating investment scams”. However, the regulator takes a soft position in regards to the Binary Options regulator. The FMA states:
“We will continue to monitor these types of products and how they are sold to better understand what future action we would take”.
Global regulators’ stance on Binary Options
Last year, the Chairman of the ISA, Prof. Shmuel Hauser has reported to Israeli local media that he has addressed the legal authority of the government. Specifically, he was asking to enable him to cease the marketing of Binary Options abroad. Such initiative was taken, as according to Mr. Hauser it is “an ugly phenomenon that is tarnishing Israel’s image.” Consequently, Forex trading was restricted in Israel, whereas Binary Options were forbidden for Israeli traders. Now, the regulator takes steps even further, focusing on the international firms that operate from the country.
Also, the Cyprus Securities and Exchange Commission has published a Circular with a range of proposed changes to regulations. This aimed at improving the obligations of binary options brokers so that CIFs will “meet their compulsions in acting in the best interest of their clients”.
Additionally, the Quebec watchdog proposed to impose a ban on Binary Options with expiries of less than 30 days. Apparently, the regulator of the Canadian Province believes that some of the Binary Options types can be safe to trade.
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