Regulated binary options brokers provide important legal protections for traders. When dealing with a regulated broker, traders are covered by compensation schemes if the broker becomes insolvent. Regulation also ensures brokers meet standards for being a legitimate business, having qualified staff, and keeping client funds separate from company funds before the broker is issued an operating license. Currently, the most developed regulatory framework for binary options is in Cyprus, while other countries like Australia, Malta, the UK, and US are also regulating the industry as it continues to mature.

1. Chapter 13:
Regulations in the
Industry
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2. Although there are plenty of binary options brokers
around on the internet, it is always advisable to
stick with a regulated broker like anyoption. Ever
since the debut of binary options in the retail
trading scene in 2008, the issue of regulating binary
trading has constantly dogged the industry.
Furthermore after a string of negative stories of
brokers suddenly closing up shop and disappearing
with the clients’ money, the industry got tagged
with a bad reputation.
This is why we cannot emphasise enough the
importance of trading only with a regulated binary
broker. First, your rights as a consumer are legally
protected. Second, the broker that you are dealing
with has already been scrutinized by the regulatory
authorities before being issued an operating
license.
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3. LEGAL PROTECTION
When you deal with a regulated broker like anyoption, one of the biggest benefits that
you get is the peace of mind knowing that you can withdraw your money anytime you
want. In addition, when dealing with a regulated financial services provider, you are
covered by compensation schemes such as the Investment Compensation Fund
scheme (Cyprus). So in the event your broker become insolvent, you can be assured
that you will get your money back ultimately.
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4. PRIOR SCRUTINY
This means that your broker has already
been screened by the authorities before
being issued an operating license. The
authorities will first determine if the
broker really exists physically and is not
some fictional entity. Next, the
regulatory authorities usually require
that the brokerage firm be staffed by
competent staff and is financially
capable and capitalized to settle all their
clients’ withdrawal requests.
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5. MEETING REGULATORY REQUIREMENTS
Even after a broker is issued a license, there is
an ongoing requirement for brokers to fulfil
certain conditions if it wants to keep its
license. One such condition is the submission
of reports of its operations to the regulatory
authority on a regular basis. Another condition
is the segregation of the clients’ funds from
the broker’s operational funds. The main
reason for this is to ensure that in the event
the broker goes bankrupt, creditors would not
be able to lay claim to this money. All these
measures are designed to ensure that traders
are protected from fraud.
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6. CURRENT STATE OF REGULATION
As the retail binary options trading industry is in its relative
infant stages, not many countries are equipped to regulate
it. The few countries which do have a legal framework in
place to regulate the industry are Australia, Cyprus, Japan,
Malta UK and the U.S. Among these, Cyprus has the most
well developed framework for regulating the binary
options industry.
As the industry is still maturing, it will most likely take a few
more years before we start to see a definitive list of
regulated binary brokers around the world. In the mean
time, traders should exercise extreme caution when
opening new accounts with an unknown broker or they can
just stick to trading with brokers which are regulated in the
countries mentioned above.
Here at anyoption we wish you happy and secure trading!
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