What is cysec and how does cysec regulate binary options in europe
The effect was that binary options platforms operating in Cyprus where most of the platforms are based had to be regulated. CySEC has the following responsibilities: CySEC is administrated by a five-member Board which is composed of the Chairman and the Vice-Chairman, that are employed full-time, plus three other members.
In addition the Governor of the Central Bank of Cyprus is represented by a non voting board member. The members of Board are named by the Council of Ministers following a proposal of the Minister of Finance and their service is a five-year term. CySEC has experienced very high growth rates of registrations and pioneering legislation in regards to specific financial services.
Throughout and , CySEC has received criticism from traders and industry commentators who claimed that the organization required better legislation regarding the regulation and monitoring of high risk investment firms. Most of the criticism came in regards to specific binary option brokers. CySEC was the first financial regulator aiming to regulate binary options. As such, binary option brokers, including prominent ones, are either registered or attempting to register with CySEC to be able to legally operate within the Eurozone or to be trusted internationally.
CySEC has implement sweeping changes to both the registration and regulation processes of all registered entities. Firms providing investment and other ancillary services employ individuals which hold relevant qualifications. In accordance with state law, an investment firm employee involved in the provision of investment services or the carrying out of investment activities, must be registered in the public register of certified persons after passing the exams.
The law aims to arm Investment Firms with a good understanding of the local and European legal and regulatory framework and practices along with the essential understanding in regards to Money Laundering , Risk Management and Economics. From Wikipedia, the free encyclopedia.
The proposed reforms now under consultation will enhance the nature, characteristics and trading methodology of this type of retail financial instrument. The new proposed standards regarding the Digital Options Contracts will seek to eliminate the causes of concern regarding the practice that are found commonly to be followed by those providing binary options products, ensuring firms act in an honest, fair and professional manner. The reforms are intended to achieve 4 main goals.
These are 1 to ensure that brokers act honestly, fairly and in accordance with their customers best interests 2 to ensure that adequate information about the products being offered is provided to clients 3 ensure to orders are executed in a manner favorable to clients and 4 to ensure that orders are executed and filled promptly and expeditiously.
The proposed changes are as follows. These reforms all sound really great and bring to mind a couple of things. This means that the brokers will have to change, and most of them will not be able to keep up.
The second thing I think of is that the type of trading these changes describe already exists. Reform Is On The Way Two of the biggest problems with binary options, for regulators and traders alike, is a serious lack of transparency and standardization within the industry.
Remove Opaque Strike Pricing — They propose to ban the current method of floating strike prices.