Regulation of binary option brokers using CySEC

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Regulation of binary option brokers using CySEC

What is CySEC regulation?

Not everyone knows, but binary options have been trading for many years. Many of us traded on different platforms and faced the problem of deception. Everyone has already encountered such a problem, which even participated in the forex market a little. The way out of this situation was the decision to develop appropriate directives that would secure the trader from losing the money invested by him. Many years have passed since the opening of the first broker of binary options and the release of the required number of regulatory acts in this area. The main regulator was CySEC.

What is CySEC?

CySEC is the Cyprus Securities and Exchange Commission (Cyprus Securities and Exchange Commission).

The creation of CySEC dates back to 2001. The main task of CySEC was the regulation of the Cyprus financial markets. In 2004, Cyprus received the membership of the European Union.

As a result of this integration, CySEC is committed to be part of one of the EU’s main directives on the markets for financial instruments. It wears the abbreviation MiFID. Most of the Forex brokers have been working with it for a long time. It provides all companies registered in Cyprus with access to European markets.

An interesting fact is the announcement on May 4, 2020. It refers to the official recognition by the CySEC Commission of binary options as a financial instrument.

What is the responsibility of CySEC

The duties of CySEC are:

  • Tracking of transactions carried out on the Cyprus Stock Exchange by companies with official registration, brokers by individuals who conduct trade on an individual basis and broker companies;
  • Tracking schemes for collective investment, companies that have a license to carry out their activities, providing investment services, as well as the regulation of companies of mutual investment funds and investment advisors;
  • Provision of licenses required for the operation of investment consultants, brokers and broker companies;
  • The imposition of sanctions and fines on investment advisers, individual brokers, brokerage firms and other actors that are subject to the law.

What does it mean?

Opening an account with a broker who operates under the regulation of the CySEC Commission implies control over your account. Under the regulation under such control, all your transactions on your trading account, including deposits, all information on the movement of money on the account, are included. The duties of the broker, which is governed by CySEC:

  • The broker must maintain customer services on a separate account, where all the customer’s cash operations will be performed. The broker has no right to use the client’s funds for his own needs. For a trader, with binary options, this guarantees the complete safety of his invested money and guarantees their return in the event of the company’s termination of the broker or failure to fulfill its obligations to him.
  • All brokers that are regulated with help must provide all data on their activities to the 3rd party. In turn, this will ensure the transparent operation of these entities.
  • The CySEC regulator obliges brokers to provide data on all their transactions to government agencies. This measure will allow you to secure your activity from unauthorized transactions on your account and will only allow you to control the funds in the account.

The CySEC license does not function on an ongoing basis. Every broker that received it will be regularly inspected by this commission. CySEC provides for a system of imposing fines and penalties. The most severe punishment is the deprivation of a license by a preliminary decision of the commission.

The main task of CySEC

The most important task of CySEC is to protect the interests of investors. In other words, it is the protection of the investment invested by the trader. It consists in providing security, security, preventing unauthorized access to funds without a trader’s statement. Exercising supervision over the lawful use of funds by the broker. Operations can be carried out only on your behalf and on your initiative.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Use Of CySec: How CySec Works For Regulation

Binary Option has become so much popular in last few years.

The industry has become one of the priorities for the trader who wants to invest independently by his own.

No industry really goes smoothly without any obstacle, so is the case for binary option trading market.

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You will get to know about some scam related to binary option trading now and then.

To be aware from this scam, we highly suggest our readers to read our articles on binary option guides regularly.

Choose a Regulated Broker

Binary Options is considered as the grey area in financial industry by some of the countries.

But some countries recognized binary options trading as a strong financial area and approved their contribution in economy.

Some countries see them as economy gadget, some consider them as gaming.

It is in charge for regulating binary options in Cyprus and EU.

Benefits of choosing regulated broker are many; one of the main reasons is traders get protection from scamming loosing usually.

Binary options trading require all regulated brokers to follow some rules and regulation, violating any rule can bring bad consequence for brokers.

We like that, regulated brokers work under constant observation.

This criterion of work allows traders to contact the supervisory board in charge for the brokers.

What to Do Before Filing a Complaint with CySEC?

We evidenced that sometimes regulated brokers get also penalized for practicing scamming.

To be secured from any unwanted problem, we highly suggest our readers to trade with the brokers who are on our best binary option broker list.

Most of time traders face problem with brokers while withdrawing the money.

That’s the point when most of the traders get to know that the brokers they are trading with are a scammer.

We encountered that while withdrawing money; traders don’t get any reply from brokers or customer care.

Sometimes brokers also ask for additional fund without showing any valid reason, which is also a sort of scamming.

Unauthorized bonus, unofficial depositing using trader’s credit card and cold calling are also considered as scamming.

If any trader faces this sort of problem, he is suggested to contact with regulatory body or supervisory board first, unless sharing this information online or in forum can give brokers chance to change their setting.

Dropping a complaint with CySEC

CySEC will always tell you to contact the broker first.

If the broker co-operates you, inform them that you know your rights here.

After dealing with broker, CIF (Cyprus Investment Firm) will give you a specific reference number, which is very much important because all the procedures will be needed this number.

Reference number will contain all information like; your name, e-mail, all information of trading.

After submitting a complaint brokers are obligated to response within 5 days and also get 60 days to resolve the problem.

CySEC does not investigate individual complaints, but is a regulatory body or supervisory board that supervises all brokers and it takes all complaints into consideration.

Sometimes traders on binary options forums complain that CySEC works slowly to answer their complaints, but we suggest traders to hold patience.

Sometimes traders are not happy with the response they get from brokers.

If traders are not satisfied with brokers, the next place they have to go is Financial Ombudsman .

It’s a mediator who works between trader and broker.

There are some procedures to deal with Financial Ombudsman.

Trader has to contact with Ombudsman within 4 months after CIF’s final decision.

After all those things, if nothing gets sorted out we suggest traders to go to court, which is so much rare.

CySEC Regulated binary options brokers

CySEC stands for Cyprus Securities and Exchange Commission (official website http://cysec.gov.cy). This is the regulatory commission for Cyprus, a country in the European Union. It is the biggest regulator for binary options thanks to the simplicity of getting involved and the security that people feel thanks to the CySEC complains form. When trading, you can use their list of regulated and licensed brokers to avoid financial loss or other problems connected to unlicensed, untrustworthy brokers. You can find a list of CySEC regulated binary options brokers easily. Same applies to CySEC forex brokers. Many of them are top binary options brokers on the market. Usually CySEC binary options brokers have a large amount of positive reviews and customer experiences behind their shoulders. Read more to find out the truth behind CySEC regulated binary options brokers.

Why is Binary Options Regulation Important?

CySEC Regulated Binary Options Brokers should have a license before they get into trading. If they do not have one, it is unlikely that you can trust them, although many brokers are unregulated to serve US clients. Unregulated binary options brokers do not have anything backing them up nor are they authorized by anyone, which means that there is little you can do if they choose to lie, cheat, or steal. Of course, brokers like this typically have a bad image and reputation. To avoid being connected with these types of brokers, most will become licensed. A CySEC license is one of the most popular options amongst brokers. Some of the biggest in the world have chosen Cyprus for their license.

The reason that a CySEC license is so popular is the simplicity and the effectiveness. It is not as strict, but it still allows complete trading once licensed. Brokers trying to get into trading can make use of the easier process to start trading without having to meet the EU’s standards. For new brokers that find it nearly impossible to meet these standards, this is an easy way in that will help them to get started. This in no way means that the brokers are untrustworthy, though. Some of the biggest brokers have chosen Cyprus and there is also the CySEC complains form if there is a problem.

Unlike binary options brokers, you may encounter a different set of regulators covering forex trading. While most of the regulated binaries brokers are covered in Europe by the CySEC license, many forex brokers obtain this license too. However, next to the CySEC regulation, many forex brokers go for an FCA and ASIC licenses, however this is not a common prat ice with the regulated binary options brokers.

Who are top CySEC Regulated Binary Options Brokers?

To get an idea of what is available, you can look at all CySEC regulated brokers. Again, many are top in their field and licensed through Cyprus. You have relaxed standards as well as a larger selection of brokers. 24Option and TopOption are just a few of the regulated brokers that received their license from CySEC. If you want similar quality and trust, make sure to look through the entire list of regulated brokers before choosing someone. Only choose a broker that is licensed and trusted, don’t let yourself fall for binary options scams.

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