Cysec 60 seconds binary options demo account
Two of the biggest problems with binary options, for regulators and traders alike, is a serious lack of transparency and standardization within the industry. Each platform is different; the way in which the options are traded, payouts are calculated and the types and range of expiry vary greatly which only adds to confusion already caused by lack of transparency.
CySEC has recently begun to take action to address these issues. These changes are meant to help standardized trading, increase transparency, give better terms for clients and provide enhanced investor protections. 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. One of the many issues impeding the advancement of binary options trading is the method in which call-centers operate.
For the most part, regulated brokers use third party marketing agencies to handle advertising and client acquisition. These centers can be but are not always located outside of Cyprus and the EU and use untrained, unlicensed employees to reach out to clients.
Complaints include misleading clients to the risks of trading and high-pressure tactics used to compel deposits. Countries such as Israel have outright banned the operation of brokers in their jurisdiction because of this, others like France and Canada actively warn against unregulated and fraudulent brokers. This is when a CySEC regulated broker uses a broker registered, headquartered or regulated in another country to draw clientele, trade and provide liquidity for trading.
The practice is allowed by CySEC and EU law and only causes problems when the 3 rd party broker in question is regulated in a manner not consistent with the CySEC framework or is not regulated at all. The thing to remember is that binary options are legal in the EU. Brokers now face fines up to 1 million Euros for non-compliance.
Similar requirements have also been proposed for the use of market makers.