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Binary Options Regulations

The trade in binary options has been going on since the year 2008. Up to that point in time, there had been virtually no regulation with regard to binary options. In fact, the world did not even know of the existence of binary options. As such, many jurisdictions were caught off guard, unable to legally regulate the trade in binary options using their legal mechanisms as they stood at the time. The applicable financial laws covered financial institutions and the stock market as well as a host of other financial transactions that were in the mainstream at the time. The result was that governments all over the world and in Europe especially, started rushing to create some semblance of rules that would have regulated this market. There was also the small matter of jurisdiction and online trading for that matter. Since online trading can be accessed by virtually anyone, it became imperative to determine just what laws were applicable in what situations. As such, over the years, different countries have sought to include the trade in binary options in their financial regulations. Like in any developing field, there are a number of issues that need to be looked at to ensure that the whole process is streamlined.

To start with, it is important to point out that the absence of regulation does not necessarily mean the trade is illegal. Far from that, the absence of regulation only leaves you more open to scams, and with less security, legally speaking. It leaves you with no opportunity for recourse in case of a mishap or malpractice. Regulation seeks to define the rights and relationships between the brokers and the traders. It seeks to explore the acts of recourse that are available to the aggrieved parties. For instance, if a trader is scammed by a broker and cannot get his payout as agreed, then the trader will not have the legal mandate to seek recourse.

Most of the binary option brokers operate from countries such as Cyprus. This means that the country’s laws are a little more developed than in other countries where the trade in binary options has not caught on. Such kind of tighter financial regulation is what traders should look out for while determining the platform to use in their trade.

Advantages of regulation

To start with, regulation helps you trade in safety. With proper regulation, players in the market are able to trade in peace with safety in the knowledge that they are able to make money in piece. In addition, regulation keeps illegal activities such as money launderers and such kind of illegal activities away from the market. While keeping the illegal activities out of the market, the regulators are able to ensure that they do not sponsor illegal activities across the world. They also keep criminals from using the platform to clean up their money. However, it is important to note that regulation may differ from one place to the next with different countries having different needs. As such, in the search for a proper platform on which to trade, you should choose a platform in a country that has tighter regulations.

 

recommended reading:

https://www.fca.org.uk/news/statements/binary-options–potential-changes-in-regulation-

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IQ Option(Read Review) – 10$ min deposit , IQ Option demo support is free of charge, and there’s no difference between a demo account trader and a live trader in terms of support given

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