Banc de Binary calls it a day

Banc de Binary calls it a day

Friday, January 13, 2017 Posted by Scott Longley
Binaries operator halts operations under regulatory pressure

The binary options world suffered its most high-profile casualty this week when leading Cyprus-licensed operator Banc de Binary closed its operations claiming that the bad publicity surrounding the product made it impossible to carry on trading.

In a statement sent to news organisations, the company said it would be “gradually downsizing its operations due to regulatory constraints.” Banc de Binary then said it was looking for an orderly wind down and would be returning cash to customers.

The retail financial trading sector has been under pressure for the last few months after regulators in Cyprus, the UK and Germany issued new proposals or regulations tightening the rules on offering financial trading products to consumers.

Also this week new rules came into force in France that mean that new restrictions have been imposed on the digital marketing of retail financial products.

Banc de Binary had a controversial existence. Last year, it was fined $11m by the US financial authorities after the company was found guilty of illegally marketing its products to US clients.

The Israeli securities regulator has also issued warnings against financial trading firms that have based themselves out of Tel Aviv, such as Banc de Binary.

The recent regulatory interventions have opened up the prospect of binary options being banned altogether. The UK’s Financial Conduct Authority (FCA) said as part of its new proposals for the sector that it needed to be persuaded that binary options was an appropriate product. The regulation of binary option in the UK is due to transfer from the UK Gambling Commission to the FCA at some point in the next year but there has to be a question mark over whether the FCA will take over responsibility given its comments.

Both the Cypriot financial watchdog, CySEC, and the FCA have also issued new rules or proposals with regard to leverage limits that can be offered to customers. As opposed to limits that are in the range of 100 times the original stake, the regulators have put forward maximum leverage limits of between 25 and 50 times.

Totally Gaming says: The retail financial trading sector is under increasing pressure from the regulators and the likelihood is that the pressure will increase this year. Banc de Binary might come to be seen as something of a canary in the coalmine when it comes to binary option in particular.

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