FCA Flags Binary Brokers & Affiliates for Committing Criminal Offence in the UK
Starting from the 3rd of January 2018 the UK FCA officially took over the regulation of binary options products in the country. The watchdog today issued a list of companies that are not conforming with the regulatory requirements in the UK. Most notably, the FCA doesn’t stop with binary options brokers, its cautionary warning is directed towards affiliates as well.
The financial regulator has inherited the regulatory responsibility from the UK Gambling Commission that has been overseeing binary options until last year. A number of brokers in the industry have been claiming to have a physical presence in the UK. The action follows up on a Police raid which the Citi Police executed late last year.
Since the start of January, the FCA outlines that all companies that are offering binary options trading in the UK without authorization are criminal offenders. The brokers that ignore the lack of a regulatory oversight will be acting in breach of section 19 of the Financial Services and Markets Act 2000 (FSMA).
Affiliates Not Spared
As part of its new responsibilities, when regulating binary options, the FCA is publishing a list of brokers that are in violation of UK laws. The watchdog has listed a total of 94 companies which include names such as Ayrex, Binary Tilt, CT Option, Investoo.com, Option888 and many others.
The list which the regulator has compiled is based on complaints that the regulator has received from consumers in the UK. The regulator is also actively monitoring the binary options market and is gathering information from partner agencies.
“Many of these firms claim to be based in the UK but the FCA believes that most of the addresses they provide are false and that the firms are actually based overseas. The FCA is examining each of these firms to determine whether any are genuinely operating from within the UK. If they are, the FCA will consider taking enforcement action through the courts to stop their illegal activity,” the regulator elaborates.
The FCA is highlighting in its announcement that customers of binary options brokers typically lose money, and these losses can be significant. The clients that have accounts to trade in the speculative instrument are not covered by any compensation not can complain to the Financial Ombudsman Service or the Financial Services Compensation Scheme in case of an adverse outcome.