Consob, which was amid the first regulators to ban access to binary options websites, admits that it has a little say on activities of binary options brokers.
The efforts by regulators and law enforcement agencies all over the world to put an end to binary options fraud have been on the rise lately. Quebec’s financial markets watchdog is the most recent example of a regulator trying to put an end to binary options offering.
Italy, on the other hand, has a longer history of controversial relations with binary options brokers. The Italian financial services sector regulator Consob was amid the first to act decisively against unregulated binary options brokers and ban access to a number of their websites thanks to co-operation with legal institutions. This happened back in the spring of 2013. Since then, however, the binary options industry has proliferated, with Consob noting the rise in the number of individuals and business entities that offer trading in such instruments without having the proper authorization to do so.
The announcement includes the traditional warnings against risks of losses and the necessity to consult the websites of national regulators to check whether a company is licensed.
More importantly, in its latest announcement, Consob admits that it has only limited powers to tackle cases of binary options fraud. Putting it bluntly, the regulator may secure investor protection only to Italian clients of Italy-based branches of legitimate (i.e., licensed in Italy) investment services providers. This means that clients of companies without branches in Italy cannot count on protection from Consob.
Furthermore, if a binary options broker is based outside of Italy and has no branch in the country, investors cannot make use of the services of the recently established Financial Disputes Arbitrator (FDA) either.
It is sad that one of the regulators being first to act against binary options fraud is pushed to admit its obvious helplessness when it comes to fighting this type of activities. Regulators are now restricted to publishing warnings which the public may or may not see.
The efforts of France’s financial markets regulator AMF, which can now count on a piece of legislation – the Sapin 2 law, to prohibit advertising of binary options, are worth noting. The recent involvement of EUROPOL into the fight against binary options fraud is also a good piece of news, as the enforcement agency has more extensive powers than financial regulators. For one thing, it may prosecute employees of binary options brokers, including sales guys using aggressive and abusive techniques to solicit money from investors.#binary options, #Consob, #Financial Disputes Arbitrator (FDA)