FCA takes a “name and shame” action against unregulated binary options firms
The UK regulator publishes a list of 94 unauthorised binary options firms that target UK customers.
As FinanceFeeds has reported earlier, the UK Financial Conduct Authority (FCA) has taken over the oversight of the binary options segment with effect of January 3, 2018. The firms involved in binary options trading in the UK are now required to be authorised by the FCA.
Firms that lack such authorization and continue with binary options activities beyond that date will be doing so in breach of section 19 of the Financial Services and Markets Act 2000 (FSMA), which is a criminal offence, the regulator explained.
In its first move as a regulator of this market segment, the FCA has published a list of unregulated binary options firms that target UK investors. The list features 94 entries, with notorious entities like BinaryBook among them.
The regulator explains that the list is based upon information that the FCA has received from consumers, partner agencies and from monitoring the binary options market. 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 currently 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 warns that any consumers who trade with an unauthorised binary options firm will not have access to the the Financial Ombudsman Service or Financial Services Compensation Scheme should things go awry.
Effective January 3, 2018, individual complaints regarding binary options can be referred to the Financial Ombudsman Service and clients of binary options firms have access to the Financial Services Compensation Scheme. However, those protections will not compensate investors for any losses from trading. The FCA reiterates its warning about binary options scams and the high risks associated with trading binary options.
The UK authorities have recently sought to clamp down on binary options fraud. On October 17, 2017, the City of London Police conducted a day of action, which involved visiting 20 offices with the City of London Corporation’s Trading Standards. At the end of October, the UK High Court wound up binary options scam firms behind Magnum Options, following an investigation by the Insolvency Service. And in November 2017, the UK Insolvency Service announced that two binary options firms – Right Corp Limited and Curve Point Limited, had been placed in provisional liquidation. The action followed an investigation by Company Investigations of the Insolvency Service.
