New Zealand’s FMA monitors binary options but no action yet

Maria Nikolova

The regulator has spotted a rise in FX and binary options firms targeting New Zealand investors.

New Zealand’s Financial Markets Authority (FMA) has earlier today published an updated version of its Strategic Risk Outlook. The new version of the document, which outlines priorities for the regulator for 2017, concerns binary options too.

The FMA says that it has noticed rise in Forex and binary options trading providers targeting New Zealand investors to trade via their platforms. This is hardly surprising, we may note, given that as many jurisdictions are considering tougher regulations for binary options many companies are cutting and running and/or shifting to jurisdictions where regulations for binary options is either non-existent or loose. Obviously, New Zealand is an attractive destination for such businesses flourishing, since the FMA has spotted the trend.

In its Strategic Risk Outlook, the FMA underlines the risks associated with binary options, given that they often use leverage and investors are not fully aware of the chances of losing their money.

The New Zealand regulator admits that “In some cases, the businesses are just operating investment scams”.

Nevertheless, the watchdog takes a soft stance regarding binary options regulation, saying that “We will continue to monitor these types of products and how they are sold to better understand what future action we would take”. Apparently, the New Zealand regulator is opening the door for an infinite period of time for companies offering binary options.

Others, in the meantime, have acted more decisively. France has banned all sorts of advertising of high-risk financial products, including binary options, thanks to the Sapin 2 law. Quebec’s financial regulator is seeking to amend the Canadian province’s Derivatives Regulation in order to formally prohibit the offering of specific types of binary options to Quebec investors. Under the regulatory proposals, binary options with expiries of less than 30 days will be banned.

The latest jurisdiction to change the regulation of the binary options sector is Cyprus. A couple of days ago, CySEC published a Circular outlining proposed changes to requirements for providers of binary options trading registered in Cyprus. The new rules will see some binary options types become no longer acceptable – the tenor must be for a period of at least 5 minutes. The strike prices will have to be fixed for all digital contracts within a contract series, whereas firms will be required to store details of every calculated expiration value for a period of 5 years after calculation.

  • Read this next

    Digital Assets

    Celsius founder Mashinsky agrees to shared lawyers with Sam Bankman-Fried

    Former Celsius CEO Alex Mashinsky has addressed potential conflicts of interest in his legal representation during a brief hearing in a New York courtroom.

    Digital Assets

    Sam Bankman-Fried captured in first jail photo

    Sam Bankman-Fried, the once-billionaire founder of FTX, has been spotted looking quite different with a new beard and a slimmer figure in a photo that’s been making rounds, reportedly taken inside New York’s Metropolitan Detention Centre.

    Market News

    Bitcoin stalls at $53,000 level, Ethereum reaches $3,000

    Bitcoin (BTC) faced renewed resistance at the crucial $53,000 level on Tuesday, indicating that the primary cryptocurrency is likely to continue consolidating before making its next decisive move.

    Digital Assets

    UK targets new laws for stablecoins and crypto staking within six months

    The United Kingdom is gearing up to enact fresh legislation regulating stablecoins and crypto staking within the next six months.

    Web3

    Masa’s Milestones Before Mainnet Launch

    Since its launch in August 2022, Masa, the premier decentralized network for personal data, has experienced rapid growth, securing over 1.2 million unique wallets and accumulating more than 23 million data points. Despite a bear market, the network has attracted over 40,000 node operators to its testnet within just 18 months.

    Digital Assets

    Web3 Greatest Startup Competition Hits $10M in Prizes

    We’re thrilled to announce the return of the highly anticipated Startup Competition at Paris Blockchain Week. With a staggering array of prizes totaling over $10 million, encompassing funding, grants, credits, accelerations, listing, and more, this competition has become a cornerstone event within the blockchain startup ecosystem.  

    Digital Assets

    Hedge fund Tyr Capital faces dispute over exposure to FTX

    Crypto hedge fund Tyr Capital found itself embroiled in a dispute with one of its clients concerning its investment exposure to the bankrupt digital assets exchange FTX, as reported by the Financial Times on Tuesday.

    Retail FX

    Plus500 revenue down to $725 million, unveils $100M share buyback

    Israeli-based, but London-stock market listed Plus500 Ltd (LON:PLUS) today reported its 2023 results, which came “significantly ahead” of analysts’ estimates.

    Education

    Strategies for Profiting from Interest Rate Fluctuations

    The world of Forex trading is a complex and dynamic domain where interest rates play a pivotal role in shaping currency values. Octa’s team of financial experts delves into this intricate relationship, providing traders with a comprehensive understanding and strategies to harness economic indicators for enhanced trading performance.

    <