UK FCA registers steep growth in enquiries about binary options

Maria Nikolova

The FCA reminds that in less than a year, it will regulate certain types of binary options.

The UK Financial Conduct Authority (FCA) has published some fresh data from its Consumer Contact Center, with the report showing that binary options were the type of investment products that saw the most growth in enquiries for the period from December 1, 2015 to November 30, 2016.

According to the report, binary options accounted for 17% of enquiries within investment products. Consumers have been contacting the FCA mainly to verify whether firms offering binary options are regulated. Other product types where the Contact Center received a lot of enquiries are shares (14%), Forex (13%) and bonds (10%).

The FCA highlights that it does not currently regulate binary options because in the UK they are classified as a gambling product rather than a financial one. Hence, investors do not receive the protections offered by the UK’s financial services regulatory framework when purchasing binary options.

Consumers enquiring about binary options are usually referred to the Gambling Commission, which regulates operators offering binary options (if the operator has remote gambling equipment located in Great Britain) to check if the operator is licensed. The Gambling Commission advises consumers not to use an operator if they have any doubts about whether it is licensed.

However, HM Treasury is bringing certain types of binary options within the regulatory perimeter alongside the implementation of the Markets in Financial Instruments Directive (MiFID) II, the FCA notes. The new rules will apply from January 3, 2018. This means that certain binary options will be regulated by the FCA rather than the Gambling Commission.

Looking further at the data from the latest bulletin, we see that more than 13,100 enquiries (14% of total) related to investment products. Almost 60% of enquiries were from consumers aged over 55.

Meanwhile, Europe is increasingly trying to tackle binary options fraud, with Cyprus seeking to implement new rules for the binary options sector and the Netherlands following France’s example in proposing to outlaw advertising of high-risk financial products, including certain types of CFDs and binary options. EUROPOL is also reported to have joined the fight against binary option fraudsters.

Read this next

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

<