Many CySEC regulated companies, especially in the field of binary options, are regularly reported to be targeting clients abroad and managing to win their custom by highlighting the fact that they are CySEC regulated.
However, the CySEC regulation only means that the passporting of such services is allowed in other EU jurisdictions alone and not on a global basis. In any case, it should be pointed out that even if CySEC is lately appearing to adopt a less lenient stance against broker and be seeking a stricter enforcement of rules, it is not expected nor does it intend to be able to protect customers outside its jurisdiction boundaries.
Banc de Binary which is a popular binary options broker headquartered in Cyprus and licensed by CySEC was fined last year by the regulator for alleged violation of several provisions of the Cyprus legislation. Although the company continues its operation and also tries to maintain a good reputation in its home base, often through corporate social responsibility actions, such a recent donation to the country’s Deaf School, it is also at the receiving end of several warnings against it by regulators of other jurisdictions.
Such regulators have included the Canadian authorities and back in April 2015, the Australian Securities and Investments Commission (ASIC), which had announced that Banc de Binary is an unauthorized service provider in Australia, also urging retail traders in its jurisdiction to avoid doing business with it.
The Australian region is attractive for brokers and many try to attract customers from down under and also establish a foothold in the area to also use it as a springboard for activities in the promising and potentially lucrative Asia Pacific region. This is the main reason why authorities and regulators in this part of the world are becoming very strict and are giving brokers a hard time when they apply for licenses to operate in their jurisdictions.
A new development on this front came just yesterday when the New Zealand regulator, namely the Auckland based Financial Markets Authority has proceeded with issuing an official warning on its website, warning the public that Banc de Binary is not authorized to provide its services in New Zealand. As a reason for issuing the warning the FMA mentions “the recent warnings by the Australian Securities and Investment Commission in relation to Banc de Binary Limited.”
It is also noted that the ASIC warning that was issued against Banc de Binary was advising that this company could be involved in a scam and it also mentioned that it had made unsolicited calls or sent emails about investing, financial advice, credit or loans, while it does not hold a current Australian Financial Services (AFS) licence or an Australian Credit licence from ASIC.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.