In a recent development that has caused the entire binary options industry to sit up and pay attention Malta has announced that it is due to be setting up a Maltese Financial Services Authority that will be tasked with the regulation of binary options brokers, as well as other trading instruments. The decision is due to end Cyprus’s hegemony over the regulatory aspect of the industry and may lead to many brokers leaving Cyprus in order to pursue regulation in Malta
With the market for binary options rapidly growing beyond all expectations, it isn’t a surprise that another low tax jurisdiction would step forward as a regulatory body for the industry. There is currently only one body (the Cyprus Securities and Exchange Commission, or CySEC) regulating binary options in Europe, and although CySEC is currently vetting a large number of applications for licensing, it has to date only granted one licence, to Banc de Binary, which was awarded at the close of 2012.
Presently in Malta companies offering financial services such as forex trading are regulated under the Maltese Lotteries and Gaming Authority (LGA). However this organisation was set up to regulate the gaming industry and a legitimate financial services ombudsman is needed to regulate not only the existing financial services providers in Malta, but the huge and ever-growing number now opening binary options brokerages
The proposed Maltese Financial Services Authority will develop its own regulatory framework to guarantee that traders are protected from disreputable companies and and that their deposits are completely protected and guaranteed.
With Malta being an E.U member these new regulations will have to completely come in line with European directives in order to allow MFSA regulated brokers to be able to come under the E.U’s Markets in Financial Instruments Directive. This, like CySEC regulated companies, will enable them to operate anywhere within the E.U’s jurisdiction without the need for further licensing.
It was also recently announced that the first binary broker to be regulated by the Maltese Financial Services Authority will probably be OneTwoTrade, which is presently already licensed by Malta’s Lotteries and Gaming.
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.