LeapRate Exclusive… LeapRate has learned that FCA regulated broker ETX Capital is making some changes to its trading product lineup, ahead of new MiFID II regulations which come into effect early next year.
In addition to January 2018 heralding the onset of MiFID II regulations across Europe, the new year will also see the transfer of responsibility for regulation of Binary Options in the UK transfer from the UK Gambling Commission to the financial regulator, the FCA.
Along these lines, LeapRate has learned that ETX, the operating name for FCA regulated company Monecor (London) Limited, recently sent out a message to its affiliate base noting that as of January 1 ETX will only be offering Binary Options trading on FX products. ETX currently offers binary trading on a variety of FX and non-FX instruments including stock indices and commodities, of term varying from 60 seconds to 24 hours.
Apparently the change in Binary products offered is more of a business decision being made by ETX, and not really a regulatory-driven one.
ETX might be faced with cutting all Binary Options trading, if pan-European regulator ESMA gets its way. A number of ESMA proposals to rein in the online trading sector released last week includes a ban of all Binary Options trading. UK regulator the FCA, while somewhat non-committal in its reaction to ESMA’s proposals, is nevertheless likely to adopt the final rules decided on by ESMA, expected early next year.
The text of the message sent out by ETX to its affiliates reads as follows:
Under the revised Markets in Financial Instruments Directive (MiFID II) which takes effect on 3rd January 2018, ETX Capital and other providers of financial services in the EU are required to record, report and store data.
MiFID II is the result of work carried out by European regulators that is designed to improve the workings of financial markets with a particular focus on making them more transparent and competitive.
As of 3rd January, 2018, Binary Options will be regulated by the Financial Conduct Authority and will be considered a financial product. The protection that you might expect when transacting in other financial products with a regulated FCA firm will also apply to Binary Options; which means that we will segregate your funds and you will have recourse to the Financial Services Compensation Scheme which will now apply.
As of January 1st, 2018 we shall offer binary Options products for Foreign Exchange products only. Should you have any questions you can contact us by email at [email protected].