LeapRate Exclusive… LeapRate has learned that the new binary options industry association EUBOA held its third board meeting last week, this time in Israel. The first two EUBOA meetings, exclusively reported by LeapRate, took place in Cyprus.
The EUBOA founders – which include some of the leading regulated binary options brokers and platform providers – have decided to be proactive in working with regulators to help both set appropriate rules for the industry and in enforcing them, in a bid to stave off the complete banning of binary options trading due to the bad behavior of a number of (mainly) unregulated brands.
At EUBOA meeting #3 last week, the two main issues discussed were trading benefits to clients (bonuses), and withdrawals.
Bjorn Andersen, EUBOA
EUBOA Chairman (and former Senior Vice President, Legal and Compliance at Saxo Bank) Bjorn Anderson told LeapRate:
I hope all EUBOA members will follow through and make clear commitments to move quickly to ensure a fairer and more structured binary option market. We are serious and want to ensure an industry that better protects clients and eradicates bad practice.
The two main resulting action items, as we understand, were:
- the complete termination of the use of virtual bonuses when trading in binary options, both as an enticement to attract new clients, and as a retention tool. In addition to virtual bonuses – which only accrue to the client if they engage in a certain amount of trading – the use of real money bonuses will also be limited and will not be presented to the client in a misleading manner.
- same-day withdrawal process.
Four of the licensed broker firms represented on the board of directors have apparently agreed to implement these changes within three months: Anyoption, Banc de Binary, Spot Capital Markets and Spotoption Exchange.
Apparently not all of the EUBOA members have yet agreed to the bonus limitations (hence, just the four names listed above). However all the represented EUBOA parties agreed to implement the same-day withdrawal process, which will be effective as soon as possible.
The EUBOA decisions with regard to both client bonuses and same-day withdrawals are in line with recent recommendations by European pan-national regulator ESMA. The EUBOA is committed to ensuring a regulated industry that reflects the recommendations of Europe’s head regulator, even though these ESMA recommendations have not yet been implemented by national regulators across Europe.
The EUBOA met as the binary options industry continues to come under more scrutiny both in Israel – where many binary brokers and platforms call home – and elsewhere. In Israel, financial watchdog ISA is considering regulation which would ban brokers (and possibly platform providers) from operating in the country. Abroad, regulators continue to call out wayward brokers, including a recent $1.7 million SEC fine to CySEC regulated EZTrader, a unit of publicly traded EZTD Inc (OTCMKTS:EZTD), for misleading investors into trading binary options over the internet.