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Screenshot of a breaking news alert e-mail from Q2 2017
Binary options brokers registered in Cyprus were today informed of an obligation they have in respect to their Belgian clients. The Cyprus Securities and Exchange Commission (CySEC) has responded to a request of Belgium’s Financial Services Authority (FSMA) and told Cypriot binary options brokers that in case they offer their services in Belgium, they need to have a prospectus for that offer.
In a special announcement, CySEC draws the attention to the Belgian Law of 16 June 2006 on public offers of investment instruments and admissions of investment instruments to trading on regulated market (the so called “Belgian PO Law”).
Pursuant to this law, any public offer of investment instruments (as defined therein) made in the territory of Belgium is subject to the obligation to publish a Prospectus. The law covers offering of binary options and refers to any offer targeting more than 150 investors. This means that binary options brokers marketing their services online are covered by the law too. Cross-border services also fall under the scope of the legislation.
The Cypriot regulator stresses that “in the event that a CIF is offering cross-border investment services relating to binary options in the territory of Belgium, such CIF is urged to immediately proceed to the issuance of a Prospectus which must be approved by the FSMA, as per the provisions of the Belgian PO Law, or immediately cease offering such services in the territory of Belgium.”
The Belgian law in question explains the basic contents of a Prospectus the following way
The prospectus must contain “all information which, according to the particular nature of the issuer and of the investment instruments offered to the public or admitted to trading, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such investment instruments”.
To view the official announcement by the Cypriot regulator, click here.
The Note by the Belgian financial watchdog can be read by clicking here.