Bring Binary Options Products Under
Binary options products were the most enquired-about category for the FCA centre in the last year.
Binary options made up 17 percent of the 106,800 enquiries to the FCA’s consumer contact centre between December 2015 through November 2016, according to the regulator’s most recent data on the UK’s investment products.
Binary options products were the most enquired-about category for the FCA centre in the last year. Consumers contacted the UK watchdog about several product types, including shares (14%), forex (13%) and bonds (10%). In addition, regulatory status amounted to 55% of total inquires. Typically, consumers were checking to see if firms are authorised to sell their products.
The watchdog attributes the increasing popularity of binary options to the current low interest rate environment. However, the FCA added that it has concerns that UK consumers are being increasingly targeted by fraudsters who offer opportunities to invest in binary options. Many such illegitimate binary options firms do not appear to be regulated by any agency, either in the UK or abroad.UK-based binary options companies are currently regulated by the Gambling Commission, but the FCA wants to bring them under its authority, the regulator explained in the report. Until then, investors do not receive the protection offered by the UK’s financial services regulatory framework when purchasing binary options.
Finally, and in line with practices across most of the EU, the FCA expects to bring certain types of binary options within its regulatory perimeter alongside the implementation of the MiFID II, which will apply from 3 January 2018.