Regulation of binary options trading platforms is done at the country level. Oversight of regulatory authority in market trading may be shared across several jurisdictions. Binary options trading platforms overseen by the regulatory authorities of Cyprus Security and Exchange Commission (CySEC), UK Financial Service Authority (FSA), the US Securities and Exchange Commission and US Commodity and Futures Trading Commission (CFTC) constitute the majority of the regulated trading platforms globally.
History of Regulation
Prior to virtual trading exchanges, the binary options market was conducted over-the-counter (OTC) broker direct. No longer considered exotic financial instruments, the binary options trade has expanded since its introduction on the Chicago Board Options Exchange (CBOE) in 1973. At present, the binary options trade is subject to uneven regulation. Segregation of individual client accounts of their funds must be maintained by the brokerage sites as part of the regulatory stipulations to rules on secure deposit.
CySEC regulation and registration of forex binary options trading is most common in oversight of many of the pioneer exchange platforms at time of initial public offering (IPO). In 2012, the CySEC announced that binary options brokerage companies in operation would come under the rules of the Investment Services and Activities and Regulated Market Law of 2007-2009. This ensure that EU based brokerages are in adherence with the legislation. Registration by the CySEC requires that binary options brokers file tax returns and submit two-year business plans in compliance with those guidelines.
Granting of licenses to brokers, regulatory authorities ensure that financial capital meets guidelines to listing and operations of binary options platform. At present, approximately 95% of those platforms are not regulated. This is also the case for service provision of integration of real time, price quote and payout software application as system by vendors as part of those platforms.
The ‘4’ Top Regulated Binary Options Trading Platforms
Banc De Binary
Regulated by both the FSA and CySEC, Banc De Binary is a lead web based binary options trading platform offering volume asset options exchange. Banc De Binary lists assets exchanged on the Commodities, Indices, Stock and Forex markets. Expiry date on binary options contracts is scheduled according to client preference. Banc De Binary web applications include user access to One Touch and Options Builder portfolio management features.
The site recognized as a global options trading platform is regulated by a number of European Union countries, including the FSA and CySEC. OptionWeb offers clients a maximum of 85% on winning trade payouts. The site provides traders access to Options Builder, and other Web-based dashboard features such as One Touch and 60 Seconds applications for binary options trade of commodities, currency, indices, and stocks.
Recognized as one of the top professional online trading platforms, IG Markets offers brokers some unique financial products distinct from other markets under the regulatory authority of the FSA.
The North American Derivatives and Exchange is regulated by the CFTC. NADEX is a clearinghouse and exchange for trading of commodity and stock contracts.