Brokers fulfill CySEC requirements

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Brokers fulfill CySEC requirements

A few months ago CySEC released a circular, wherein apprised all brokers of the new rules. According to the rules, among other things, all regulated brokers should not only show the mid-price, but also the bid and ask price, as we can see, for example, in banks when exchanging currency. More about this Circular here: CySEC tightens the rules for binary trades.

Bid and Ask price

It is simply the difference between the Bid and Ask prices. Each asset, whether it is gold, silver, Google shares or currency pairs has their own bid and ask price. These prices are slightly different. Why do they exist?

When I come to the bank and want to exchange Euros for Dollars, for 110 € I would get $ 100. Now, on the contrary, for $ 100 I’d receive a little less, only about 107 €. Now we can only exchange that for $ 98, and so on …

The difference between these prices is the fee that the bank charges for mediating the exchange. Binary options brokers would only show us the mid price (average bid and ask prices) until now and this is what CySEC doesn’t like.

The first changes at Banc de Binary and Optiontrade

The first platform to show mid-price is Spot Option, which is used for example by the broker Optiontrade or Banc de Binary. In the picture below you can see how this platform provider displays bid and ask price.

Optiontrade platform showing the ask and bid

Quoted prices origin

The circular also contained a point which is related to the origin of the quoted price. As we can see, Banc de Binary has already been thinking about it and it shows the origin of the price (marked with red rectangles)

Banc de Binary platform showing the ask and bid prices and also asset price origin

Another change that could affect binary options platforms will have to be full transparency of the quoted prices. Thus, if the broker offers trading with oil prices, they always have to tell customers (traders) the exact asset’s name with it’s origin. It is not enough to show a price of oil, but also that the price has been obtained from TI Crude Oil (Dec 15) NYMEX.

Newly CySEC also mentioned that they are expecting a smooth display of current prices updated at least every second from the binary options brokers. The price will therefore have to be updated frequently so we, traders, always know what we are dealing with.

Other brokers

Other brokers such as topoption or stockpair or their platform providers have still not managed to react to the changes. According to us, they are working on it, but they need to be very precise in order to assure a smooth flow of the platforms or its safety.

Brokers still have a few weeks to ensure that the changes are applied or they will either be fined for the delay or their license will be removed. We hope that brokers will manage to apply the changes on time.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Author

More about the author J. Pro

Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn’t very successfull with dropshipping on Amazon and other ways of making money online, and I’d only earn a few hundreds of dollars in years. But then binary options caught my attention with it’s simplicity. Now I’m glad it did because it really is worth it. More posts by this author

CySEC Regulation & Forex Brokers in Cyprus

CySEC is one of the most popular regulatory agencies in the world when it comes to regulating all types of financial companies operating out of Cyprus. The Cyprus Securities And Exchange Commission was introduced way back in 2001, even before Cyprus joined the European Union in 2004. Ever since Cyprus became a part of the EU, the CySEC also became a subsidiary of the European MiFID regulatory organization, thereby enabling all CySEC members to carry out business across the European continent.
Cyprus is a highly popular attraction for Forex brokers who wish to set up base in a relatively easy and convenient location. Cyprus offers a lot of advantages when it comes to setting up a corporate headquarter, which is one of the main reasons why Cyprus sees the maximum number of Forex brokers offering financial services for traders across the world. CySEC Forex brokers are completely accountable to the CySEC under the MiFID directive, and are liable to legal action, including hefty fines and suspension of licenses, for non-compliance of the stipulated laws and guidelines.

CySEC has relatively easy regulatory guidelines and a fast approval process that allows CySEC regulated brokers to set up camp in Cyprus with minimum formalities. Cyprus was also formerly known as a tax haven before being admitted into the EU, which provided additional incentives for companies who wished to save on taxes and increase their revenue.
CySEC also used to be broker friendly in terms of fines or suspension of licenses for misdeeds, which attracted criticism from all quarters of the globe, especially from other European Union members and their regulatory agencies. CySEC regulated Forex brokers have been known to indulge in financial malpractices and fraud, which had resulted in clients losing millions of dollars on an annual basis. This forced the CySEC to reform its regulatory guidelines to ensure that all regulated Forex brokers adhere to the most stringent laws to protect clients’ funds and interests.

A Pioneer In The Field Of Regulations

While CySEC received wide-spread criticism for its governing policies during the initial days, CySEC is clearly a pioneer in terms of bringing ground-breaking regulatory guidelines that changed the financial markets for the better. CySEC is the first regulatory agency in the world to regulate binary options by terming it as a valid financial instrument and is at the forefront of regulating a majority of leading binary options brokers in the entire world. CySEC paved the way for all the other regulatory agencies to quickly follow in their footsteps by recognizing binary options as a valid financial instrument and regulating related brokers in their respective countries.

How Are The Consumers Protected?

Since 2020, CySEC has been continuously updating their regulatory framework to incorporate several new initiatives that are designed to safeguard consumers against financial crimes and abuse. CySEC now works extensively with the European MiFID to create guidelines that concentrate on ensuring that all compliant members are honest in their dealings with the general public to ensure the integrity of the markets.
Unlike the NFA or CFTC, CySEC does not entertain consumer complaints directly. The CySEC has instructed all regulated members to address their clients’ complaints in an efficient manner through a dedicated customer support channel. Therefore, a trader should contact their broker directly regarding any complaints and await further instructions on a problem resolution. In case the client does not receive an amicable solution, CySEC recommends contacting the Financial Ombudsman, or the Court as a last resort.
The primary mission of CySEC is to regulate the markets and to supervise the conduct of financial organizations operating on Cyprus soil. While investor protection is a top priority in their updated mission, consumers can not contact the CySEC directly for any complaint resolution or arbitration services.

Verifying The Authenticity of CySEC Regulated Forex Brokers

The relatively easy CySEC regulations provided scam Forex brokers to make false regulatory claims and trick unsuspecting users. Current CySEC regulations state that all Forex brokers are required to quote the five digit CySEC license number prominently on their website. Consumers are also encouraged to verify the authenticity of a Forex broker by confirming the license information through the official CySEC website.
CySEC frequently updates its circulars and warning notices to inform the public about members that have been fined or have their licenses revoked for any financial wrongdoings. In case the consumers are confused about the status of any particular company, they can directly contact the CySEC to get more information.

Criticism & Way Forward

CySEC can be considered as a controversy’s play child since most EU regulators often criticise the way CySEC works. Most regulators often feel that the fines levied on members for non-compliance is small, and companies are let off with a simple warning for financial frauds that can get them banned in other countries. Therefore, the MiFID constantly oversees the working of the CySEC to ensure that their regulatory guidelines are continually adjusted to bring financial firms in line with standard protocols.
Despite the fact that CySEC has a long way to move forward in terms of regulation, it is indeed one of the most popular regulatory organizations that have achieved a tremendous growth rate. Financial companies still favour CySEC over other agencies due to the relative ease of regulation and lesser formalities. However, all of that is set to change in the next few years if CySEC hopes to be taken seriously by the MiFID.

CySEC Regulated Forex Brokers

In this article, I will tell you about the Cyprus Securities and Exchange Commission (CySEC) and best CySEC regulated forex brokers.

The Cyprus Securities and Exchanges Commission (CySEC) is the independent financial authority in the Republic of Cyprus.

CySEC is one of the most reputable financial conduct authorities around the world. Comparing to other conduct authorities, CySEC is more active in terms of inspecting Forex Brokers and informing investors for suspicious activities.

By Cyprus becoming a member of the EU in 2004, we must note that CySEC complies with all the rules set by MiFID (Markets in Financial Instruments Directive).

In addition, all the retail clients are covered by the Investor Compensation Fund up to €20,000 in the event that a CySEC regulated broker becomes insolvent.

In this article, you will find the best CySEC regulated Forex Brokers according to my research on brokers.

What does the CySEC Regulation offer investors?

CySEC imposes some strict requirements to regulated entities. These requirements ensure that CySEC regulated forex brokers provide their services in a transparent and fair manner.

If you are an investor trading with a forex broker regulated by CySEC, you will benefit from the following manner:

  • All your funds are kept in a segregated account which the broker is not permitted to access. This ensures to prevent any abuse of your funds by the broker. Thus, the broker does not use your funds for its own operational needs.
  • CySEC regulated brokers are required to maintain minimum net capital to meet the capital adequacy requirement. This ensures that the broker always has sufficient capital to fulfill its obligations arising from the transactions of its clients.
  • CySEC regulated brokers are required to submit regular financial statements to CySEC. In this way, the broker cannot hide anything that concerns investors.
  • Before any forex broker is licensed by CySEC, the broker must participate in the Investor Compensation Fund Scheme. This fund protects investor if the broker becomes bankrupt and unable to fulfill its contractual obligations. According to this compensation scheme, an investor is protected up to 20.000 euro.
  • The brokers are obliged to obey all the rules they have committed in order not to lose their licenses.

Here are the best CySEC regulated brokers according to my reviews.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Like this post? Please share to your friends:
Binary Options Trading Step By Step
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: