EUBOA – European Brokers Association

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EUBOA – European Brokers Association

Binary Option industry creates EUBOA

As the binary options landscape starts to mature, some of the largest organisations in the industry have come together to form EUBOA – The European Brokers Association. Here, we explain who is involved, and what the aims of this new body are.

What is EUBOA?

The binary options industry is still in it’s infancy, relative to other forms of investment. This has led to substantial ‘growing pains’ as well as a number of episodes which have severely damaged the image of both the industry and the investment vehicle itself.

The European Brokers Association (EUBOA), was created in the late summer of 2020. The aims are simple:

  • Establish a manifesto and code of conduct
  • Communicate directly with European regulators
  • Improve the image and professionalism of the industry

2020 saw a host of regulators impose harsh restrictions, or even complete bans, on binary options. This was in response to the number of fraudulent operators working in binary options, and the scale of complaints regulators were seeing. Largely from unregulated or unlicensed operators.

Legitimate brokers are keen to restore the image of binary options, but realise there is much to be done in order to restore faith in the industry. They hope the EUBOA will give them a strong, self-regulatory platform. From here, the aim will be better dialogue with regulators, with the objective of creating a number of ‘best practices’ among binary brokers and much improved customer service.

Who is involved in EUBOA?

Most of the established binary options firms, or platform providers are involved:

Brokers

  • IQOption
  • Banc de Binary
  • 24Option
  • AnyOption

Platform Providers

  • TechFinancial
  • SpotOption

This represents a large proportion of the binary options market share, and therefore gives the EUBOA plenty of clout.

What are the frequent binary options complaints?

Some of the issues facing this new body, will include:

  • Marketing channels, Affiliates and the miss-selling of binary options. A huge problem in binary options is the marketing of binary options as a “get rich quick” scheme. This form of marketing is often used by affiliates, but also by the brokers themselves. Often referred to as ‘funnels’, they grossly misrepresent the high risk nature of binary options and mislead potential customers.
  • Unlicensed subsidiaries running within regulated brokers. This has been a very common problem. A broker regulated in the EU, would move traders who reside outside of the EU, to an unregulated subsidiary. This allows the broker to get around regulatory restrictions that apply in the EU, and puts the trader at significantly greater financial risk.
  • Unregulated brokers using the software and services of platform providers. New brokerages will often setup as a ‘white label’, using the trading platform of a third party provider. These white labels are normally unlicensed and unregulated. They are also the most likely place to find unlawful or unethical behaviour. While the platform provider does not have absolute control over how these firms use their platform, the EUBOA will hope that via best practise and code of conduct guidelines, they will play a bigger part in ensuring the quality of the operators using their platform.

What should we expect from EUBOA?

It will be very interesting to see how this develops. Binary options firms are clearly concerned with the recent rise in regulatory pressure. It would however, take a huge amount of optimism to think that the industry could be self-regulatory at this stage.

The problems in binary options are many and widespread, so much so that the investment vehicle itself – the very concept of a “binary option” – has been tainted. While the setting up of EUBOA looks positive, those parties involved could do well to resolve the issues within their own businesses before suggesting a ‘code of conduct’ for others.

The appointment of Bjorn Krog Andersen is encouraging however. With 6 years experience in Legal and Compliance at Saxo Bank, and previous experience working in the law, his appointment does signal that the new body is going to be serious in tackling the issues in the industry.

European Brokers Association Issues a Manifesto

October 19, 2020 12:59 pm

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Board of the European Brokers Association (EUBOA) only held their second meeting and already came up with manifesto, code of conduct and set of rules regarding interaction with regulators. EUBOA was established in September 2020, as a self-regulator for binary and forex brokers.

Because of strict regulations and unfair competitors without a proper license, binary and forex brokers with regulated status are in unfavorable position. Not only they have to oblige the rules that are getting stricter each month, but also have to operate in an unfriendly environment crowded with companies that can’t be prosecuted as they are not licensed.

Binary Brokers Manifesto

During the second meeting, EUBOA members (including big players like 24option, Banc De Binary, IQoption, AnyOption, and SpotOption and TechFinancials binary options platform providers) issued some guidelines for regulated brokers (who are also the only ones who can request a membership).

The main goal of the manifesto is to reduce malpractices that put users in harmful situations and to encourage positive and not restrictive regulation. Remember, restrictive regulatory framework only increases numbers of scams and unregulated brokers, especially when regulated operators can no longer offer their services the same way unfair competitors can.

One of the main problems that were recognized in the meeting was only partial regulation of fast-growing industry of financial trading.

Among the main goals is to develop a good relationship and dialogue with regulatory bodies all over Europe, as EUBOA believes it might increase professional behavior among regulated brokers and prevent scams from getting a large piece of the market.

EUBOA also wishes to increase the level of professionalism in the binary industry and to hold meetings every month until the situation in the binary industry becomes satisfactory.

Binary Options Industry Challenges

Let’s remember, after a period of rapid growth, the binary industry is in the turmoil. Belgium banned binary trading altogether, and France banned only advertising, while there’s a rumor that Germany will also join the club of countries that are trying to limit the presence of binary industry.

Even though such moves are done with good intentions, they often make the situation even worse. For example, after Israel and Belgium banned binary options, the market became over flooded with unregulated brokers with no code of conduct, and keen to unprofessional behavior.

Instead of protecting traders, such approach made trading even more dangerous, as it became impossible to trade with a regulated broker.

At the moment, EUBOA has no credentials and is at the very beginning so it is hard to say whether or not will they be able to influence regulators.

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a Complete Guide for Binary Options Trading

To reflect the growth of the binary options industry, some of the largest organizations in the market have come together and decided to cooperate. In September 2020, they formed EUBOA – The European Brokers Association. Among its members are the top regulated brokers that are highly ranked by traders all around the world.

EUBOA is an organization that aims to become one of the biggest influencers in the binary options and Forex trading market. But what challenges does it have and how can it influence the current state of affairs? Let’s find out.

European Brokers Association

Comparing to other forms of investment, the binary options industry is still in its development stage. This has led to many changes and challenges for the well-established brokers and the market in general. With the aim of regulating the way the binary options trading is growing, the major participants have created The European Brokers Association.

Brokers that are members of the Association:

As you can see, the members are really some of the major players. In addition, only regulated brokers can request the membership status. This is done to assure the quality of discussion within the Association and secure reputable voice behind any of its decisions and actions.

What are the challenges for the Binary Options Industry?

Despite growing fast and gaining a lot of recognition from traders, the binary options industry also faces some challenges that EUBOA is aiming to solve. Some of these challenges include:

  • Misleading marketing. Many unregulated brokers and other players in the market position binary options trading as “easy-to-get-rich” activity. As more experienced traders know, binary options can be profitable and extremely positive, but it also requires some knowledge and effort.
  • Regulations leading to negative results. Lately, some European countries imposed regulations on advertising or even banned binary options trading. While it is possible it was done with good intentions, more often than not it makes the situation worse. For instance, the ban on binary options in Israel and Belgium only led to more unregulated brokers coming to the market. So instead of “protecting” traders by making it impossible to trade with a licensed broker, it is important to urge countries to put their efforts into regulating the industry.

Those are just some of the challenges that major figures in the industry are trying to overcome. And EUBOA is aiming to help them do this with its activities.

European Brokers Association Agenda

During its second meeting since the formation, the Association has issued the manifesto of the organization. Its main goal is to decrease the number of malpractices that put traders in danger and encourage positive rather than restrictive regulation of the binary options industry.

One of the main goals of the Association at this point is to establish strong partnership relations with European regulatory bodies and open a constructive dialogue that will benefit both parties. EUBOA believes it will improve the situation on the market and assure positive long-term development for the binary options industry.

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