Binary trading used to be only a minor part of the global trading market. In 2008, it became separate and it has gained huge popularity ever since. Before this market became separate, there were no clear regulations concerning binary trading, nor there was any standardization. Once the market became independent, there was the need of making it more organized and orderly.
Who regulates binary brokers?
With the rising popularity of binary trading, the number of binary brokers rose as well. Unfortunately, whenever a certain concept becomes popular, there come plenty of frauds and scams related to it. Therefore, in addition to regulated and legal brokers, there are also many of those who serve only to harm their users and take money from them in a fraudulent manner.
Regulatory bodies of binary brokers are different, and it depends on the country or the continent which regulatory body will give license to a broker. Some brokers have license from only one regulatory body, while the others have even more than one license.
There are many smaller financial institutions for regulating binary brokers, and they operate on the state level. Many brokers have licenses from financial institutions of their countries, but it is a good recommendation if they also have a license from some of the major regulatory institutions. The largest and the most trusted such institution is Cyprus Securities and Exchange Commission (CySEC). It is located in Cyprus and licenses brokers from the European Union. You can also look for the licenses of CFTC (USA), ASIC (Australia) and DIFC (United Arab Emirates). There are also FSA in the UK and FFMS in Russia.
Why it is important that the broker is certified?
Trading with a certified broker protects the traders from any potential harm, scam and unjust loss of money. It takes some time and a lot of effort and honest business or the brokers to obtain the license. If the broker is licensed, it means that they have proven to be fair to their clients and that their platform is not a scam. Choosing a certified broker gives you serenity and peace so you do not have to worry about being cheated and scammed.
How to check if the broker is certified
There are two main ways of checking whether the broker you want to trade with is certified. First, you can visit the broker’s website and find this information there. Certified brokers always point out this information, and it is often on a visible place on the website. You should stick with popular brokers proven to be licensed, like 24option. Even if the licensing information is not on the front page or an immediately visible place on the website, it can be contained in the About Us section.
Another way to check if the broker is licensed is by visiting the website of the regulatory body. For example, you can visit CySEC’s website, and find the list of the broker they have licensed. There is an extensive list on the website, which is updated regularly and consists of the details of the broker and the license. This method is even more secure, and you can use it on its own or combined with the previous one to be absolutely certain.