UKGC Regulation Advice
The UK Gambling commission (UKGC) has issued advice to Binary options traders in the UK. They want to ensure consumers fully understand the products on offer, but most importantly, use only licensed and regulated brokers.
The UKGC has been responsible for the licensing of binary option brokers in the UK since the 2005 gambling act. The UK government however, is considering moving responsibility to the Financial Conduct Authority (FCA). FCA regulation would offer UK consumers far greater protection and would seem a sensible step, given the growth of binary options trading.
The UKGC had not previously shown any great enthusiasm to step into the binary options landscape, so this latest press release is to be welcomed. In it, they suggest consumers “fully research the market”.
One of the key points made by the UKGC is that traders should be sure to use licensed and regulated brokers only – “consumers who are unsure or have doubts over an operator, should not use their services.” License and regulation confirmation should be displayed prominently on the website of any binary options broker.
Protecting consumer funds
There is also another warning regarding the protection of consumer funds; “if consumers lose money while using unlicensed operators, then the regulatory body cannot recover this, or offer any compensation.” This element of protection is often overlooked, and is sometimes assumed not to exist at all. The UKGC can however, help resolve disputes where the broker is licensed in the UK.
Where consumers may have already fallen victim to unlicensed brokers, the UKGC recommend contacting Action Fraud. Read the full UKGC statement on binary options here.
The UKGC warning follows similar messages released by French regulators – The Autorite des Marches Financiers (AMF). In France, one operator in particular has been misusing the logo of the regulatory body and legal steps have been taken to deal with that firm. The AMF echoed many of the comments made by the UKGC, including the importance of using only regulated brokers.
These statements illustrate the growth of binary options and the need for regulators to inform the public how to ensure they are using trusted brokers, and protect themselves from risk. CySec regulation has improved some of the issues that blighted the sector prior to that, and FCA regulation could go even further, and provide UK consumers with absolute confidence.