Gold Magazine March - April 2013, Issue 24 | Página 65

BINARY TRADING

marked by a successful development phase
and current introductory phase into the market. Additional technology firms specializing
in Binary Trading have come into being and
to date the European Union is the leading player of the product, followed by Asia,
North America and South America.

BINARY TRADING REGULATION

All the available statistics show that Binary
Trading is growing in popularity and more
technology firms and operators are participating in this emerging sector. Naturally,
regulators are taking notice and looking at
regulating these instruments. Binary Trading
is primarily regulated as a financial instrument by major regulators although in some
jurisdictions it is still viewed as a gaming
instrument.
Following the EC’s approval of Binary
Trading in 2012, the Cyprus Securities and
Exchange Commission (CySEC) became
one of the first EU members to regulate
Binary Trading as a financial instrument, as
defined by the Markets in Financial Instruments Directive (MiFID).
It is anticipated that during 2013, additional EU regulators will be looking to
regulate Binary Trading (such CONSOB in
Italy). It is notable that due to the passporting mechanism under MiFID, brokers that
offer Binary Trading will be able to offer this
product legally throughout the eurozone. In
Asia, the Japanese Financial Services Agency
(JFSA) will be announcing a new set of regulations relating to Binary Trading in the first
quarter of this year.
At this very interesting point in time,
now that Binary Trading has gone through
more than five years of development and
introductory phases, it is time to study
whether or not this market is ready to take
off and enter the mainstream. Will the bold
move of a relatively small regulator such as
CySEC (and the MFSA) to become the first
to regulate Binary Trading as a financial
product represent the beginning of a new era
for this market? Was CySEC able to identify
yet another potential market parallel to the
triumphant Forex market? I certainly believe
so. As mentioned earlier, I recognise some
commonalities between the evolution of
the retail Forex market and Binary Trading.
The retail Forex market is now in its growth
phase while the Binary Trading market is
still in its introductory phase.
One could see how Cyprus, taking a strategic decision to position itself as a reputable
Forex hub back in 2006, is now looking to
add a new prominent trading theme under
its regime. It is the right mov