BaFin: ban of binary options for retail investors confirmed

the The German Federal financial Supervisory authority (BaFin) imposed a ban of binary options for retail investors. The authority justified the step with significant concerns in relation to the protection of investors.

By Christopher clover
30. November 2018 share Facebook Twitter LinkedIn xing mail

Binary (digital) options, futures, which are bets on the price, the price or the value of an underlying asset will be completed. It is a short-term form of investment with cash settlement, which can already end after only a few minutes. The derivatives are, moreover, easy to use and enjoyed in the past few years, a growing popularity. Binary options are considered to be highly risky investments, so risky, that the Federal financial services Supervisory authority wants to ban you now.

As the authority on 29. November was made known, relates to the prohibition of the marketing, distribution and selling binary options to retail investors. Exceptions are derivatives, which run a minimum of 90 days and the provider except with the pre-agreed commissions, no profit or loss. As a third condition must exist for a binary Option is a prospectus under the securities prospectus act.

The European financial regulator ESMA has already imposed in may, a temporary ban of binary options. The ban, which was entered into force in June, was due, among other things, that binary options in terms of their marketing and design are similar to the gambling. An extension of decision of 2. October extended the period of the ban for a further three months and the exceptions referred to above included a legal binary options.

Cross-border risk

The regulatory authorities took a number of EU member States have already before the entry into force of the prohibition measures. For example, the Portuguese financial Supervisory authority CMVM securities has prompted companies to the provision of investment services in connection with derivatives that are linked with crypto-currencies.

There are binary options on the Internet to be offered, it does not matter that there is no Germany-based provider of binary options. The German (Small)investors through the cross-border offering of binary options significant risks.

"for this reason, it is prevent also required that providers Dodge binary options in the countries of the European Union, in which the marketing, sales and selling binary options to retail investors are the least or not at all regulated."

Therefore, the Federal Institute recommends that the regulatory authorities of the other EU member States impose a ban of binary options, if the period is extended ESMA-expire ban.