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UK: Regulator to permanently ban binary options trading

By  |  March 31, 2019

Britain’s financial watchdog announced it will permanently ban the sale of complex derivative products to retail customers from Tuesday, April 2, to protect them from large and unexpected trading losses.

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    The Financial Conduct Authority’s (FCA) permanent ban on the sale of binary options to retail consumers is similar to a temporary retail ban the European Securities and Markets Authority (ESMA) has in force across the European Union.

    Regulators have expressed concern about how these inherently high-risk speculative products are offered to retail investors, potentially leading to significant losses.

    Binary options allow people to bet on whether the price of a share, currency or index will go up or down within a certain timeframe. CFDs give an investor exposure to price movements in securities without owning the underlying asset.

    The FCA ban goes further by including so-called securitised binary options, which are not currently sold in or from Britain. The watchdog stated said it wants to prevent a market being developed.

    Full Content: Financial Times

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