16/01/2018
94 binary options firms trading without FCA authorisation (UK)
The Financial Conduct Authority has monitored the binary options markets and drawn on information from consumers and partner agencies to compile a list of 94 binary option firms that are trading without the FCA authorisation that firms involved in binary options trading in the UK have required since 3 January.
While most of the listed ‘Unauthorised binary options firms’ claim to be based in the UK, the FCA believes that the addresses they provide are mostly false and the firms involved are actually based overseas.
FCA intends taking enforcement action to prevent any who are operating from within the UK to cease their activity – which is a criminal offence in breach of section 19 of the Financial Services and Markets Act 2000.
Authorised binary options firms are listed on the FCA register. Consumers who trade with unauthorised firms do not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme should problems arise.
Binary option consumers typically lose money and these losses can be significant. ‘Binary Options’ explains the key risk is that they are typically priced in a similar fashion to fixed odd bets as their value is determined by the probability of an event happening.
“Investors are offered higher returns for lower probability events and lower returns for higher probability events. For investors to make a profit from trading they need to ‘beat the odds’ on a regular basis, which a majority of investors do not.”
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