The recent ban of the Cyprus-regulated 24Option binary options broker in France by the local regulator AMF does not mean the other regulators are lax in their oversight, Demetra Kalogerou, head of the Cyprus Securities and Exchange Commission (CySEC) told the Cyprus Business Mail.
“This decision was made over two sentences of promotional text on the company’s French website, which were deemed misleading, plus a single complaint out of some 10 000 clients,” she said. Kalogerou’s comment came after last week the AMF banned the owner of the binary options broker, Rodeler Limited, from operating in France. According to her, the ban was the first for a Cyprus-regulated forex and binary options broker.
“Obviously, each national regulator applies its own rules, but there’s also politics at play. This could well be a message to other players, it could be the French regulator declaring that it is as strict as they get,” Kalogerou added.
We remind you that by European law, a broker regulated in one EU member state can operate in all other EU countries, without having to obtain a license from each of them.
At the same time, however, the AMF appears to be on the warpath against the forex and binary options brokers as a whole. Also last week, just hours after it announced the ban of 24Options, the regulator called for public consultations on a text in the draft law “Sapin 2” forbidding the advertising of the advertising of “highly speculative and risky financial contracts“ to the general public in France. This includes forex, binary options and certain CFDs.
Earlier this year the AMF also published its annual report for 2015, which revealed that in the past six years French investors have lost EUR 4 billion to fraudulent forex and binaries brokers. Another report of Marielle Cohen-Branche, the ombudsman of AMF, highlighted the rising number of complaints against forex and binary options brokers, the majority of them regulated in Cyprus.
According to Demetra Kalogerou, the forex industry in Cyprus as a whole has 230 companies, with 140 of them, or around 60%, engaging in traditional trading and 90 offering more complex and risky financial instruments.